May 20, 2010
Peregrine Reports Discovery of the CH-17 Kimberlite at Chidliak
Peregrine Diamonds Ltd. ("Peregrine" or "the Company") (TSX:PGD) is pleased to report the discovery of the CH-17 kimberlite on the Chidliak project ("Chidliak") on Baffin Island, Nunavut, Canada. The discovery of CH-17, 35 kilometres north of the nearest known kimberlites, CH-6 and CH-10, is further confirmation that Chidliak is a highly prospective and large Canadian diamond district. Formerly geophysical anomaly 166, CH-17 is the northernmost of two high-priority magnetic anomalies, 165 and 166, that have similar geophysical characteristics and are situated 200 metres apart under the same lake. Each of the anomalies has estimated surface expressions of at least one hectare. With this discovery, Peregrine management is confident that anomaly 165 is likely also a kimberlite.
The CH-17 drill core was described in the field as being macrocrystic olivine-rich kimberlite, containing country rock and mantle xenoliths, and abundant kimberlite indicator minerals. Pyrope garnet and chrome diopside grains up to 30 and 15 mm in size, respectively, were observed.
The CH-17 kimberlite is the first target drilled this year and the seventeenth kimberlite discovered at Chidliak since 2008. The discovery was made by drilling a vertical core hole from lake-ice into the centre of the high-priority magnetic anomaly and kimberlite was intersected underneath 41 metres of water and 2.5 metres of overburden. Three metres of kimberlite drill core was recovered before the hole was terminated due to drilling difficulties. A map showing CH-17 and the adjacent anomaly 165, and photographs of drill core, are available at: http://www.pdiam.com/i/pdf/chidliak613.pdf.
A second hole was not immediately attempted at CH-17 to allow for a thorough review and analysis of the drilling issues by Peregrine and the drilling contractor. While awaiting delivery of drill supplies, a geophysical anomaly 1.6 kilometres north of CH-17 was drilled because of its proximity to a favourable kimberlitic indicator mineral train. No kimberlite was intersected and the anomaly was explained by magnetic gabbro. The indicator mineral train is now interpreted as having likely originated from CH-17 and anomaly 165.
Since the CH-17 discovery hole was terminated on May 3, there have been ten days where weather did not allow access to the drill because of low visibility and/or high winds and blowing snow. In addition, unseasonably warm local weather has led to the formation of slush on the lake hosting CH-17 and anomaly 165. Both CH-17 and anomaly 165 cannot be efficiently drilled from the lake shore. For safety reasons, after a comprehensive analysis by an independent ice engineer, Peregrine has decided to postpone further drilling on the lake-ice at this particular locality until the spring of 2011. The drill is currently being moved to test two additional lake-based targets, anomalies 290 and 291 (see map at link noted above), that have more favourable lake-ice drilling conditions, and drilling is likely to commence in the next few days. Up to 30 land-based kimberlite targets are expected to be drilled this year during the spring and summer programmes at Chidliak.
As announced on November 24, 2008, BHP Billiton has exercised its earn-in rights for Chidliak. Under the terms of the earn-in agreement, BHP Billiton must incur a total of $22.3 million in exploration expenditures in order to earn a 51 percent interest in Chidliak. BHP Billiton sole-funded a $9.2 million exploration programme in 2009. A $13.9 million programme, recently increased from $13.5 million to allow for 6,000 additional line kilometres of airborne geophysics, has been approved for 2010.
Mr. Peter Holmes, P. Geo., Peregrine's Vice President, Exploration, is a Qualified Person under NI 43-101 and is responsible for the design and conduct of the programs carried out by the Company at Chidliak. Mr. Holmes has reviewed this release and approves of its contents.
For further information, please contact Mr. Eric Friedland, CEO, Mr. Brooke Clements, President, Mr. Mike Westerlund, Vice President, Investor Relations and Corporate Communications or Peregrine Diamonds Investor Relations, at 604-408-8880 or at firstname.lastname@example.org.
Forward-Looking Statements: This news release contains forward-looking statements. All statements, other than statements of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future (including, without limitation, statements relating to the proposed exploration program, funding availability, anticipated exploration results, resource estimates, and future exploration and operating plans) are forward-looking statements. These forward-looking statements reflect the current expectations or beliefs of the Company based on information currently available to the Company. Forward-looking statements are subject to a number of risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the forward-looking statements and, even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on, the Company. Factors that could cause actual results or events to differ materially from current expectations include, among other things, uncertainties relating to the availability and cost of funds, timing and content of work programs, results of exploration activities, interpretation of drilling results and other geological data, world diamond markets, future diamond prices, reliability of mineral property titles, changes to regulations affecting the Company's activities, delays in obtaining or failure to obtain required project approvals, any changing budget priorities of BHP Billiton, operational and infrastructure risks, and other risks involved in the diamond exploration business. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to their inherent uncertainty.
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