November 22, 2010
CH-7 Mini-Bulk Sample Returns Grade Of 1.04 Carats Per Tonne; 15 Diamonds Over 0.50 Carat Including 6.53, 2.18, And 1.24 Carat StonesPeregrine Diamonds Ltd. ("Peregrine" or "the Company") is pleased to report that a mini-bulk sample of surface material collected from the CH-7 kimberlite weighing 47.2 dry tonnes returned 49.07 carats of commercial-sized diamonds larger than the 0.85 mm sieve size, for a diamond grade of 1.04 carats per tonne ("cpt"). The mini-bulk sample yielded 502 commercial-size diamonds, 15 of which weighed 0.50 carat or more, including three diamonds larger than one carat. The four largest diamonds weighed 6.53, 2.18, 1.24 and 0.98 carats.
The CH-7 kimberlite has an estimated surface expression of one hectare and is located on the 9,800 square kilometre Chidliak project ("Chidliak"), Baffin Island, Nunavut, Canada. The sample was processed by dense media separation ("DMS") at the Saskatchewan Research Council Geoanalytical Laboratories ("the SRC"). The diamond results are presented in square mesh sieve format in the following table.
SUMMARY OF CH-7 MINI-BULK SAMPLE DIAMOND RESULTSThe diamond content of the CH-7 sample as determined by DMS processing may not be representative of the overall diamond content of the CH-7 kimberlite due to a number of factors including the limited surface area of the kimberlite from which the CH-7 sample was collected and the relatively small size of the sample.
The colours and shapes of the fifteen diamonds 0.50 carat and larger were described by the SRC. One diamond was white/colourless, six were off-white, five were grey and three were brown. Ten of the diamonds were described as octahedrons, three were distorted crystals and two were aggregates. The largest four diamonds were a 6.53 carat grey, translucent distorted crystal, a 2.18 carat white/colorless, transparent octahedron, a 1.24 carat off-white, transparent aggregate and a 0.98 carat off-white, transparent octahedroid.
Images from CH-7 and photographs of some of the diamonds recovered from CH-7 are available at the following link http://www.pdiam.com/i/pdf/Chidliak241.pdf.
Eric Friedland, Peregrine's CEO stated "We are pleased to see a grade of one carat per tonne and a population of gem quality diamonds in this mini-bulk sample from CH-7, results that certainly justify a large bulk sample of this pipe and are another illustration of the excellent potential for Chidliak to host a diamond mine. We now have five kimberlites with economic potential in Arctic settings at Chidliak, and four of those are clustered within an area that has only an eight kilometre radius: CH-1, CH-6, CH-7 and CH-31. We hope to add to this growing list of potentially economic kimberlites as more microdiamond results from the 34 kimberlites discovered this year are received. As we await all the results from the 2010 exploration programme, including a 14 tonne sample collected from CH-6, we are completing our 2011 exploration strategy which will entail the further evaluation of known kimberlites with economic potential, including the planning for larger bulk samples, as well as the discovery of more diamondiferous pipes starting next March with the drilling of a number of compelling lake-based targets."
SAMPLE COLLECTION, PROCESSING AND DIAMOND RECOVERY
The 47.2 tonne mini-bulk sample of the CH-7 kimberlite was collected by trenching from an outcrop measuring approximately 3.5 by 4.5 metres to a maximum depth of approximately two metres. At the same time, a representative audit sample weighing 467.3 kilograms was also collected from the trench. Both samples consisted entirely of magmatic kimberlite with abundant kimberlite indicator minerals and mantle xenoliths. The sample collection and shipment process was conducted under strict chain of custody protocols and was supervised by senior Peregrine personnel.
At the SRC, the mini-bulk sample was crushed by a jaw crusher with a gap set at approximately 30 mm. The sample was then fed into a five tonne per hour DMS plant where it was subjected to scrubbing and two stages of crushing. DMS concentration was performed on +0.85-12.0 mm feed material. Heavy mineral concentrate from the DMS was treated through a two-stage Flow Sort x-ray sorter and vibrating grease table recovery circuit. The resulting concentrates were then hand-sorted for final diamond recovery using sealed glove boxes.
As an element of Peregrine's Quality Assurance/Quality Control protocols, 111 numerically laser-etched natural diamond tracers ranging in size from 0.2 to 1.5 carats were added to the sample bags in the field, and 100 percent of the tracers were recovered at the SRC. In addition, 120 blue synthetic tracers with a density of 3.53 g/cm3 were added to the sample at the SRC prior to DMS processing, and 100 percent of these tracers were also recovered. To audit the DMS results, the representative 467.3 kilogram audit sample was processed by caustic fusion at the SRC for diamonds larger than the 0.425 mm sieve size and the results are presented in the following table.
CAUSTIC FUSION DIAMOND RESULTS FOR THE 467.3 KILOGRAM AUDIT SAMPLE FROM CH-7
The largest stone recovered in the caustic audit sample was a 0.56 carat off-white, translucent fragment. Results from the caustic fusion audit will be used in conjunction with other audits to confirm the efficiency of the processing and diamond recovery circuits at the SRC.
The discovery of the CH-7 kimberlite was first reported on August 6, 2009. Diamond results for a 221 kilogram sample collected from surface material reported on October 5, 2009 showed a coarse diamond size distribution. The sample yielded 664 diamonds larger than the 0.075 mm sieve size including a 0.64 carat off-white, translucent octahedroid.
As reported on September 16, 2010, six core holes and two reverse circulation holes were drilled into CH-7 in an effort to determine its size potential. CH-7 is a multi-phase body with an estimated surface area of one hectare. Interpretation of the drill data suggests that there are two distinct lobes at CH-7, a north lobe, and a south lobe. The north lobe appears to consist of a single phase of coarse-grained olivine macrocrystic magmatic kimberlite that contains abundant indicator minerals and mantle xenoliths. The mini-bulk sample was collected from a portion of this phase that is exposed at surface. The south lobe is not exposed at surface and consists of volcaniclastic kimberlite with Paleozoic rock fragments, abundant indicator minerals and abundant mantle xenoliths. Samples collected from CH-7 by core and reverse circulation drilling have been sent to the SRC for caustic fusion analyses and results are expected by year-end.
The SRC is an independent laboratory that is accredited by the Standards Council of Canada to the ISO/IEC Guide 25 standard for diamond recovery by caustic fusion.
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 programmes carried out by the Company at Chidliak. Dr. Jennifer Pell, Peregrine's Chief Geoscientist, was the Company's Qualified Person for the sample processing and diamond recovery. Howard Coopersmith, an independent consultant to the diamond industry, was Peregrine's external Qualified Person for the sample processing and diamond recovery. Mr. Holmes, Dr. Pell and Mr. Coopersmith have reviewed this release and approve of its contents.
Chidliak is a joint venture between Peregrine (49%) and BHP Billiton (51%). BHP Billiton has a Second Option to earn an additional seven percent interest in the Project by electing to fund the Project to completion of a Bankable Feasibility Study. Peregrine expects to be advised regarding the Second Option election this month.
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 programme, 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 programmes, 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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