Overview

Peregrine Diamonds Ltd. is a public Canadian diamond exploration company founded by Eric Friedland in 2003, and listed on the TSX under the symbol PGD. Peregrine became public in 2006 through the acquisition of Dunsmuir Ventures, a TSX listed company. Peregrine’s primary focus is on developing kimberlites on its 100%-owned Chidliak project on Baffin Island, Nunavut, Canada in support of a Phase-1 diamond mine; unlocking value in its DO-27 project and on greenfield diamond discovery in its Botswana prospecting licenses.

The Chidliak project is located approximately 120 kilometres from Iqaluit, the capital of Nunavut. Peregrine first discovered kimberlite on the project in 2008, with the surface discoveries of the CH-1, CH-2 and CH-3 kimberlite pipes. Since 2008, a total of 74 kimberlites have been identified at Chidliak on both the Chidliak and Qilaq claims, 45 of which are diamondiferous, as indicated by microdiamond testing results. Eight kimberlites are potentially economic and additional microdiamond sampling of other pipes may increase this number.

Two of these kimberlites, CH-6 and CH-7, form the building blocks of the Chidliak Phase One Diamond Development program (CP1D). A recent milestone achieved by Peregrine was the release of a positive independent Preliminary Economic Assessment (PEA) for a Phase One diamond mine, based on the CH-6 and CH-7 kimberlites. Highlights of the PEA include:

  • Base-case PEA for Phase One development could generate more than $1.31 billion in pre-tax net cash flows
  • Ten year mine life, open-pit development with pre-tax NPV of $743.7 million at 7.5% discount rate and pre-tax IRR of 38.1%
  • After-tax NPV of C$471.2 million at a 7.5% discount rate and an after-tax IRR of 29.8%
  • Payback period of two years with an operating margin of 72%

The CH-6 kimberlite is a high-margin pipe hosting an Inferred Mineral Resource of 11.39 million carats of diamonds in 4.64 million tonnes at an average grade of 2.45 carats per tonne at a 1.18 mm bottom cut-off. The CH-7 kimberlite hosts an Inferred Mineral Resource of 4.23 million carats of diamonds in 4.99 million tonnes at an average grade of 0.85 carats per tonne at a 1.18 mm bottom cut-off. The maiden Inferred Mineral Resource at CH-7 was formed primarily on the results of the winter 2015 bulk sample program. Six large-diameter drill holes completed during this program and collected a total of 809.5 dry tonnes of kimberlite which returned an average sample grade of 0.88 cpt.

The base-case modelled diamond prices for CH-6 and CH-7, as valued by WWW International Diamond Consultants using their March, 2016 price book, are US$149 per carat and US$114 per carat, respectively. For the PEA, these diamond values were escalated annually from 2016 at a rate of 2.5%.

In 2015, Peregrine entered the mature diamond-prospective regions of Botswana through the private acquisition of Diamexstrat Botswana, which gave Peregrine 100% ownership of strategic diamond prospecting licenses grouped into four project areas, all of which are managed by the experienced team at Diamond Exploration Strategies Limited. Click here for more information on the project in Botswana.

Peregrine continues to evaluate other diamond exploration projects it controls in Nunavut and the Northwest Territories, and continues to work towards discovering new diamond districts in North America. Peregrine holds the nine hectare DO-27 kimberlite, located 27 kilometres from the Diavik Diamond mine, on its 72.1 percent-owned WO property in the Lac de Gras region of the Northwest Territories. The DO-27 kimberlite hosts an Indicated Mineral Resource of 18.2 million carats of diamonds in 19.5 million tonnes of kimberlite at a grade of 0.94 carats per tonne. Click here for more information on exploration projects.

Industry experts predict that without significant new discoveries in the coming years, the global demand for diamonds will soon outstrip supply. Through its 100 percent interest in the Chidliak project in Nunavut, its 72.1 percent ownership interest in the DO-27 kimberlite and its quality diamond exploration projects, Peregrine is well-positioned to contribute to the world’s diamond supply in the future.