November 6, 2006
November 6, 2006 - Vancouver, B.C. - Peregrine Diamonds Ltd.
(“Peregrine”) (TSX: PGD) has received the modeled valuation report by
WWW International Diamond Consultants Ltd. (“WWW”) on the combined 2005
and 2006 diamond parcels, comprising 508.9 carats from the Main Lobe and
Northeast Lobe pyroclastic kimberlite of DO-27, WO Diamond Project,
The average modeled valuation ranged from US$45 to US$73 per carat using WWW’s September, 2005 diamond price book.
The average modeled valuation ranged from US$41 to US$62 per carat using
WWW’s September, 2006 diamond price book, reflecting the significant
drop in certain rough diamond prices over the last year.
Highlights from the comprehensive WWW report include:
- Normally with a sample of only 510 carats, the average spot price
(primary producer sales price at the day of valuation) assigned to the
sample would be in the order of plus 40 to minus 25 percent (90%
confidence limits) of the true value of the resource. This highlights
the inherent uncertainties of valuing a small parcel of diamonds.
Modeled valuation calculations start with a spot price and therefore
variations in spot prices will affect the ultimate modeled valuation.
- Given the small size of the DO-27 sample, diamond values
have more upward potential than downward, and diamond values per size
class in the larger sizes could be higher than those used in the model.
- Based on analysis of the 2005 and 2006 bulk samples, WWW
believes it is highly unlikely that the average price will be lower than
US$41 per carat based on current (September, 2006) diamond prices.
- WWW is forecasting rough diamond prices to increase by around 20 percent over the next five years.
- At 90 percent confidence limits, 7,000 carats would give a
modeled average price within 10 percent of the true value and within 15
percent of the true value with 3,000 carats. WWW would recommend that at
least 3,000 carats be extracted from DO-27 as with modeling the
confidence limits will tighten to within 10 percent.
As the incidence of larger, higher value stones will have the most
impact on average diamond values from DO-27, at least 3000 carats will
be needed from the pipe to begin to give an acceptable degree of
confidence that those types of stones have been recovered in typical
proportion. Determining the economic viability of a diamond project is
complicated. It involves extensive geostatistical analysis due to the
highly variable nature of diamond distribution in kimberlite pipes and
the fact that both diamond grade and average diamond value play
important roles in determining the viability of any given diamond
deposit. Since no two diamonds are exactly alike, a significant parcel
of diamonds (3000 to 7000 carats) is needed to gain the confidence
levels on diamond size distribution and average diamond value necessary
to make any realistic decisions regarding the future development of
In that regard, Peregrine will soon announce plans for the upcoming
winter 2007 bulk sampling program at DO-27 with specifics on various
drilling methods and equipment that will be employed to attempt to
significantly increase the total carats recovered.
WWW International Diamond Consultants Ltd. have reviewed and approved
the contents of this release. This release has also been reviewed and
approved by Jennifer Pell, Ph.D., P.Geo., Peregrine’s internal Qualified
Person (“Q.P.”), and Howard Coopersmith, P. Geo., Peregrine’s external
Peregrine is a well funded Canadian diamond exploration/development
company that is managed by experienced geoscientists. The company is
completing a Preliminary Technical Assessment Report on the 9 hectare
DO-27 and 3 hectare DO-18 diamondiferous kimberlite pipes, and is
exploring for other diamondiferous kimberlites on its extensive land
holdings in Canada. The company trades on the TSX Exchange under the
On Behalf of the Board of Directors:
President and CEO
For further information, please contact Robérta Voyer, Corporate Administrator, at 604-408-8880.
Forward-Looking Statements: This document includes forward-looking
statements. Forward-looking statements include, but are not limited to
statements concerning Peregrine’s projects, pre-feasibility studies, and
other statements that are not historical facts. When used in this
document, the words such as “could,” “confident,̶