Peregrine Announces CH-6 Independent Diamond Valuation Results

February 26, 2014 PDF version
Peregrine Diamonds Ltd. (“Peregrine” or “the Company”) (TSX:PGD) is pleased to announce the results of an independent diamond valuation for a 1,013.5 carat parcel of commercial-size diamonds recovered from the CH-6 kimberlite pipe. The average price was US$213 per carat and the entire parcel was valued at US$215,605. The modelled price ranged from a minimum of US$162 per carat to a high of US$236 per carat with a base case modelled price of US$188 per carat. The grade of the 404.2 tonne bulk sample that yielded the 1,013.5 carat parcel was 2.58 carats per tonne (“CPT”) for diamonds larger than the 1.18 mm square mesh sieve size. Within the parcel, the four largest diamonds weighing 8.87, 5.83, 4.62 and 4.11 carats had per carat market values of US$4,076, US$3,455, US$2,900 and US$2,633 respectively. The CH-6 kimberlite is located on Peregrine’s 100 percent-owned Chidliak diamond project (“Chidliak” or “the Project”), on Baffin Island, 120 kilometers from Iqaluit, the capital of Nunavut, Canada.

The diamond valuation was undertaken in Antwerp, Belgium by WWW International Diamond Consultants (“WWW”), an international diamond valuation and consultancy company. Diamond prices were determined using their February 24, 2014 price book and their proprietary price modelling techniques which predict the average price per carat in a mine production scenario. Through its partnership in Diamonds International Canada Ltd., WWW performs the Canadian federal and provincial government diamond valuations for the four producing diamond mines in Canada and has been working with Canadian diamond production since 1998.

Mr. Richard Wake-Walker, co-founder of WWW stated “The shape, colour and size distribution profiles of this parcel compare very well with current Canadian diamond production. It is very encouraging to see such high quality goods from a relatively small parcel and at such an early stage in the project.”

Mr. Eric Friedland, CEO of Peregrine stated “The results of the first diamond valuation from Chidliak are spectacular. The average price per carat and grade of this bulk sample clearly show that CH-6 could have rock value that is comparable with the richest kimberlites currently being mined. These results establish Chidliak as a world class diamond district. We are more confident than ever that planned bulk sampling beginning in 2015 of other known pipes at Chidliak with economic potential could lead to the development of Baffin Island’s first diamond mine.” View Gallery.

CH-6 DIAMOND VALUATION
As reported on January 16, 2014, Peregrine recovered a 1,042.1 carat parcel of commercial-size (+1.18 mm) diamonds from a bulk sample weighing 404.2 dry tonnes collected from the CH-6 kimberlite by trenching in early 2013. Prior to shipping the parcel to Antwerp, the diamonds were sieved into Diamond Trading Company (“DTC”) size classes, with the +3 DTC sieve size approximating the +1.18 mm square mesh sieve size. DTC sieve classes are the worldwide diamond size classification standard for the diamond industry. After sieving, the parcel weighed 1,020.7 carats for +3 DTC diamonds. After cleaning by deep acid boiling in Antwerp, the parcel weighed 1,013.5 carats. Minor weight loss in a diamond parcel is common after cleaning. Photos of CH-6 diamonds are available at:

WWW determined the modelled prices for the 1,013.5 carat parcel using proprietary statistical methods that predict the recovery rate and price of each size class of diamonds in potential future run of mine production. Data used for the modelling included diamond size frequency distribution, market prices for each size class, and estimated market prices for larger diamonds that would be recovered in a production scenario but were not fully represented in this parcel.

The diamond valuation was monitored by Dr. Jennifer Pell, Peregrine’s Chief Geoscientist and Qualified Person for diamond valuations. The following table summarizes the results of the valuation.

SUMMARY OF CH-6 KIMBERLITE DIAMOND VALUATION

SAMPLE
GRADE