February 15, 2018
Peregrine Diamonds Ltd. (“Peregrine” or “the Company”) (TSX:PGD) is pleased to report that the Company’s successful 2017 Resource Development Program has resulted in a substantial increase in the Inferred Mineral Resource at the high-grade CH-6 kimberlite pipe at Peregrine’s 100%-owned Chidliak Diamond Project, Nunavut, Canada.
Drilling in 2017 delineated the high-grade CH-6 kimberlite pipe to a depth of 540 metres below surface (“mbs”) and the kimberlite remains open below that depth. Key results include:
- CH-6 updated Inferred Mineral Resource of 17.96 million carats in 7.46 million tonnes to 525 mbs;
- Inferred Mineral Resource tonnage increased by 61% from 4.64 million to 7.46 million tonnes;
- CH-6 contained carats increased by 58% from 11.39 million to 17.96 million carats;
- High-grade KIM-L domain with a grade of 4.49 carats per tonne (“cpt”) comprises 17% by volume of the updated CH-6 resource; and
- Total Phase One Diamond Development resource now exceeds 22 million carats.
Additional tonnage, considered a Target for Further Exploration (“TFFE”) of 1.09 to 2.35 million tonnes, has also been identified for a portion of the CH-6 kimberlite pipe at depths between 300 and 590 mbs. The CH-6 kimberlite pipe remains open for expansion to depth.
Tom Peregoodoff, Peregrine’s President and CEO said “Since we announced our maiden inferred resource at CH-6 in May 2014, we have grown this resource by an incredible 140%, from an initial 7.5 million carats to the 18 million carats we are proud to announce today. The growth of the CH-6 resource is remarkable and together with the CH-7 kimberlite resource, brings the Phase One Diamond Development resource at Chidliak to an impressive 22 million carats. Simply put, there is no other Canadian development-stage diamond project that compares with Peregrine’s flagship project in terms of resource value or upside potential. This Phase One resource is based on only two of the 74 currently known kimberlites at Chidliak providing significant resource expansion possibilities which the Company intends to pursue in 2018.”
In April 2016, the Company announced a CH-6 Inferred Mineral Resource of 11.39 million carats in 4.64 million tonnes, which, combined with an Inferred Mineral Resource of 4.23 million carats in 4.99 million tonnes at CH-7, formed the foundation for the 2016 Preliminary Economic Assessment (“PEA”) for the Chidliak Phase One Diamond Development (see release dated July 7, 2016). The 2016 PEA Phase One development envisages a 10-year mine life at an annual average production rate of 1.2 million carats with an after-tax Net Present Value (“NPV”) of C$471 million, an Internal Rate of Return (“IRR”) of 29.8% and a capital payback period of two years.
JDS Energy and Mining Inc. (“JDS”) has commenced work on a revised PEA of a Phase One Diamond Development, with results expected in the second quarter of 2018. The 2018 PEA is based on aggregate Inferred Resources at CH-6 and CH-7 of 22.19 million carats contained in 12.45 million tonnes of kimberlite.
Mr. Peregoodoff added “The PEA we announced in 2016 clearly established Chidliak as a unique diamond development opportunity. Today’s announcement of the significant expansion of the diamond resource should have a material, positive impact on the forthcoming economic analysis and I look forward to sharing the results of the updated Phase One Diamond Development PEA with all of our stakeholders as soon as possible.”
CH-6 INFERRED MINERAL RESOURCE UPDATE
The 2017 Resource Development Program at Chidliak focused on expansion of the Inferred Resource at CH-6. As announced on September 21, 2017, approximately 5,288 metres of diamond core drilling was completed during this program. Drilling results demonstrated geological continuity of the CH-6 kimberlite to 540 mbs, established additional pipe margin pierce-points deeper than 260 mbs, the base of the 2016 Inferred Resource, and obtained spatially representative kimberlite samples for caustic fusion diamond analysis.
Microdiamond results by caustic fusion for 1,936.45 kilograms of kimberlite collected during the 2017 program were announced on November 28, 2017. The results support a coarse diamond size distribution for all material sampled and reproduce diamond recovery rates for the previously defined KIM-L and KIM-C geological units at the CH-6 kimberlite.