Peregrine shares pop on 7.5M-carat maiden resource for Chidliak

By Mining Markets staff / May 07, 2014 / / Article Link

Peregrine Diamonds (TSX: PGD) has unveiled a maiden resource for the CH-6 kimberlite at its Chidliak diamond project in Nunavut.

CH-6 contains an inferred resource of 7.47 million carats in 2.89 million tonnes of kimberlite grading 2.58 carats per tonne. The resource extends to 250 metres depth and CH-6 is open at depth.

A valuation of CH-6 diamonds conducted in February revealed an average diamond price of US$213 per carat.

Beside and beneath the CH-6 resource, the company has defined a target for further exploration of 2.6 to 3.5 million additional tonnes. About half of that estimated tonnage (1.5 million tonnes) lies at shallow depths of between 105 and 250 metres depth, while the rest is between 250 and 380 metres depth. Peregrine is planning a core drilling program to convert the target to inferred resources.

The junior also released tonnage estimates for the CH-7 and CH-44 kimberlites. CH-7 hosts between 2.8 and 4 million tonnes from surface to 280 metres depth, while CH-44 contains between 1.2 and 2 million tonnes to a depth of 230 metres. The company is working to convert both targets to inferred resources with driling this year and bulk sampling next year.

A 47-tonne mini-sample at CH-7 in 2010 returned a grade of 1.04 carats per tonne.

"The release of our first resource estimate at Chidliak is a very positive and significant milestone for the company," said Peregrine president Brooke Clements in an email.

"Demonstrating that we have a resource of 7.47 million carats of diamonds in 2.89 million tonnes of kimberlite with diamond values well above the world average of US$142 a carat is a great point in the journey down the path towards development of a diamond mine on Baffin Island."

On the news, Peregrine shares climbed 10 or 24% this morning to 51 on 200,000 shares traded.

The stock has traded between 27.5 and 84 in the past 52 weeks.

In an interview in late March, Clements confirmed the company's top three shareholders were Robert Friedland with 18.6% of Peregrine shares, Peregrine CEO Eric Friedland with 16%, and Dundee Corp. with 9%.