Firm pins hopes on potentially high-grade Nunavut kimberlite pipe near Iqaluit

Here’s what a drill section of kimberlite looks like. It’s similar to rock found in kimberlites that Peregrine Diamonds Ltd. has found on its Chidliak property about 120 kilometres northeast of Iqaluit. (FILE PHOTO)

Peregrine Diamonds Ltd. plans to extract about 200 tonnes of ore from its CH-6 kimberlite pipe near Iqaluit this year in a bulk sample project aimed at proving it’s one of the highest grade kimberlite pipes in the world, the company said in a Jan. 28 release.

Peregrine will pay for the work out of a $5-million work plan budget for 2013.

It follows the discovery in 2010 of a smaller, 14.1-tonne “mini-bulk sample” of kimberlite that produced a grade of 2.84 carats of diamond per tonne.

“If that grade is confirmed with further testing, CH-6 would be one of the highest grade kimberlite pipes in the world,” the company said.

The company will start the project in a few weeks, using an excavator to remove about four meters of overburden and then collect the sample by digging trenches down to a depth of four to eight metres.

Between mid-March and mid-April, Peregrine will transport bags full of ore to Iqaluit using haulage sleds and a DC-3 aircraft.

In July, they plan to ship the sample to Montreal on a sealift vessel.

Eric Friedland, the CEO of Peregrine, said an analysis of the bulk sample could help the company confirm the economic viability of the property.

This past September, Peregrine struck a deal with De Beers Canada Ltd. under which De Beers holds an option to enter into a joint venture agreement with Peregrine that would eventually give De Beers majority ownership of the Chidliak property.

De Beers has until the end of 2013 to exercise that option.

But at this point, the quality and economic viability of the CH-6 kimberlite pipe has yet to be proven.

Peregrine’s former partner, BHP Billiton, walked away from the diamond industry in 2011 and Peregrine bought BHP’s 51 per cent interest in the Chidliak property.

At the same time, world diamond prices remain uncertain after falling by 12.5 per cent in 2012.

However, a Jan. 28 article in The Telegraph speculates that diamond prices may stabilize and begin to rise in 2013.

The Chidliak site lies about 120 km northeast of Iqaluit.