Nunavut diamond hunters drill deeper near Iqaluit

A specialized Arctic drilling rig (in blue) with the Discovery camp in the background, at the Chidliak property. (TECHNICAL REPORT 2016 PHOTO)

A map showing where Peregrine’s Chidliak diamond drilling operation is located. (PEREGRINE TECHNICAL REPORT 2016 PHOTO)

Prospectors at Peregrine Diamond Ltd. reported yesterday that a diamond-laden kimberlite pipe at the company’s Chidliak site near Iqaluit contains a resource that runs double the depth of previous estimates and may also contain more valuable gems.

In a release to its investors published Tuesday, the TSX-traded company said the discovery would “significantly” increase its estimated diamond resource projections—an indicator of the site’s value—scheduled for release this February.

Kimberlite is a mineral produced by ancient volcanic activity in the earth’s crust that creates structures, called kimberlite pipes, that sometimes contain diamonds.

Since 2003, Peregrine Diamonds has prospected over 500 individual claims at its Chidliak site, located about 120 kilometres north of Iqaluit, and spent more than $17 million in exploration work at the site in 2017 alone.

The new data collected from its most recent drilling activity this past September suggests that the deposit at one highly promising Chidliak kimberlite pipe, dubbed CH-6, extends to at least 540 metres: over double the original depth estimates of 260 metres.

“The results we are releasing today confirm that the high-grade CH-6 kimberlite extends well below the current resource base of 260 metres,” Peregrine’s president and CEO, Tom Peregoodoff, told investors in a release.

While the company did not give a dollar-value estimate in the released data, it reported the presence of “very rare” green diamonds at the claim, which “bodes well for the presence of other rare, coloured diamonds that could have a significant impact on the overall average prices eventually received for diamonds recovered from the Chidliak project,” the release said.

The discovery of new types of rare diamonds at the site will likely build on the company’s estimate of 11.39 million carats at CH-6 included in a 2016 report.

Peregrine Diamonds said the Chidliak project would likely require a capital investment of $486 million before mining operations start at the site.

Full-scale operations at Chidliak would net Nunavut about 275 to 325 new jobs, shared between the site’s closest communities of Iqaluit and Pangnirtung, Peregrine Diamonds representatives told Iqaluit city council last year.

Peregrine is unable to say when they would be able to start operating a mine, but they said the company has started to plan the building of a “dense media separator” at the Chidliak site.

“The installation of an on-site [separator] plant is the next step in our evolution towards a commercial diamond mine at Chidliak,” Peregoodoff said.

“An on-site plant will enable the company to effectively and efficiently take the existing diamond resources at CH-6 and CH-7 through feasibility and allow us to add to this growing resource base through the bulk sampling of additional kimberlites.”