Peregrine touts growth in diamond resource estimates at Nunavut’s Chidliak project

This photo shows 87.2 carats of white and colourless stones recovered from a bulk sample extracted in 2013 from the Chidliak site near Iqaluit. However, the company must do more work to confirm the existence of an economically viable resource. (PHOTO COURTESY OF PEREGRINE DIAMONDS)

Peregrine Diamonds Corp. reported this week that they’ve increased resource and tonnage estimates for three of their promising kimberlite pipes at the Chidliak project near Iqaluit — but also said they must do more work to confirm the existence of an economically viable diamond resource.

At its CH-6 kimberlite pipe, Peregrine reported that exploration activities led to a 15 per cent increase in their “inferred resource estimate” for the top 250 metres of the deposit.

The term “inferred resource” means an estimate of mineral content that is made with a fairly low level of confidence.

Peregrine also said they have increased their tonnage estimate for CH-6 by 23 to 26 per cent.

At the same time, Peregrine has increased their tonnage estimate for its CH-7 pipe by 35 to 51 per cent and their tonnage estimate for the CH-44 pipe by 10 to 56 per cent.

“The Peregrine team, including its contractors and local employees, delivered once again in 2014, efficiently and safely,” Brook Clements, Peregrine’s CEO, said Jan. 26 in a news release.

He said those promising estimates come from exploration that took place near the surface, less than 120 metres deep, and that the company plans to do more drilling in attempt to expand its resource estimate.

But the company also cautioned that its “tonnage estimates” are essentially rough guesses — “conceptual in nature.”

“There has currently been insufficient exploration to define a mineral resource on those targets and it is uncertain if further exploration will result in the tonnage estimates being delineated as a mineral resource,” the company said.

The company followed that up with a clarification issued Jan. 27, when they stressed again that they have done “insufficient exploration to define a mineral resource.”

However, Peregrine states that a portion of the CH-6 kimberlite holds an inferred resource of 3.33 million tonnes of kimberlite, 8.57 million carats of diamonds with an estimate grade of 2.58 carats per tonne of ore.

The company has said that ore grades at CH-6 may make it one of the richest undeveloped deposits in the world.

The Chidliak project is located about 120 km from Iqaluit, where Peregrine has discovered 71 kimberlites. Of those, eight have the potential become economically viable, Peregrine said.

Commercially viable kimberlite pipes are rare. Over the past 140 years, geologists around the world have sampled about 7,000 kimberlite pipes but only about 60 of them were rich enough to justify commercial mining.

Peregrine plans another bulk sampling program for 2015 that will start in March, aimed at improving their knowledge of the potential resources at CH-6, CH-7 and CH-44.

“The objective of the 2015 program is to delineate a resource base that would be the subject of a Preliminary Economic Assessment in 2016,” the company said.

That preliminary economic assessment would likely reveal whether Chidliak contains a viable economic resource.

In November 2010, Peregrine’s shares traded as high as $3.26 on the TSX.

But as of the morning of Jan. 28, the company’s stock was trading at only 17 cents per share.

The global market for diamonds is likely to improve between now and 2018, the consulting firm Bain and Co. said this past December in a report.

That’s because demand for diamonds is likely to increase in the United States, China and India, Bain said.