Peregrine Diamonds (PGD-T) has wrapped up its mini-bulk test at Chidliak, on Baffin Island. As a result of an early spring, Peregrine did not drill its planned hole into each of CH-44 or CH-6. All its drilling took place at the CH-7 pipe, which had yet to receive a substantial mini-bulk test, because its size makes it a vital cog in the company's Chidliak mine plan. CH-6 has already been tested and CH-44, although likely to be included in the eventual mine plan, is smaller and of less importance. As a result, the holes into the latter two kimberlites were deemed expendable when the warm weather arrived.
Peregrine drilled six holes into CH-7, ultimately bagging 558 tonnes of kimberlite chips larger than a 1.18-millimetre screen. The amount of kimberlite ground to dust by the big reverse circulation drill remains to be determined. To do so, Peregrine will estimate the volume of its drill holes and calculate the theoretical tonnage. (That figure is typically used for grade calculations.) An earlier 47-tonne test of CH-7 yielded an average grade of 1.04 carats per tonne, so Mr. Peregoodoff, CEO, and Mr. Friedland, chairman, are expecting several hundred carats of diamonds from their CH-7 test. That would be sufficient to model a rough diamond valuation for the pipe, which in turn will allow the company to model the economics of its mine plan.
The grade and value estimates will be available later this year, while the economic details should become clear next year when Peregrine completes a preliminary economic assessment of Chidliak. Neither the grade nor the diamond values are likely to be showstoppers, but the company will have to show it has the tonnage to support a mine. (It will presumably have to do so without CH-44, where Peregrine now plans a mini-bulk test in 2016.) Even without CH-44, Peregrine's tonnages are shaping up nicely. The company has 3.3 million tonnes inferred at CH-6 and another 3.2 million to 4.4 million deemed a target for further exploration. At a grade of 2.6 carats per tonne, the CH-6 material could hold nearly 20 million carats. Over half of those carats are currently unavailable for dream sheet calculations, so Peregrine will be drilling this summer to upgrade the rock to a formal resource. That is also the case at CH-7, where Peregrine has between 3.7 million and 6.0 million tonnes of target kimberlite. That potential for up to six million carats could make or break the upcoming dream sheet. As a result, Peregrine will be working hard to maximize its CH-7 resource. |
