Companies wait for the result of the bulk sample

By NUNATSIAQ NEWS

(Updated, June 5, 9 a.m.)

Peregrine Diamonds Ltd. and De Beers Canada Inc. are set to start up a field camp this summer at the Chidliak diamond property, 120 kilometres northeast of Iqaluit.

But it’s the results of the analysis of 508 wet tonnes of samples collected on the 858,000-hectare Chidliak project that will determine how the project moves ahead.

The size of the bulk sample — double the amount originally planned — is expected to deliver a larger parcel of rough diamonds to provide “higher confidence” about what Chidliak can deliver.

The bulk sample will be shipped from Iqaluit this summer and be processed for diamond recovery at the end of 2013, Peregrine confirmed June 3.

Depending on the results, De Beers may decide to exercise its option to enter into a joint venture with Peregrine to develop the project.

The Vancouver-based diamond exploration company formed a partnership with De Beers in September 2012 to help finance the project and share developmental risks.

The deal gives De Beers 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.

Meanwhile, De Beers will cover the eight-week, $2 million program exploration this summer, Peregrine said June 3.

On June 5 the company said it was also finalizing a $3.5 million private investment of up to 10 million shares at a price of $0.35 per share for gross proceeds of up to $3.5 million

So far, De Beers has spent $6.3 million on Chidliak.

“Transitioning of operatorship to De Beers for this program is well advanced and I am confident that De Beers will advance Chidliak,” said Peregrine’s president Brooke Clements.

The money De Beers has spent to date will be applied to the $58.5 million if De Beers decides on the joint venture agreement with Peregrine.

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.

In April, Peregrine Clements and Tom Peregoodoff, executive vice-president of Peregrine, gave Iqaluit City Council an update that evening on the diamond mine that might one day be operational — if bulk tests for diamond quality are confirmed.