Peregrine’s Chidliak delivers the goods (November 23, 2010)

Highly anticipated mini-bulk sample results from Peregrine Diamonds‘ (pgd-t) Baffin Island Chidliak diamond project didn’t disappoint.

The CH-7 mini-bulk sample shows a grade of 1-carat-per-tonne and a population of gem-quality diamonds, 15 of which are over 0.5 carat in weight and include 6.53, 2.18 and 1.24-carat stones.

“We now have five kimberlites with economic potential in Arctic settings at Chidliak, and four of those are clustered within an area that has only an 8-km radius: CH-1, CH-6, CH-7 and CH-31,” stated Eric Friedland, Peregrine’s chief executive officer. “We hope to add to this growing list of potentially economic kimberlites as more microdiamond results from the 34 kimberlites discovered this year are received.”

The highly promising land-based CH-7 kimberlite pipe has an estimated surface expression of 1 hectare. It is one of 50 new kimberlites Peregrine Diamonds has discovered in the last couple of years on the 9,800-sq.-km Chidliak project, 120 km northeast of Iqaluit.

The project is held 51% by BHP Billiton (bhp-n, blt-l) and the rest by Peregrine. This year’s $15.3-million exploration program was funded entirely by BHP as part of its earn-in requirement. BHP has a one-time option to earn an extra 7% should it choose to fund the project to completion of a bankable feasibility study. BHP has until the end of November to decide.

Adding to the kimberlite count at Chidliak was only one of Peregrine’s objectives during this year’s exploration program. During the summer, Peregrine took mini-bulk samples from two promising kimberlites discovered in 2009; a 47.2-tonne sample from CH-7 and a 14-tonne drill sample from CH-6.

A 47.2-tonne sample of surface material collected from CH-7 returned a 49.07-carat parcel of commercial-size diamonds larger than a 0.85-mm sieve size cutoff, for a diamond grade of 1.04 carats per tonne.

Of the 15 diamonds 0.5 carat and larger, one is white or colourless, three are off-white, five are grey and three are brown in colour. Ten of the diamonds are described as octahedrons, three are distorted crystals and two are aggregates.

The four largest diamonds are a 6.53-carat grey, translucent distorted crystal, a 2.18-carat white or colourless, transparent octahedron, a 1.24-carat off-white, transparent aggregate and a 0.98-carat off-white, transparent octahedroid.

The mini-bulk sample results compare very favourably with previous microdiamond results, which showed an encouraging coarse diamond size distribution. The outcropping CH-7 kimberlite was discovered 2 km southwest of CH-1 while investigating an airborne magnetic anomaly in the summer of 2009. A 221-kg sample of surface material collected by hand returned an impressive 664 stones, including a 0.64-carat, off-white diamond.

The 47.2-tonne mini-bulk sample of CH-7 was collected from a 2-metre-deep trench on an outcropping 3.5-by-4.5-metre portion of the pipe’s north lobe. The sample consisted entirely of magmatic kimberlite containing abundant indicator minerals and mantle xenoliths.
In an effort to assess its size potential, Peregrine put six core holes and two reverse circulation (RC) holes into the pipe. Two angled holes across the southern end intersected true horizontal widths of 88 and 95 metres. Interpretation of the drill hole data suggests the CH-7 kimberlite is a multi-phase pipe measuring 1 hectare at surface. It contains a distinct north lobe and a south lobe.

The north lobe appears to comprise a single phase of coarse-grained olivine macrocrystic magmatic kimberlite, with abundant indicator minerals and mantle xenoliths. The south lobe is not exposed at surface and consists of volcaniclastic kimberlite, with Paleozoic rock fragments plus abundant indicator minerals and mantle xenoliths.

Results from the 14-tonne mini-bulk sample of CH-6 are pending. Hopes are especially high for CH-6, which delivered spectacular microdiamond results last year that prompted comparisons to the early days of the Ekati and Diavik diamond discoveries.

CH-6 was discovered under 16 metres of overburden by drilling a magnetic low anomaly. A 569-kg sample of drill core returned a staggering 4,737 diamonds, including a 4.58-carat parcel comprised of 63 commercial-size stones larger than 0.85 mm. The largest diamond was a 0.62-carat white, transparent aggregate.

At presstime, shares of Peregrine had responded positively to the CH-7 results, trading as high as $3.18 before settling in at around $2.80.