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o c t o b e r / n o v e m b e r 2 0 1 6 www.resourceworld.com 21 million tonnes to a depth of 260 metres, averaging 2.45 carats/tonne at a 1.18 mm bottom cut-off. Kimberlite pipe CH-7 also covers one hectare on surface and hosts an inferred mineral resource of 4.23 million carats in 4.99 million tonnes to a depth of 240 metres averaging of 0.85 carats/tonne at a 1.18 mm bottom cut-off. Both CH-6 and CH-7 contain additional kimberlite, currently classified as Target for Further Exploration (TFFE). An additional six pipes demonstrate diamond grades and dimensions with mine making potential. The most advanced is CH- 44, which contains between 1.27 and 3.19 million tonnes to a depth of 250 metres, is classified as a TFFE and has an in-house modeling forecast of 1.06 carats/ tonne ± 0.16 cpt of diamonds + 1.18 mm. Several other pipes, notably kimber- lites CH-1, CH-28, CH-31, CH-45 & CH-46, based on preliminary drilling, are of potential economic interest with all the indications of mine makers but require more drilling and diamond recovery stud- ies to properly evaluate them. Forty-three of the other 66 kimberlites have been tested for diamonds and 37 of them con- tain +0.106 mm diamonds of which 11 of the 37 contain commercial sized diamonds greater than +0.85 mm. DIAMOND VALUES – The base-case modeled prices for CH-6 and CH-7 as val- ued by WWW International Diamond Consultants, using their March 2016 price book, are US $149.00/carat and US $114.00/carat, respectively. The five high- est value stones from CH-6 range from 1.22 carat weight at US $1,950.00/carat to 8.87 carats at US $4,076.00/carat (based on WWW's 2014 price book). The eight high- est value stones from CH-7 range from 1.35 carat weight US $1,225.00/carat to 5.33 carats at US $3,106.00/carat. For the PEA, these deemed values were escalated annu- ally for 2016 at a rate of 2.5%. PROJECT ECONOMICS – Base-case PEA for Phase I development could gen- erate more than $1.31 billion in pre-tax net cash flows; a 10-year mine life, open- pit development with pre-tax NPV of $743.7 million at a 7.5% discount rate and pre-tax IRR of 38.1%; after-tax NPV of CDN $471.2 million at a 7.5% discount rate and an after-tax IRR of 29.8%; and a payback period of two years with an oper- ating margin of 72%. Preliminary estimates for forecasted construction commencement is 2020 with a milling rate of 2,000 tonnes/day with an average recovered grade of 1.67 carats/ tonne and a total recovery of 11.6 mil- lion carats over a 10-year mine life. The increase in mine life and total diamond recovery is considered favourable based on the yet to be quantified diamond-bearing kimberlites OTHER DIAMOND PROJECTS – Peregrine is involved in exploration projects in Botswana and has a 100% ownership of 11 licenses covering 6,613 km 2 involv- ing six projects. These projects are early stage with known indicator mineral occurrences. In Canada, the company has one proj- ect at Lac de Gras, Northwest Territories, with a primary asset of kimberlite DO-27 with an indicated resource of 18.2 million carats in 19.5 million tonnes of kimberlite and a second project Nanuq and Nanuq North in Nunavut with four diamondifer- ous kimberlites and additional exploration potential. n