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Peregrine Diamonds Transfers Diamond Properties to Wholly Owned Subsidiary

Peregrine Diamonds Ltd. is pleased to report that the following diamond properties have now been transferred to its wholly owned subsidiary Peregrine Exploration Ltd.

  • the Lac de Gras project in the Northwest Territories
  • the Nanuq and Nanuq North properties in Nunavut

In addition to the properties, Peregrine Diamonds has granted Peregrine Exploration an exclusive licence to utilize its extensive North American diamond exploration database.

The Lac de Gras project hosts the nine hectare DO-27 kimberlite which has an Indicated Mineral Resource of 18.2 million carats of diamonds and is open at depth. The Nanuq and Nanuq North properties currently host four diamondiferous kimberlites and have excellent exploration potential. The North American diamond exploration database includes an extensive database acquired from BHP Billiton in 2012 in connection with the Company's acquisition of BHP Billiton's interest in the Chidliak property. This database contains information from over 38,000 kimberlite indicator mineral samples collected throughout Canada over a ten year period at great expense.

Mr. Eric Friedland, Executive Chairman of Peregrine Exploration and Peregrine Diamonds stated, "Following the strategic review we reported February 12, 2015, the transactions announced today are the first step towards ensuring that we capture maximum value for Peregrine Diamond's non-Chidliak assets. DO-27 is one of the only diamond resources in the Slave craton region of the NWT that is not yet slated for development. In 2007, we valued a parcel of over 2,000 carats from DO-27 and since then diamond prices have risen on average 65%, which has positive implications for DO-27's potential economics. We believe there are more economic diamond districts to be found in North America and our extensive diamond exploration databases give us a competitive edge in that quest. With over 30 years of diamond exploration and project evaluation experience, the first 15 years of that in the United States, and the remainder in Canada, Brooke Clements is well-suited to lead this effort to maximize shareholder value."

Mr. Brooke Clements, President and CEO of Peregrine Exploration stated, "With diamond prices projected to rise due to strong demand, it is a great time for Peregrine Exploration to advance its diamond properties and focus on finding the next diamond district. A key focus will be the DO-27 diamond resource which is located just 27 kilometres from the Diavik Diamond Mine and 35 kilometres from the Jay kimberlite at the Ekati Diamond Mine, where a pre-feasibility study was recently completed. With a resource of 18.2 million carats DO-27 is ideally positioned to play a role in the continued evolution of the Lac de Gras diamond district. There is excellent potential for the discovery of another prolific diamond district in North America and I believe that our proprietary diamond exploration databases and the unparalleled experience and expertise of the Peregrine team gives us a real strategic advantage to make that discovery."

PEREGRINE DIAMONDS WARRANTS

Peregrine Diamonds wishes to remind holders of the upcoming expiry of the Company's warrants issued as part of a rights offering completed on October 6, 2014 that these warrants will expire in accordance with the terms as announced.

The warrants will trade on the Toronto Stock Exchange until 12 p.m. Eastern Daylight Time (9 a.m. Pacific Daylight Time) on April 6, 2015 and will be delisted at market close on April 6, 2015. Warrants can be exercised at any time up to 5 p.m. Eastern Daylight Time (2 p.m. Pacific Daylight Time) on April 6, 2015. For further information regarding exercising of warrants please contact your financial advisor or broker.

LAC DE GRAS PROJECT (DO-27 Kimberlite Pipe)

The DO-27 kimberlite on the WO property is located 27 kilometres southeast of the Diavik Diamond Mine and 35 kilometres south-southeast of the Jay kimberlite pipe at the Ekati Diamond Mine. On June 24, 2008, the Company reported an Indicated Mineral Resource of 18.2 million carats of diamonds in 19.5 million tonnes of kimberlite at DO-27 at a grade of 0.94 carats per tonne. In addition, a target for further exploration of 6.5 to 8.5 million tonnes of kimberlite has been identified and the kimberlite is open at depth. The range of diamond values determined for a 2,075 carat parcel from DO-27 in 2007 was US$43 to US$70 per carat, with a base case of US$51 per carat. WWW International Diamond Consultants who performed the DO-27 valuation, advised Peregrine Exploration this month that diamond prices have increased an average of 65 percent since then, with increases ranging from 50 to over 70 percent depending on diamond quality and size, and that current DO-27 prices are expected to be within that range.

Approximately 20 tonnes of kimberlite drill core recovered from DO-27 during the 2007 resource development program is stored in Yellowknife and available for processing to assess the diamond grade in certain parts of the kimberlite and further evaluate potential future commercial processing options. On July 24, 2007, the Company reported the results of scrubbing tests that showed that DO-27 would be amenable to efficient mechanical pre-concentration that could significantly reduce the amount of material that would need to be transported to and processed by a third party diamond recovery facility. Low pressure and high pressure scrub tests without crushing were completed on 890 and 270 kilograms of drill core respectively. Kimberlite collected from 61 to 121 metres depth had a scrubbing concentration factor of 10:1. Under these conditions, kimberlite material with a grade of 0.94 carats per tonne could have its volume reduced ten times and have a concentrate grade of 9.4 carats per tonne. More competent material collected from 121-181 and 181 to 275 metres depth had concentration factors of approximately 3.3:1 and 2.3:1 respectively. This material could be an excellent blending stock for a third party facility.

Peregrine Exploration believes there is potential to discover new economic diamondiferous kimberlites on its 8,493 hectare Lac de Gras project. The last three reported kimberlite discoveries in the Lac de Gras district were made by Peregrine Diamonds in 2012 (see April 24, 2012 News release). In 2015, the Northwest Territories Geoscience Office ("NTGO") is conducting a surficial mapping and kimberlite indicator mineral study in the Lac de Gras region. Approximately 50 small diameter reverse circulation ("RC") holes are scheduled to be completed on Peregrine Exploration mining leases. Results from the NTGO program, expected by year-end, are expected to assist Peregrine Exploration in defining new kimberlite targets on its claim block.

Source: http://www.pdiam.com/

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