Mining News: Northern Neighbors: Peregrine to explore Chidliak underground

Peregrine Diamonds Ltd. March 6 reported that a recently completed internal study indicates that development of adding underground mining to the proposed development of an open-pit mine at the company’s CH-6 kimberlite pipe may enhance the economics of this diamond project on the Chidliak property in Nunavut. A preliminary economic assessment completed last summer by JDS Energy & Mining Inc. envisioned an open-pit diamond mine with a life of roughly 10 years. Production would start at the CH-6, a kimberlite with 4.64 million metric tons of inferred resource averaging 2.45 carats per metric ton (11.39 million carats) diamond to a depth of 260 meters, followed by CH-7, a kimberlite with 5.99 million metric tons of inferred resource averaging 0.85 c/t (4.23 million carats) diamonds to a depth of 240 meters. The internal study, completed in consultation with JDS, indicates the potential to substantially enhance the economics of Chidliak by incorporating an underground mining operation below 260 meters at CH-6. As a result of this conceptual study, Peregrine has planned a 4,000- to 5,000-meter drill program targeting the potential underground resource to depths up to 500 meters. Drilling is scheduled to begin in June and the company anticipates the completion of an updated resource estimate that includes the deeper underground resource before the end of the year. If the deeper resource is of sufficient size and diamond grade, a new PEA that includes underground mining could be completed in the first quarter of 2018. In addition to drilling, the 2017 program will include geotechnical work for the open-pit portion of the proposed mine, and environmental studies to support permitting of a mine and supporting infrastructure at Chidliak. This program is expected to cost around C$7.5 million.

-Shane Lasley