Peregrine Diamonds (TSX: PGD) completed an $8.5-million summer work program at its Chidliak project, 120 km northeast of Iqaluit, this year focused on expanding resources at the CH-6 kimberlite.
The work included a 5,288-metre core drilling program at CH-6 to expand resources below 260 metres depth, where the current resource ends, to 500 metres depth. The 15-hole program confirmed that the kimberlite extends beyond 500 metres depth.
An internal concept study completed earlier this year showed that the project’s economics could be improved by considering underground development at CH-6. A preliminary economic assessment (PEA) released last summer projected positive economics for open pit development of the CH-6 and CH-7 kimberlites.
With a preproduction capex of $434.9 million, the project’s after tax net present value was calculated at $471.2 million and its IRR at 29.8%. Over a mine life of 10 years, the mine was projected to produce an average of 1.2 million carats per year.
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