Peregrine Diamonds Ltd. PGDIF

RE:from Open Pit Only to OP + Underground

[Silverwhere]

PART 2:

See below for some Aug 19, 2016 NI 43-101 excerpts – for Open Pits Only. See how the focus is on CH-6 for the first 6 YEARS of Open Pit operations, then CH-7 afterwards. These only offer a glimpse at the NI 43-101. The link to the whole report is at the bottom of this part 2 post.
 
The original prelim Aug 19, 2016 NI 43-101 prepared by JDS, SRK, and Mineral Services focused 100 percent on Open Pit mining only over a ten-year LOM at both CH-6 Open Pit (Years 1-6), and CH-7 Open Pit (Years 7-10).
 
Page 1-1 (pdf page 14 of 311):
 
Peregrine Diamonds Ltd. (Peregrine or Peregrine Diamonds) commissioned JDS Energy and Mining Ltd. (JDS) to complete a Preliminary Economic Assessment (PEA) for the Chidliak Phase 1 Diamond Project (Chidliak project or Chidliak), located 120 km northeast of Iqaluit, the capital of Nunavut, on Canada’s Baffin Island. The purpose of this study is to obtain and document a preliminary project design and economics.
 
So the original Phase 1 was to be CH-6 Open Pit (Years 1-6), and CH-7 Open Pit (Years 7-10), no underground, with a LOM of 10 years total. These original prelim development plans and LOM might be in for some big boosts & tweaks post-2017. To be sure, CH-6 is the odds on favorite PGD horse – our prize thoroughbred!
 
...
 
The CH-6 and CH-7 deposits are conducive to open pit mining and are envisioned to produce a total of 7.1 Mt of processing plant feed, and 51 Mt of waste (7.2:1 overall strip ratio), over a 10 year mine life.
 
The kimberlite processing plant and tailings management facility (TMF) will be located within 2.5 km of the CH-6 pit, as it contains the higher value resource, and would therefore be mined first. The TMF will be designed as a conventional facility, planned to be located adjacent to the processing plant.
 
 
Page 1-7 (pdf page 20 of 311):
 
It is planned to open pit (OP) mine the Chidliak CH-6 and CH-7 deposits
 
Page 1-10 (pdf page 23 of 311):
 
The capital cost (CAPEX) estimate includes all costs required to develop, sustain, and close the operation for a planned Phase 1, 10-year operating life. While it is likely the eventual LOM will be extended through successful additional resource development, this study is limited to the Phase 1 development (i.e. the Chidliak Phase 1 Diamond Development Project Study is the open pit portion only).
 
Page 1-15 (pdf page 28 of 311):
 
It is estimated that a PFS and its supporting work programs (programs - plural) will cost approximately $15.8 M. Major components of future work recommended are:
 
• Deep core drilling at CH-6 to better quantify the TFFE and possibly upgrade it to a Mineral Resource;
 
• Bulk sample CH-6 via surface trench and LDD in order to potentially upgrade the Inferred Mineral Resource to Indicated level; and
 
• Process engineering and geotechnical programs to better qualify process engineering requirements and refine mine design.
 
Page 2-1 (pdf page 29 of 311):
 
Scope of Work
 
This report summarizes the work carried out by several consultants and the scope of work for each company is listed below, and combined, makes up the total project scope.
 
JDS scope of work included:
 
• Compiling the technical report including historical data and information provided by other consulting companies;
 
• Establishing an economic framework for potentially mineable resources;
 
• Open pit (OP) mine planning and scheduling;
 
• Selecting mining equipment;
 
• Develop a conceptual flowsheet, specifications and selection of process equipment;
 
• Designing required site infrastructure, identify proper sites, plant facilities and other ancillary facilities;
 
• Estimating mining, process plant and infrastructure OPEX and CAPEX for the project;
 
• Preparing a financial model and conduct an economic evaluation including sensitivity and project risk analysis; and
 
• Interpreting the results and make conclusions that lead to recommendations to improve value and reduce risks.
 
 
Page 16-20 (pdf page 185 of 311):
 
The production schedule for the Chidliak deposits incorporates the various pits and pit stages mentioned above. Inferred resources at CH-6 and CH-7 comprise the entire Phase 1 ten year LOM plan.
 
Page 16-21 (pdf page 186 of 311):
 
Table 16.9: Proposed LOM OP Production Schedule (see pdf link below for spreadsheet)
 
Page 16-24 (pdf page 189 of 311):
 
(Prelim Ten-Year) Mine Development Schedule in bullet points (see pdf link below)
 
Years 1 to 6    -  The focus is entirely on CH-6 Open Pit development
Years 7 to 10  -  The focus switches to CH-7 Open Pit development “over the final years of the LOM plan”
 
(Prelim Only – subject to HUGE changes based on 2017 site work – especially CH-6!)
 
https://www.pdiam.com/assets/docs/technical-reports/peregrine-jds-chidliak-pea.final.2016-08-18_reduced.pdf
 
This one sounds like a Friedland quote:



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Silverwhere wrote:
The Aug 2016 PEA studied Open Pit Only at CH-6 and CH-7. The PEA was a prelim study to table some base numbers (“The purpose of this study is to obtain and document a preliminary project design and economics”). We now shift to a higher CH-6 gear - to uncover additional high grade drill bit truth.
 
The big boys want to see more out of Chidliak so more CH-6 meat they will get. They want more CH-6 proof to make it worth their while to get involved. CH-6 is & always has been the priority. It holds the key to PGD’s initial mine development success.
 
As ekim stated: “More CH-6 tonnage lessens the averaging down of the CH-7 margin” & this terrific post (thanks ekim!):
 
https://www.stockhouse.com/companies/bullboard/t.pgd/peregrine-diamonds-ltd?postid=25939086
 
So to quote Emeril: “Bam! Let’s kick it (CH-6) up a notch”.
 
VANCOUVER, BRITISH COLUMBIA--(Marketwired - March 6, 2017) - Peregrine Diamonds Ltd. (TSX:PGD) ("Peregrine" or "the Company") is pleased to announce that it has completed an internal concept study of a potential open-pit plus underground mining development at its 100% owned CH-6 kimberlite pipe at the Chidliak Diamond Project near Iqaluit, Nunavut, Canada. The study was completed in consultation with JDS Energy & Mining Inc. ("JDS").

The study has concluded there is the potential to substantially enhance the economics of the Chidliak Project by incorporating an underground mining operation below 260 metres of depth at CH-6, the current bottom of the open pit Inferred Resource defined in the August 2016 Preliminary Economic Assessment ("PEA") (see below). As a result of this conceptual study, a drill program targeting this deeper kimberlite is planned to commence in June 2017 to expand the resource to depths up to 500 metres below surface. In addition to the resource expansion drilling, geotechnical work and environmental studies in the Chidliak Project area and proposed transportation corridor will continue.
 
CH-6 PEA AND OPEN PIT PLUS UNDERGROUND CONCEPT STUDY
 
JDS completed a positive preliminary economic assessment titled "Preliminary Economic Assessment Technical Report of the Chidliak Project, Nunavut, Canada" dated August 19, 2016 on a Phase-One open-pit only mining operation of the CH-6 and CH-7 kimberlite pipes.
 
In December 2016, the Company engaged JDS to complete an internal, concept-level study on the project economic uplift that could be realized by developing the CH-6 kimberlite to a depth of 500 metres as a combined open-pit plus underground mining operation. The results of this study are excellent and have significantly changed the specifics for the 2017 work program. The study clearly demonstrates the benefit of focusing the 2017 program on proving the resource potential at CH-6 below 260 metres, the current bottom of the Inferred Resource in the PEA.
 
2017 CH-6 WORK PROGRAM
 
The 2017 work program at Chidliak will now focus on three main objectives:
 

• Expansion of the current Inferred Resource at CH-6 - through diamond core drilling of approximately 4,000-5,000 metres to further demonstrate geological continuity, establish pipe margin pierce-points and obtain spatially representative kimberlite samples for caustic fusion diamond assay. The main objective will be to increase the depth of a categorized resource from 260 metres to 500 metres. Caustic fusion results will be used to model diamond grade and grade distribution of the kimberlite to 500 metres.

• Refine open pit geotechnical design parameters - as part of the 2017 drilling program, oriented HQ diameter core and other geotechnical data required to refine the open-pit parameters, particularly the pit slope angles, will be acquired. This data will enable assumptions regarding open pit design to be tested and further refined.

• Advancing permitting - through continued environmental monitoring programs of the Chidliak Project area and the proposed transportation corridor.

 
The Company is currently working with Mineral Services Canada to finalize parameters for the 2017 drill program that would support robust future resource estimates. All necessary preparations to initiate this program, including equipment acquisition and camp preparation, were completed in 2016 and all permits have been obtained. The Company expects the microdiamond analyses to be completed in the third quarter of 2017 and anticipates an updated resource for CH-6 to be declared in the fourth quarter. If the resource at depths below 260 metres is of sufficient size and diamond grade, a new PEA outlining an underground mining operation for this material, in addition to the existing open-pit operation, could be completed in the first quarter of 2018. Total cost for the 2017 work program is estimated at C$7.5 million.
 
https://www.marketwired.com/press-release/peregrine-diamonds-completes-internal-ch-6-open-pit-underground-mining-study-revises-tsx-pgd-2200618.htm
 

If this CH-6 OP + UG eureka moment delivers the goods (to become the diamond darling “ show me the beef ” corporate crowd pleaser) well, be prepared to buckle up!

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