Peregrine Diamonds Ltd. PGDIF

Front End Loaded

[ekim]

This project is so front end loaded. Completely an exception for most of the industry.

#1 - You can focus your initial pit on the super high grade cylindrical pipe of CH-6.

Depending on how aggressive you get on the underground, you could bring it early in the mine plan and selectively mine out the super high grade material to feed the mill.

If they bump up the mill size to 1 mtpa....and they try to fill up the first year of production with super high grade material...you get 4 cpt x US$200 x 1.33 conversion x 1 million tonnes = CAD$1 billion revenue at an operating cost of CAD$100 million at capital cost of CAD$500 million.

You end up with CAD$400 million excess at the end of year 1 production that gets not fully taxed because you have tax benefits on file...maybe a CAD@200 million dividend?

Geez.

We already saw JDS front load the PEA with deferring CH-7 to later instead of blending the two pipe mill feed.

Now with a underground at CH-6...there is the ability to compartmentalize CH-6 into the 2 cpt stuff and the 4 cpt stuff.

You can't front end load most deposits, most mine plans.
You can at Chidliak.

LONG...PGD

EKIM

[ekim]

CH-6 is basically a highly valued condensed small in size deposit. Rule of thumb if that a 500 metre depth underground mine can send 2 to 2.5 million tonnes of material up a single ramp without traffic issues and ventilation issues getting the way. We will never see a 2 mtpa mill at Chidliak. Maybe a 1 mtpa mill or a 1.5 mtpa...and if they upsize it to that point...they will get material from

[mill44]

It also shows you the issues when expecting a deal.

[ekim]

With this summer programme...it is going to boost the NPV and the IRR signfiicantly...not a minor move. Maybe that is what the deal makers are looking for. More money to spread around. LONG...PGD EKIM