Peregrine Diamonds Ltd. PGDIF

Will Purcell comments re. Peregrine.

[cohoe]

lways tough to promote. Mr. Britt is (hopefully) close to producing a dream sheet for the large tonnage play.

Eric Friedland's Peregrine Diamonds Ltd. (PGD) dropped five cents to 48 cents on 1.01 million shares on its valuation for a 1,013-carat parcel collected at CH-6, the main pipe at Chidliak, on Baffin Island. The gems were appraised at $213 (U.S.) per carat and the modellers determined a median value of $188 (U.S.) per carat, numbers that straddle the company's goal of $200 (U.S.) per carat. The result, one of those rare cases with a modelled value lower than the appraised value, occurs when the appraised value is inflated by large, quality stones beyond what a small parcel would normally yield. Perhaps, but Peregrine was unlucky with the first 220-tonne portion of its 400-tonne mini-bulk test last fall. Either way, CH-6 has an apparent rock value of $500 per tonne, and with an estimated 5.7 million tonnes of kimberlite present the gross value of $2.8-billion (U.S.) would seem economic. Peregrine can enhance Chidliak by evaluating several nearby pipes with potential grades of one carat per tonne. Peregrine's stock nevertheless fell as retail investors seemed disappointed. Internet pundits had touted much higher numbers to one another based on exuberance for the company's colour story. The parcel contained an unusually high proportion of yellow diamonds that many investors assumed were fancies. (Over time, even Peregrine's browns developed a pinkish hue to more imaginative investors.) Although there was nary a fancy to be found, Mr. Friedland is sticking to his pitch: the depth of colour suggests "fancy yellow diamonds may be found in a production scenario." No matter -- white diamonds invariably account for the bulk of the diamond value in a diamond mine and Mr. Friedland certainly has plenty of valuable whites to support his pla