Will P on stockhouse today and last Fridaytodays first:
Eric Friedland's Peregrine Diamonds Ltd. (PGD) jumped 3.5 cents to 36.5 cents on 411,000 shares. The company, which had $8.7-million in working capital at the end of the year, raised another $11.85-million from the exercise of 56.5 million warrants at 21 cents earlier this month. The warrants originated in Peregrine's big rights issue, which raised $15.1-million through the sale of 71.9 million shares and attached warrants last fall. (Less than 80 per cent of the warrants were exercised by their April 6 expiry date, which seems surprising now, given the subsequent surge in Peregrine's stock price.)
Peregrine had the support of a good number of retail shareholders and was heavily supported by two of its major shareholders, Mr. Friedland and his older brother Robert Friedland, who is now the company's largest shareholder. The elder Mr. Friedland exercised all his warrants; he also bought nearly nine million held by Peregrine's other big backer, Ned Goodman's Dundee Corp. (DC.A: $11.41). Mr. Goodman and his family have long been supportive of diamond explorers in general and Peregrine in particular, but their Dundee group of funds have been selling Peregrine stock lately to deal with redemptions of their various funds. In any case, Peregrine's most recent shareholders are undoubtedly content with the company's sudden spurt upward, and its work crews now have an ample treasury to complete their big exploration program this year at Chidliak, on southeastern Baffin Island.
Friday;
Eric Friedland and Tom Peregoodoff's Peregrine Diamonds Ltd. (PGD) fell five cents to 33 cents on 688,000 shares. Peregrine's mini-bulk sample of three Chidliak kimberlites is in full swing but the plan has changed somewhat. Last fall Mr. Peregoodoff, CEO, said Peregrine planned to extract about 250 kimberlites from each of CH-6, CH-7 and CH-44, the top three pipes at Chidliak, on Baffin Island. The company is now putting most of its effort into CH-7 so it can declare a resource for the pipe. (CH-6, the best Chidliak pipe, received a significant bulk sample in 2013 and the company produced a resource estimate last year.)
Mr. Peregoodoff says Peregrine's drill crews have wrapped up the third hole at CH-7 and have started a fourth. As a result, he now expects the test at CH-7 could produce up to 600 tonnes of kimberlite cuttings. The rig would then move to CH-6 for one quick hole, perhaps producing up to 250 tonnes. A single hole at CH-44 is also possible if the weather holds, but it is far from certain. Mr. Peregoodoff says the hole would be a waste of money this year unless Peregrine can be sure of getting enough rock to produce a resource estimate. If not, the test of CH-44 might be put off for another time. Chidliak hosts several other pipes considered of economic interest, so there should be ample opportunities for testing CH-44 in subsequent programs.
The subtle switch suggests Peregrine could have enough diamonds at CH-6 and CH-7 to support an initial Chidliak mine plan. Each pipe spans one hectare at surface, while CH-44 is roughly half that size. Peregrine currently credits CH-6 with 2.9 million tonnes inferred and a target for further exploration of up to 3.5 million tonnes, all of it grading about 2.6 carats per tonne with a diamond value of about $200 (U.S.) per carat. The grade is lower at CH-7, about one carat per tonne, based on a tiny mini-bulk sample a few years ago. It hosted a target for further exploration of up to four million tonnes, and the expanded drilling suggests Peregrine could come close to, or exceed, that target. The two pipes could therefore host just over 20 million carats on their own.
Peregrine should have considerably more kimberlite and diamonds beyond those two pipes. The current target tonnage at CH-44, which could have a grade similar to CH-7, is about two million tonnes. The CH-1 pipe is potentially of greater significance. It spans six hectares and a 2.3-tonne test averaged 1.56 carats per tonne, but it is considered to be geologically complex. ("Complex" is often code for "problematic" and that appears the case at CH-1, where some of the kimberlite carries a significantly lower grade and some is diluted by embedded chunks of barren country rock.) Nevertheless, CH-1 -- or at least a part of it -- is likely to be included in a Chidliak mine plan. A few other nearby pipes could make the grade as well.