Peregrine Diamonds Ltd. PGDIF

RE:RE:RE:RE:$12 per oz

[ekim]

PEA is not as precise as an FS report.

They will use geography and costs based on the information out there to create a  reasonable cost estimate +/- 20 to 40%.

The revenue side is dead easy. They can use measured/indicated or inferred resources in PEA and for a PFS or FS...they can only use measured/indicated.

How one upgrades a kimberlite pipe to indicated is probably more in confirming the value, a little bit about grade and less about tonnage quantity. Totally different then a traditional gold vein where they may have to spend a lot of time doing infill drilling. A confined pipe doesn't have that problem.

So back to costs. in a PEA, they might use a cost per tonne of surface material (waste or ore) and figure it is $3/tonne to $3.5/tonne and pick a value of $3.25 and run with it.

In an FS...they use what is called first principles. They figure out the drill pattern for the blast, how many ANFO will be needed, blasting caps,  how many drilling rods they need and when will they get replaced etc. They get costs of the equipment from manufacturers, etc.
Trying to go from more of a rough estimate to a more precise figure.

I have also been told that PEA's are not necessarily the most optimum scenario. It basically is to confirm a profitable scenario that has enough brunt to move it into the next stage...whatever that means for that specific company. To PFS, to FS....or what have you. A company like rio Tinto or De Beers...if they own it all...they do inhouse studies all they want...it is there money to spend.... so a lot of projects that get gobbled up by big companies...lose complete transparency to the rest of the world.

I'm sure we don't know a lot about Victor mine. All based on what De Beers feeds the world.

"how important is this PEA in the big scheme of things?  I'm assuming it's not a make or break report?"

PEA's that don't get published...basically mean the company has to go back and drill some more to get more value to the project or close the project altogether.
PEA's that do get published...do give a positive scenario...but the contents of the PEA are quite important rather then just having published a PEA.

PGD has basically said they would not published a PEA unless they know they have a robust scenario that can be challenged and still makes it.

LONG...PGD

EKIM