From William StockwatchEric Friedland and Tom Peregoodoff's Peregrine Diamonds Ltd. (PGD), up one cent to 22.5 cents on 374,000 shares, is cutting costs while it seeks to advance its Chidliak diamond project on Baffin Island. In one austerity move, Peregrine will share Mr. Peregoodoff, its president and chief executive officer, with Robert Friedland's Kaizen Discovery Inc. He replaces Eric Finlayson, who had held the job on an interim basis since spring and will remain with Kaizen as a director. Mr. Finlayson, a former Rio Tinto man, has also been president of Robert Friedland's High Power Exploration Inc. for the past three years. (The two Friedland brothers are major investors in Peregrine, the larger of the two companies.) Peregrine's strategy for advancing Chidliak -- short of raising the $15-million needed for a major exploration push again next year -- is to find a co-venturer willing to do the big spending. Mr. Peregoodoff, wearing his Peregrine hat, says that the company is "continuing discussions with various entities" regarding options to finance future work programs and push the project toward production. (When he says that "there can be no assurance that these discussions will be successful," he is uttering more than regulator-soothing boilerplate -- those talks are rumoured to have been going on for months with nothing to publicly show for it. Further, Peregrine once had a partner willing to do the heavy lifting, De Beers Canada, but three years ago, it backed out of an option to invest over $58-million for a 50.1-per-cent interest in Chidliak.) If none of the "entities" being chatted up agree to a deal, Peregrine will have to finance the recommended $15-million program of drilling and bulk sampling needed to expand and upgrade the resource at Chidliak, or delay the work by as much as a year. Retail investors who have complained vociferously about Peregrine completing rights offerings at significant discounts -- offerings in which they can participate -- would appreciate the effect on the market of a forced delay at Chidliak even less. (Coincidentally, Robert Friedland's Kaizen Discovery is just wrapping up a $7.3-million rights offering to advance its Pinaya copper and gold project in Peru.) With or without support from some yet unnamed entity, Chidliak is a promising diamond project. Peregrine completed a preliminary economic assessment of two pipes on the project last year, deriving a discounted net present value of $471.2-million for a mine that would cost $435-million to build. The dream sheet was based on 11.4 million carats inferred at CH-6, valued at about $150 (U.S.) per carat, and another 4.23 million carats at CH-7, valued at nearly $115 (U.S.) per carat. There are plenty more carats lurking in rock needing further exploration to become a resource, and there are several other Chidliak pipes that could potentially be economic with further exploration.