Peregrine Diamonds Ltd. PGDIF

An old but wise friend.

[xDeBeers]

I caught up with one of my friends and colleagues over the Xmas break. He did all the evaluation work at the De Beers Victor mine among others. He is also of the (expert) opinion that Chidliak will be a mine. He made several other interesting points:

1. While I have always said that the Chidliak plant will be small and far less capital intensive, he reminded me that production costs will increase with a smaller plant.

2. Pushing an ice road over tundra is much easier than over big rivers and lakes.

3. Gahcho Kue was found in ~2000 and it is only coming on line now. Took ages to get to mining stage.

4. A botswanan pipe that De Beers sold for $13M to Lucara was assessed at 130$/ct by De Beers. Lucara guessed the larger diamond population was there and had not been sampled properly. They changed the crushers to allow larger diamonds through and now the mine is at $500+/ct. They have sold individual diamonds for over $20M. Bottom line. De Beers makes mistakes. Of course I never did when I worked there :D.

I can't confirm points 3 or 4.

FWIW. This geo is heavily invested in graphite in Mozambique. He thinks it will become a bulk commodity like iron ore.

Quite a few stories appearing on-line about what to invest in, in 2015. Diamonds tops the list due to the rapid $/ct price increases in 2014.

[xDeBeers]

Oh, he was also of the opinion that PGD management was getting a bit fat and uneccessary. I *somewhat* agree with this. Hugo Grenon would have known enough to find all the kimberlites. The number of geos sitting in offices is getting too high. They need more experience at the coal face, so to speak, and perhaps more people should be on seasonal contract. Especially when there is a downturn and

[ekim]

Unfortunately (or fortunately) we do have a million $$ management team. Significiant experience and Eric does have a lot of $$'s...but costly none the less. That is obviously why drilling onsite is very important. If the project was down throttled and had 1 or 2 million $ budget every year, mgmt would be too fat to justify. LONG...PGD EKIM

[Fivecarat]

How old, not important, how wise, important. Specifically, why does this person believe based on what we know, that this will be a mine?  Thx...

[xDeBeers]

He was talking from his *professional* opinion. Emphasis on professional. It was his job to evaluate diamond projects and bring them into production. Hence his wisdom. I didn't ask why -because I already know why. The current numbers PGD has delivered such as tonnage, grade and valuation all indicate this will be a mine - in *our* professional opinion.

[ekim]

Only one reason why we know this is going to be a mine. Mgmt is blatantly ignoring $600 rock value between 250 metre to open at depth underneath ch-6. Drilling has already been factored into the mining phase...not the exploration phase. IMO, they've already stripped this area from exploration drilling and dumped it into brownroots drilling. They have no intention of ballooning the inferred

[Kodiboy]

Ekim and X, nice points and observations. Nice to see some discussion back to fundamentals that will succinctly drive this play forward and hopefully to the fruition of a mine that hopefully we will see as SH's not outsiders.

[ekim]

On points 1 and 4. 1. It is a diamond mill (high recoveries), no froth flotation, no autoclave, no cyanide, no biox (bugs). Rather simple mill process. I'm assuming mill costs would be directly related to energy/heat use...but yes, bigger would probably be cheaper ($/milled tonne).  I would say that Peregrine should focus on a modular unit that is scalable within reason. Start off