Peregrine Diamonds Ltd. PGDIF

Yes we can value the royalty

[oiltar]

First thanks mike for the update.The royalty is worth fighting for big time.

We can use royalty benchmarks set by the biggest streamer in the mining business Franco Nevada.

franco bought a smelter royalty from Midas gold for $15 million on its Golden Medows proposed mine in Idaho.Midas has a 5 million oz gold deposit grading 1.67gt open pit.The gross value of the in situ ore is around $6 billion US.So Franco is going to collect $107 million at the low end if the gold price stayed fixed at $1200 over the mine life.But we should expect the spot price to rise over the 20yrs so the royalty would be worth a lot more than $107 million pay out.

PGD is holding the CH-6 ore valued at 18.2 million cts @ $250 CDN or $4.5 billion.My estimate for CH-7 is bentween 1.3ct and 1.5ct and 6 million tons for a gross 9 million cts or $2.2 billion using the CH-6 valuation.This in situ vale combined is $6.7 billion CDN .So the BHP Royalty is worth slightly more for 2% over the Midas 1.7% $15 million price tag.

Its worth the fight as Diamond prices will likely double over the mine life of PDG pushing up the in situ value of over $14 billion making that royalty worth much more that $15 million.Because PGDs diamond ore is 8 times as rich as Midas gold ore the cash steam is much stronger from PGD over Midas

Franco-Nevada completes US$15 million royalty transaction ...

[aea257]

Oiltar can you help a newbie out here. You write that CH-6 has a value of $4.5 billion, which that I have read here and on the website. CH-7 I have been reading could be as good or better than CH-6, but you only value it @ $2.2 billion. Can you help me out. I think I'm misunderstanding something. 

[ekim]

Ch7 diamonds might have better value per csrst, but ch6 still trumps ch7 because it has higher grade. More diamonds oer tonne.  Like ch6 has 40 nickels and ch7 has 10 dimes. You would rather have a dime than a nickel but you would still rather have 40 nickels vs. 10 dimes. Long...pgd Ekim

[aea257]

Thanks. That makes sense. 

[oiltar]

aea257 Thanks for the question. My estimate for CH-7 is lower than CH-6 due to expected lower grade in CH-7.But CH-7 has a higher population of white  85% diamonds than CH-6 at 75%.It also may have bigger diamonds but we will wait to see. But lets put it into world context average world diamond mines have on average 10% white diamonds so CH-6 and CH-7 are 7 to 10 times the world average.We

[aea257]

So based on these figures we could see a 15 billion bid to take out Chidliak.  15 billion/300 million . $50.00 SP?

[MrBigger]

Give your head a shake! Now it's just getting silly. I am hoping we see 30 cents again.

[ekim]

Insitu value is basically forbidden as a way for any company to value itself. They still let the aussies do it. We can do it all we want. 15 billion would be the potential value for chidliak diamonds. You still have to pay to extract them and buy expensive mining equipment. Many uncertainties. Long...pgd Ekim  

[oiltar]

Not $50 but $1 bilion is not out of the question by JK