PEA conference call

The post PEA conference call is now complete.

Here is a link to the archived webcast -- Webcast replay

Here is a link to the presentation -- July 12 2016 presentation

There were a lot of details given that were based on the PEA press release that went out...but there were also some details and talk that went beyond the PEA press release. What were those details?

1 - They left a few million carats in the ground that were not included in the PEA. Why?
On slide 29 in the presentation, it references a pit angle of between 35 degrees and 48 degrees as  an input parameter into the Pit shell creations. This is a portrayed as a conservative parameter and may be a symptom of a lack of geotech information in the country rock surrounding the kimberlite pipes.

The reality is that the CH-6 and CH-7 pipes are high value, but low foot print pipes. Pit wall angle subsequent strip ratio can have a material effect on the amount of waste needed to be removed.

Here is the blog post on strip ratio -- Strip Ratio - CH6 and CH7
The charts themselves go from between 45 degrees to 70 degrees of pit angle and it can be clearly seen when you head toward 45 degrees, that the strip ratio goes significantly higher...especially at 260 metres depth for CH-6.

Result - Geotechnical drilling should be able to move the pit slope angle higher, it is just a question of how much higher. This will have a material effect on the waste movement and strip ratio and the NPV as well. It also highlights that are you going even deeper, the strip ratio does get higher and higher. An underground mine design of the pipe(s) must be considered at some point as this strip ratio gets too high.

2 - All weather road was clearly detailed as to why it is the best option at Chidliak. What else was new on the call.
  a - The Nunavut Land group already have a proposed (draft) transport corridor along this all weather road route.  This was started in 2014 and was probably set up with intent that Chidliak will become a mine. What wasn't mentioned was that Nunavut also requested and now has an official diamond valuator of diamonds. This was done a few years ago as well.
 b - 100% of the capital cost of this road is included in the capital cost for this PEA (~30% of total capital cost). There were options of synergies on the call that wasn't mentioned before. The first one potential access to federal infrastructure funding. The federal government may chip in some $$'s to help pay for the road. The second one is the sharing of the road by a potential Hydro Electric plant from the Energy corporation. There is a potential hydro site ~15 km's away from Chidliak and if that were to be developed...access to an all weather road would be used and the costs of developing that road could potentially be shared.

3 - Greenfield versus Brownfield -- Article on the difference
 - Each kimberlite at Chidliak has been looked at as something that needs to pay back capital, pay for a mill, pay for infrastructure, etc. Now that they have a portion of CH-6 and CH-7 has having the ability to payback all these costs and generate a profit, all other kimberlites can be examined as an incremental resource. They need to be able to pay for themselves and generate a profit...they don't have to pay for a mill, they don't have to pay to build a road, etc. This was highlighted throughout the call. The upside is significant.

4 - Permitting - It was highlighted that permitting of the all weather road is a must to get started on as the other construction efforts will require that road to be built before proceeding. Not mentioned in the call, is that when the road gets built...it opens up significant savings to do some serious exploration around the site.

5 - Other material not in the PEA or potential upside of material.

A reference of the KIM-C material was highlighted in the PEA pit as being kimberlite material with diamonds in them...but not enough information to categorize it as a resource. This is about 250K tonnes that is treated as net cost to the project (waste material to be moved)...when in reality, it will be fed through the mill and TBD generate a certain amount of profit.

The effect of the LDD RC drilling and the associated breakage was highlighted on the CH-7 results. It was implied that value and volume (grade) will go up from here ("Quietly confident")

Two of the newer zones (R and S) out of CH-7 was also highlighted as being conservatively assigned to Domain 2 grades/values...when they might actually be more like one of the other higher grade, higher value domains within CH-7. More work is needed.

6 - No questions asked during the end of the call.
It appears there were questions that wanted to be asked...but for some reason, they didn't get through.
Anyone with questions should email Peregrine directly at info@pdiam.com and hopefully Peregrine will relay the questions and answers to the press.