Stakeholders

As grassroots exploration project transitions into a development project and then to permitting and finally construction leading to an operating mine, the list of key stakeholders grows.

*Information in this current blog is based on information obtained up to mid 2018 and should be considered legacy at this time and should no longer be relied upon.*

Chidliak is at the stage of resource development and is transitioning into the permitting and financing stage. This page will list the key stakeholders (now and in the future).

Shareholders:

These stakeholders have the direct equity stake in the project. Robert Friedland would be the biggest stakeholder next to his brother Eric. Other insiders have a position in the company as well. Then you have the retail owning just over half of the equity. Most of this is in the public investor's hand as fund and institutional investment in Peregrine Diamonds is mostly absent.

The return that the shareholders would like is highly leveraged to a monetary gain. This can completed through capital appreciation (value of the whole project rises over time) or in dividend payments (profit sharing during the operating years).

Employees:

A significant number of the employees of Peregrine Diamonds are highly skilled and educated on the geology side of the equation. They are a very important stakeholder up to a construction decision. Once construction is completed and the mine is in operation, there is a significant amount of exploration to be done in and around Chidliak and some of these employees would be perfect for continuing this work. In the long term, there is a chance that other subsidiaries or spinoffs of Peregrine Diamonds will need further work. This is another fit for many of these employees.

Future Employees:

The current management and staff at Peregrine Diamonds will only get this project to a certain point. They will need to bring in a different skill-set to move into mine construction and operation. A much larger employee footprint will be needed at that point.

Communities:

Several communities will be effected directly or indirectly by development and construction of a mine at Chidliak

Iqaluit - Iqaluit is the closest community to Chidliak. This will be the major hub of employment and resources for Chidliak. Even now, the community benefits significantly from annual field programs at Chidliak. An actual construction and operation of a mine would be a huge economic boon for Iqaluit. Jobs, jobs and more jobs will be needed and created directly and indirectly. Indirectly, there will be a significant consumer/retail market that will need to be expanded in Iqaluit.

Pangnirtung - is further North East of Chidliak. There will be a potential for jobs at the minesite. If Chidliak proceeds with an all season road...it will make transportation during the winter season a lot easier to Iqaluit from Pangnirtung. A seasonal, well groomed, ice road would also be a big help.

Government:

Chidliak is a very high margin project and in those early years of production at CH-6, there will be a significant tax flow into the federal and territorial coffers. All levels of government will benefit from this, even Iqaluit will see some signs of this. The decision to develop a new deep water port at Iqaluit (joint project from the federal/territorial governments) may have been made easier with knowledge that it could help the economics of Chidliak and make it one step closer to becoming a mine. The new deep water port will go beyond the benefits of just helping a mine site, but makes up a significant part of Iqaluit infrastructure.

Diamond industry:

The industry might look a little bit dreary in the short term with production outstripping supply. There are several reasons for this and lots of information already available. Kimberlite pipes, for the most part, have a known expiry (depletion) date (unlike other minerals where new resources are found directly in the vicinity) and that is setting up for a big question mark on the long term supply of raw, rough diamonds. A mine like Chidliak will benefit in the long term as it will be supplying a market that will be squeezed for supply as the world's population keeps growing. Chidliak will not be able to make up for the imbalance, but will be able to tag along with  rising diamond prices.

Financial industry:

The decision's that will be made, once the PEA (preliminary economic assessment) is disclosed to the market place, will no doubt involve negotiations with a third party financial investment firm (of some sort) to figure out the fastest, yet most economic way of progressing the project. If a deal can be made, this will instantly bring in a significant stakeholder to the project.  There will need to be balance between current equity shareholders and this third party firm. This firm could made of multiple firms or just one. This stakeholder is a key cog to the whole development of Chidliak and sometimes it can take a lot of negotiation and even year's to finalize an agreement. There is no magic button here to bring in a stakeholder and the agreement that is worked out is one big step in that direction, but also does this stakeholder bring in other tangibles that are invaluable to the project.

Environment:

This goes back to the local communities and also the local population of animals, etc. It is a key stakeholder in any decision to permit and construct a mine. Diamond mining is by far one of the least invasive types of mining out there, especially when it comes to the milling/tailings of the project. There is no need for fancy metallurgy at any stage of the process. The kimberlite rock will enter the mill and go through the traditional DMS (dense media separation) and several stages of recovery once it becomes a heavy concentrate. The resulting tailings material should be relatively benign and it may be more of a fine sediment issue instead of a % chemical x and such. There are no lakes involved either which is a significant difference as compared to most diamond mines in Canada.

Other exploration companies:

This is an area where Peregrine Diamonds and Chidliak are different then most other projects in Canada. A lot of regions being explored right now have multiple exploration companies in the area. Some of these smaller companies are stakeholders in the larger companies results by proximity. Up until recently, the only other stakeholder was an attached royalty on Chidliak and that been bought back through a settlement and is now dissolved. Chidliak remains 100% owned by Peregrine Diamonds and there is zero other companies in the area because Peregrine Diamonds has expanded claims beyond the core portion of Chidliak. There is really no opportunity for another company to stake a claim in the proximity of all the existing kimberlites (71 kimberlites to date). Not only does Peregrine Diamonds have a the primary kimberlites to try and develop into a mine, they have a vast amount of land to explore and continue finding kimberlites. There is really no doubt that more kimberlites do exist, it is just a question of smartly spending existing cash on the biggest value at the present time.

Other diamond producers:

De Beers and Alrosa are the 2 biggest producers of rough diamonds in the world. Chidliak is big on value, but not necessarily quantity. There should not affect on either of these two giants if Chidliak does become a mine. The incremental supply to the world production will be minimal.