Baffin Island sparkles for Peregrine Diamonds

It’s not every day that you find diamonds outcropping at surface in the Arctic and some geologists will go a lifetime without ever seeing it happen.

But Eric Friedland is one of the lucky ones. In the last two months the chief executive of Peregrine Diamonds (PGD-T) has seen two kimberlite outcrops on the company’s Chidliak property on remote Baffin Island, about 150 km northeast of Iqaluit.

Typically kimberlite pipes of interest in the far north are under lakes, and can only be accessed by drilling from shore, or a barge, or from lake ice in the winter.

“We didn’t expect any of these to outcrop, it’s never happened in my career before,” Friedland said in a telephone interview from his Vancouver office.

Since the first discovery of its roughly six-hectare CH-1 kimberlite in July, Peregrine has found a second, three-hectare outcropping about 1.5 km away from the first.

Chidliak’s diamonds are about 700 km from the nearest known kimberlite occurrence.

CH-2 measures 20 metres by 25 metres and the kimberlitic material is similar to CH-1, consisting of kimberlite breccia and magmatic kimberlite.

“At an estimated six and three hectares respectively, CH-1 and CH-2 demonstrate that Canada’s newest diamond district has excellent kimberlite tonnage potential,” the company stated in a press release announcing the latest CH-2 discovery.

The Saskatchewan Research Council Geoanalytical Laboratories recently processed surface samples for diamonds by caustic fusion from two different CH-1 kimberlite units.

Sample 1B weighed 94.9 kilograms and returned 146 diamonds larger than the 0.075 millimeter sieve size, including 10 diamonds larger than the 0.600 millimeter sieve size.

Sample 1A weighed 100 kilograms and returned 44 diamonds larger than the 0.075 millimeter sieve size including two diamonds larger than the 0.600 millimeter sieve size.

“I don’t think anyone else has reported numbers like this in a very long time,” Friedland said. “For a first step to have such a small sample return so many coarse diamonds is very unusual and bodes very well for this project.”

“Twelve diamonds above the 0.600 millimeter sieve size in a cumulative sample of only 195 kilograms suggests a coarse diamond size distribution at CH-1 which is normally an indication that a population of commercial-sized diamonds will be identified in larger samples,” Brooke Clements, Peregrine’s president, noted in a prepared statement.

CH-1 and CH-2 are exposed at surface, which indicates there may be less overburden cover to contend with in the area, which will in turn lower exploration and bulk sampling costs.

“If you look at the diamond size and distribution and compare it with other projects I think it holds up as well or better to anything else that has been found,” Friedland noted.

“These may not be the best pipes on the property,” he added. “It’s fairly unlikely that we found the best so quickly. They occur in clusters so we have a high level of confidence that we’re going to find more on the property.”

SRC described the two largest diamonds from sample 1B as a colourless/white macle and a colourless/white fragment measuring 2.2 x 2.06 x 0.66 millimeters and 3.28 x 2.42 x 0.56 millimeters respectively.

Thirty-one of the 34 diamonds from samples 1A and 1B larger than the 0.300 millimeter sieve size were classified as having a colourless or white colour.

The next step is to ship out more samples to the SRC. Friedland said Peregrine will be taking a one-tonne sample from CH-1 and at least 300 kilograms from CH-2 and shipping them to SRC as soon as possiblepossibly at the end of August or in the first week of September.

As for follow-up work, Peregrine has also identified 65 kimberlite-type geophysical anomalies from its ongoing survey. “We’ve got about another 65 or more anomalies many of them with similar signatures to CH-1 and CH-2,” Friedland explained. “And our best indicator mineral trains haven’t been tested yet so I think there are a lot of legs left on this project. We’re just getting started.”

Chidliak is one of six properties in the Baffin Island region of Nunavut on which Peregrine holds prospecting permits. All together Peregrine’s properties there exceed 2.7 million hectares.

Peregrine collected a total of 970 till samples at Chidliak in 2006 and 2007, of which 286 samples, or 29%, contained kimberlitic indicator minerals. These include p-type pyrope garnet, eclogitic garnet, chrome diopside, picroilmenite, chromite and forsteritic olivine. A significant number of the kimberlitic indicator minerals were over 1 mm in size.

Kimberlite mineral grains larger than 1 millimeter are not common and are often a strong indication of a proximal kimberlite source. Ten percent of the 2,284 p-type pyrope garnets that were analyzed by electron microprobe are classified as high-chrome, low-calcium G10 garnets G10 garnets are commonly associated with diamond mines throughout the world.

Of the 970 samples collected on Chidliak, 220 contained at least one grain of either sperrylite (a platinum-bearing mineral that is often associated with rocks that contain platinum, palladium and nickel), gahnite (a primary indicator mineral for metamorphosed massive sulphide lead-zinc-silver-copper deposits), or chalcopyrite (a very common mineral in copper deposits).

In addition, about 350 of the 970 samples contained at least one gold grain with two samples containing over 100 gold grains.

In Toronto today Peregrine’s shares closed half a cent higher at 23.5 a share, on a trading volume of 219,800 shares.

The Canadian junior has a 52-week trading range of 16.5- $1.50 per share. With about 64.6 million shares outstanding, the company’s market capitalization is about C$16.2 million.