Peregrine Diamonds buys land surrounding Chidliak

Peregrine Diamonds (PGD-T) is more than doubling its prospecting rights on Baffin Island, Canada’s newest diamond district.

The Vancouver-based junior has nailed down exploration permits for 13,000 sq. km of land adjoining Peregrine’s existing Chidliak project to the north, east, and south, about 60 km from Iqaluit, the capital of Nunavut.

Peregrine has already found three diamondiferous kimberlites at surface on its 9,800 sq. km Chidliak property and mining giant BHP Billiton (BHP-N, BLT-L, BHP-A) has elected to exercise its earn-in rights on the property.

Under the agreement BHP will spend $22.3 million on exploration at Chidliak to earn a 51% interest in the property. BHP then has the right to earn an additional 7% stake if it undertakes a bankable feasibility.

In addition to discovering three kimberlites it calls CH-1, CH-2, and CH-3, Peregrine has identified about 170 kimberlite-type geophysical anomalies over less than 15% of the Chidliak property.

In November 2008 Peregrine disclosed that a 2.28 tonne sample collected from the CH-1 kimberlite returned a diamond content of 1.56 carats per tonne for diamonds larger than a 0.85 milimetre sieve size and that a 2.01 carat gem-quality octahedral diamond was discovered in the sample.

Peregrine estimates CH-1’s surface expression stands at about six hectares.

This year Peregrine’s exploration program at Chidliak will involve drilling, sampling (mini-bulk and heavy mineral); ground geophysics, ground checking of anomalies, camp construction and environmental baseline studies.

Peregrine will drill high-priority kimberlite-type geophysical targets and conduct 500 metres of core drilling for each new kimberlite discovery, it says. CH-1 will be evaluated through core drilling. Trenching from the CH-1 kimberlite will yield about 50 tonnes for a mini-bulk sample, which will be processed to recover commercial-sized diamonds.

In addition, about 1,200 till samples will be collected and processed to extract kimberlite indicator minerals and the results will be used to prioritize exploration and drill targets for 2010.

Peregrine also plans to complete ground magnetic and or ground electromagnetic surveys on about 20 geophysical anomalies as well as collect baseline environmental and archeological data for later study. The company also plans to build a second camp for 25 people.

In total the exploration program this year will involve 50 people, two helicopters, a core drill and excavation equipment.

The 86 new prospecting permits Peregrine has acquired next to Chidliak are to be called the Qilak project. Peregrine believes the Qilak and Chidliak properties are underlain by the same ancient Archean bedrock.

This summer Peregrine plans to collect about 600 till samples at Qilak and analyze them for kimberlite indicator minerals.

Qilaq means “sky” in the south Baffin Island dialect of Inuktitut, the language spoken by the indigenous people of Nunavut in Canada’s Arctic.

At press-time Peregrine was trading at 55¢ per share. Over the last twelve months the company has traded in a range of 16.5¢-87¢ per share and has 70 million shares outstanding.