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Peregrine Diamonds PEA for Chidliak development estimates C$471.2M NPV

Peregrine DiamondsLtd.'s preliminary economic assessment study for developing the CH-6and CH-7 kimberlite pipes on the Chidliakdiamond project in Nunavut defined it as a "high margin, ten-year, open-pitmining project with very attractive economics."

The phase-one diamond development of the kimberlite pipes willinitially produce from an open pit at the CH-6 kimberlite pipe followed by productionfrom the CH-7 kimberlite pipe, the company said July 7.

The study estimates an after-tax net present value of C$471.2million, at a 7.5% discount rate, with an after-tax internal rate of return of 29.8%,and a 2-year payback period.

The total life-of-mine after-tax free cash flow is anticipatedto be C$887.4 million.

The life-of-mine average production is estimated to be 1.2 millioncarats per year, for a total of 11.6 million carats recovered.

Initial capital expenditure is expected to be C$434.9 million,with sustaining capital expenditure of C$48.7 million. The life-of-mine operatingexpenditure will total C$94.4 per tonne for a total of C$668 million.

In early-May, Peregrine estimated a maiden inferred mineral resource of 4.23 million carats ofdiamonds at the CH-7 kimberlite pipe, to a depth of 240 meters, increasing the totalCH-6 and CH-7 inferred mineral resource to 15.62 million carats contained in 9.63million tonnes of kimberlite.