An updated preliminary economic assessment on the first phase of Peregrine Diamonds Ltd.'s Chidliak project in Nunavut, Canada, increased planned diamond production by 44% to 16.7 million carats.
The new study incorporates expanded resources at the CH-6 and CH-7 kimberlite pipes and defined an after-tax net present value of C$679 million, at a 7.5% discount rate, with a 31.1% internal rate of return.
The previous phase-one PEA was completed in mid-2016 and defined an after-tax net present value of C$471.2 million, using the same discount rate, with a 29.8% internal rate of return.
The company said May 23 that the 16.7 million carats will be produced over a 13-year period, with operating costs of C$101 per processed tonne and C$57 per recovered carat.
Initial CapEx is pegged at C$455 million, including C$95 million for an access road from Iqaluit and C$55 million in contingency, while sustaining and closure CapEx is estimated at C$71 million.
Peregrine expects the CH-6 open pit to be in production for nine years, followed by open pit mining at the CH-7 kimberlite. The company noted resources remain open at depth for both deposits.
"For a marginal increase in capital, we have materially increased the total carats in the resource and significantly enhanced the economic potential of this robust project," Peregrine President and CEO Tom Peregoodoff commented.
"Looking forward, we will continue to build the phase-two resource, which will include evaluating the remaining six pipes that may have economic potential and further sampling additional pipes in the cluster that could be economic."
