CHIDLIAK - Canada's Next Diamond Development March 2018 - Mining Data Solutions
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CHIDLIAK
Canada’s Next Diamond Development
March 2018 Investor Update
FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of Canadian securities legislation. All statements, other than statements of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future including, without limitation, statements relating to future management of the Company, proposed exploration and development programs, funding availability, anticipated exploration results, grade of diamonds and tonnage of material, resource estimates, anticipated diamond valuations and future exploration and operating plans are forward-looking statements. These forward-looking statements reflect the current expectations or beliefs of the Company based on information currently available to the Company. Forward-looking statements are made based upon certain assumptions by the Company and other important factors that, if untrue, could cause the actual results, performances or achievements of the Company to be materially different from future results, performances or achievements expressed or implied by such statements. Such statements and information are based on numerous assumptions regarding present and future business strategies and the environment in which the Company will operate in the future, including the availability and continuation of experienced leadership for the Company, the price of diamonds, anticipated costs and ability to achieve goals. Certain important factors that could cause actual results, performances or achievements to differ materially from those in the forward-looking statements include, but are not limited to: receipt of regulatory approvals; anticipated timelines for community consultations and the impact of those consultations on the regulatory approval process; market prices for rough diamonds and the potential impact on the Chidliak Project; and future exploration plans and objectives. Forward-looking statements are subject to a number of risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the forward-looking statements and, even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on, the Company. Factors that could cause actual results or events to differ materially from current expectations include, among other things, uncertainties relating to continuity and availability of executive management, availability and cost of funds, timing and content of work programs, results of exploration activities, interpretation of drilling results and other geological data, risks relating to variations in the diamond grade and kimberlite lithologies; variations in rates of recovery and breakage; variations in diamond valuations and future diamond prices; the state of world diamond markets, reliability of mineral property titles, changes to regulations affecting the Company's activities, delays in obtaining or failure to obtain required project approvals, operational and infrastructure risk and other risks involved in the diamond exploration and development business. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to their inherent uncertainty.
CORPORATE OVERVIEW
TSX-listed diamond exploration and
development company with operations
in Canada.
Capitalization:
• Issued: 442,151,936
• Current market capitalization: C$59.7M*
• Options outstanding: 33,253,500
• Warrants: 2,000,000 at $0.20
• Debt: N/A
• Estimated Working Capital: C$2.2M*
Drilling at CH-6
Major shareholders: August 2017
• Robert Friedland: ~25% Chidliak Office
July 2017
• Eric Friedland: ~18%
Principal asset:
• Chidliak Diamond
Development Project
Drilling at CH-6 – August 2017
* As of February 8, 2018
CHIDLIAK OVERVIEW
~ 120 km ENE of Iqaluit, the
capital of Nunavut
74 kimberlites discovered
2016 Phase One Inferred
Resource:
• Total: 15.62 Mcts
2016 Phase One Preliminary
Economic Assessment (PEA)
highlights include:
• After-tax NPV(7.5) of C$471 M
• After-tax IRR of 29.8%
• CapEx of C$435 M
• 10-year mine life
2018 Inferred Resource update:
• Total: 22.19 Mcts
Significant near-term resource
expansion potential in the
Southern Priority Area
The Chidliak 2016 PEA is preliminary in nature and includes Inferred Mineral resources that are considered too speculative geologically to have the economic considerations
applied to them that would enable them to be categorized as Mineral Reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
There is no certainty that the PEA will be realized.
WHAT MAKES CHIDLIAK SO SPECIAL?
Location:
• Canada is a stable investment environment.
• Community support for the project.
• Recent government announcement of
commitment to develop port facility at Iqaluit.
High margin:
• CH-6 has rock value of US$429/tonne at an
average grade
Chidliak Diamondsof 2.41from
recovered carat/tonne
CH-6 and a life-
of-mine average price of US$178/carat*
compared to 2016 global average diamond
value of US$96.50/carat**.
Fully controlled asset:
• 100%-owned.
• All diamond marketing and sales rights held.
• No encumbrances.
* LOM Average price from PEA by JDS Mining based 2016 independent diamond valuations provided by WWW International Diamond Consultants Ltd.
** Global average diamond price from KPC statistics for 2016.
2017 DEVELOPMENT PROGRAM
2017 Resource Development Program
• Successfully completed 5,288 metres
of core drilling at CH-6 in 15 holes.
• Delineated and sampled kimberlite
to 540 metres below surface, the depth
extent of drilling.
• CH-6 remains is open to depth.
• Updated resource estimate announced Peregrine employees and heavy-lift helicopter
February 15, 2018.
Solid kimberlite core at CH-6
Three core drills at CH-6
UPDATED CH-6 RESOURCE
2018 INFERRED RESOURCE OF 17.96 Mcts
• CH-6 updated Inferred Mineral Resource Depth (m)
0
of 17.96 Mcts in 7.46 Mt to 525 mbs.
• Inferred Mineral Resource tonnage increased KIM-L.NG
by 61% from 4.64 M to 7.46 Mt.
• CH-6 contained carats increased by 58% from
11.39 M to 17.96 M cts. KIM-C
CH-6 updated Inferred Mineral Resource of 17.96 million carats in 7.46 million tonnes to 525
• High-grade KIM-L domain grades 4.49 ct/t and KIM-L.HG
mbs; comprises 17% by volume of the updated CH-6
Inferred Mineral Resource tonnage increased by 61% from
resource.
2016
4.64 million to 7.46 million tonnes;
Resource -260
CH-6 contained
• Total Phase carats increased
One Diamond by 58% from 11.39 million
Development Base to 17.96 million carats;
High-grade KIM-L
resource now domain
exceeds with a grade
22 million of 4.49 carats per tonne (“cpt”) comprises 17% by
carats.
volume of the updated CH-6 resource; and
2018 INFERRED RESOURCE at CH-6 TFFE -380
Total Phase One Diamond Development resource now exceeds 22 million carats.
Grade Tonnes Grade Carats Rock value 1.09 – 2.35
Domain (millions) (ct/t) (millions) (US$/t)*
KIM-L.NG 5.18 2.07 10.73 368
million tonnes
KIM-L.HG 1.29 4.49 5.80 799 -500
KIM-C 0.99 1.45 1.43 258
CH-6 Total 7.46 2.41 17.96 429
* Using Life of Mine diamond price of US$ 178/ct from the 2016 PEA
-590
Inferred Mineral resources are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral
Reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
UPDATED CH-6 RESOURCE
BLOCK MODELS
Density Variation KIM-L.NG Grade Variation KIM-L.HG Grade Variation
Average Grade 2.07 cpt Average Grade 4.49 cpt
TFFE TFFE TFFE
Not Not Not
included included included
in the in the in the
block block block
model model model
Inferred Mineral resources are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral
Reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
CHIDLIAK CH-6 DIAMONDS
A COARSE SIZE FREQUENCY DISTRIBUTION
Diamond Size Frequency Distribution (SFD) CH-6 2013 bulk sample grade = 2.58 ct/t
These simple plots are used to compare and
contrast grade and diamond size distribution CH-6 KIM-L High Grade
against known benchmarks.
Tuzo Upper TKt
The vertical position of the curve is a 1.92 ct/t
function of grade.
The shallower the curve the coarser the
diamond population and the higher the
likelihood of finding large stones. CH-6 KIM-L
Bulk Sample
Size frequency distributions:
• typically vary between projects;
DO-27 SFD 0.94 ct/t
• typically vary between pipes
on one project; and
• can vary between grade domains
in one pipe.
As highlighted by CH-6, Chidliak SFD’s
4.49 ct/t KIM-L.HG domain verified in 2016
compare favourably (are coarser) than well
known benchmarks (Tuzo Tkt and DO-27). and 2017 based on microdiamond content.
CH-6 DIAMOND PARCEL
2013 BULK SAMPLE
227 carats, largest diamond
is 8.87 carats.
294 carats, largest diamond
is 3.54 carats.
+9 DTC CH-6 diamond parcel from the 404.24 t 2013 bulk sample prior to cleaning.2016 PEA OUTCOMES
COMPLETED ON 15.62 Mct RESOURCE
Pre-Tax NPV(7.5) / IRR C$ M / % 743 / 38.1
After Tax NPV(7.5) / IRR C$ M / % 471 / 29.8
Pay Back years 2
Mill Through Put tpd 2,000
Average Grade Recovered carat / tonne 1.67
Life of Mine years 10
Average Production M carats / year 1.2
Total Recovered Carats carats 11.6
LOM CH-6 Average Price US$ / carat 178*
LOM CH-7 Average Price US$ / carat 153
Initial CapEx C$ M 434.9**
LOM OpEx C$ / tonne 94.4
LOM OpEx C$ / carat 57.7
LOM Net Revenue C$ M 2462
Operating Margin % 72
The Chidliak 2016 PEA is preliminary in nature and includes Inferred Mineral resources that are considered too speculative geologically to have the economic considerations applied to them that
would enable them to be categorized as Mineral Reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. There is no certainty that the PEA will be
realized.
*Price updated to 2016 price as per WWW .
**Includes 15% contingency.HOW DOES CHIDLIAK COMPARE?
Operating Margin, Current Mines and Development Projects
90%
80% Chidliak Phase 1 – 72% * * Based on the 2016 15.62 Mct
Inferred Resource.
70%
60%
50%
40%
30%
20%
10%
0%
Namdeb (Marine)
Renard
Finsch
Karowe
Williamson
Snap Lake
Montepuez
Udachny
Jwaneng
Chidliak
Cullinan
Aikhal
Almazy Anabara
Venetia
Koffiefontein
Diavik
Liqhobong
Severalmaz
Nyurba
Letseng
Gahcho Kué
Namdeb (Land)
Orapa
Mirny
Kimberley
Kagem
Victor
Gaghoo
Nizhne-Lenskoye
Ekati
Macquarie Research, March 2016; Mountain Province Diamonds, Corporate Presentation, AGM 2016.HOW DOES CHIDLIAK COMPARE?
Chidliak* Jay1,2 Renard4 Gahcho Kue5 Back River6
Parameter Units
2016 PEA 2016 FS 2013 Opt 2014 FS 2015 FS
Post Tax IRR % 29.8 15.6 16.3 32.6 24.2
Post Tax NPV C$M 471(7.5) 510(7) 391(7) 1,005(10) 480
Pre-Production CapEx C$M 435 829 752 859 415
Payback years 2 NA 4.8 1.8 2.9
Operating Margin % 72 293 67 67 NA
CH-6 - 178
LOM Average Price US$ / ct 623 155 150 NA
CH-7 - 153
C$/t 114.58
OPEX 94.4 77 56.2 72.51
processed (OP/UG)
OPEX C$/carat 57.7 44 84.37 48 NA
OP - .44(.85)
LOM Average Head Grade carats/tonne 1.67(1.18) 1.8(1.0) 1.52(1.0) 6.3 g/t
UG - .75(.85)
Life of Mine years 10 13 14 12 12
LOM carats Mcarats 11.6 78.6 22.3 53.4 2.32Moz
* Based on the 2016 15.62 Mct Inferred Resource
1) Information retrieved from "Dominion Diamond Corporation, Jay Feasibility Study Results", July, 2016, all numbers on 100% basis.
2) All Jay results converted to C$ at an exchange rate of C$:US$ = 0.78.
3) Calculated by Peregrine Diamonds based on Dominion Diamonds data.
4) Information retrieved from Stornoway Diamond "Corporate Update, June 19, 2016“.
5) Information retrieved from Gahcho Kué Project, 2014 Feasibility Study Report, NI 43-101 Technical Report.
6) Information retrieved from Sabina Gold and Silver Corp "Back River Initial Project Feasibility Study Presentation“.
The Chidliak 2016 PEA is preliminary in nature and includes Inferred Mineral resources that are considered too speculative geologically to have the economic considerations
applied to them that would enable them to be categorized as Mineral Reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
There is no certainty that the PEA will be realized.CURRENT RESOURCE AT CH-7
Upside on Grade and Diamond Value: CH-7
Excessive breakage of +2 carat diamonds 0m
identified in 2015 drilled bulk sample.
Bulk sampling by surface trenching required to
update breakage-compromised 2015 grade
and diamond values. INFERRED
4.23 Mct
Higher grade and value profile expected. 4.99 Mt
LDD Diamond Breakage
Below:
Four of eight fragments of a
distinctive, yellow coated diamond.
The two largest fragments shown
here collectively weigh 3.31 cts. -240 m
CH-7 TFFE
2.26 cts OPEN TO 0.9Mt–2.36Mt
Above: DEPTH -320 m
Six fragments from five separate
0.96 cts broken octahedral diamonds from a
single processing unit. 3.38 carats
2.35 cts total weight recovered from
estimated 6.32 carat reconstructed
whole stones, representing an
estimated 47% weight loss.
Inferred Mineral Resources are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as
Mineral Reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. The potential quantity and grade of the TFFE estimates are
conceptual in nature as there has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the remainder of CH-6 or CH-7
being delineated as a Mineral Resource. Inferred Resource and TFFE estimates by Mineral Services Canada Inc. and re-stated in 2018 by Peregrine.CHIDLIAK CH-7 DIAMONDS
A COARSE SIZE FREQUENCY DISTRIBUTION
Despite diamond breakage, coarse SFDs evident at CH-7
CH-7 Centre and North
5.33 cts
CH-7 SouthCH-7 DIAMOND PARCEL
2015 BULK SAMPLES OF KIM-2 AND KIM-4
CH-7 KIM-4
78 carats, largest stone is
5.33 carats.
CH-7 KIM-2
171.51 carats, largest stone
is 4.21 carats.
All diamonds larger than ~ 0.11 ct (+9 DTC sieve) from their respective parcels.PHASE 2 RESOURCE OPPORTUNITIES
Phase One Resource is based
on only 2 of 74 kimberlites.
Significant near-term resource 2.01 ct
expansion potential in the
Southern Priority Area:
• 5 pipes of high interest are
in close proximity to CH-6,
CH-7 and planned 0.47 ct
infrastructure. Selected CH-1A diamonds
CH-44 has a stated TFFE
of 1.27 to 3.19 Mt and is ready
to bulk sample.
CH-1 has a coarse size
distribution:
• 2 carat gem quality diamond
recovered from a surface
mini-bulk sample in 2008.
Several other kimberlites have
economic potential.OTHER OPPORTUNITIES
CH-44 AND CH-1
CH-44 Looking East CH-1 Looking Northeast
TFFE
1.27 – 3.19 Mt
The potential quantity and grade of the TFFE estimates are conceptual in nature as there has been insufficient exploration to define a Mineral Resource and it is uncertain if
further exploration will result in CH-44 being delineated as a Mineral Resource. TFFE estimate for CH-44 by Geostrat Consultants Inc. and re-stated by Peregrine in 2018.CHIDLIAK CH-1 AND CH-44 DIAMONDS
MORE COARSE SIZE FREQUENCY DISTRIBUTIONS
CH-1 Micro and Macrodiamond Data CH-44 Microdiamond Data Only
CH-1 rest of pipe Bulk sampling
CH-44 required to define
Grade ~1 ct/t this all-important
part of the curve
CH-1 KIM-1A mini-
bulk grade = 0.40 ct/t*
CH-1 (KIM-1A, exposed) 49.6 t bulk sample in 2009 • CH-44 Not yet bulk sampled.
provides a 0.40 ct/t* curve with coarse SFD. Microdiamond • CH-44 microdiamond data (1,316 kg).
data for the rest of the CH-1 pipe provides a ~1.0 ct/t grade • CH-44 expected bulk sample grade ~ 1 ct/t.
estimate. Bulk sampling is required to verify this.
*0.40 ct/t: 19.78 carats of 1180+ diamonds in 49.6 dry tonnes from CH-1A outcrop mini-bulk sample. Grade calculation excludes 1.39 ct of 1180+ diamonds recovered in 2009
tailings audit.CHIDLIAK +0.85MM DIAMONDS
GOOD COLOUR PROFILES
CH-6 (n=853) CH-7 (n=514) CH-1 (n=192) CH-44 (n=53)
White/Colourless Off White Yellow Brown Grey
Chidliak kimberlites contain
dominantly white and off-white
commercially attractive diamonds.
CH-1 and CH-44 diamonds compare
favorably with those from CH-6 and
CH-7.
A selection of diamonds from mini-bulk samples of CH-1,
CH-6 and CH-7; the two largest stones are 2.18 and 2.01 ctsOTHER PROJECTS:
DO-27, LAC DE GRAS, NWT CANADA
DIAVIK
DO-27
DO-27 Indicated Mineral Resource: DO-27 Project Information:
18.2 Mct in 19.5 Mt. 27 km SE of Diavik™ Diamond Mine.
Grade = 0.94 ct/t. 56 km SE of Ekati™ Diamond Mine.
Base Model Average Price: $52/ct (Oct. 2007). Access via 11 km spur road from main ice
road to Yellowknife.
Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.SUMMARY
Chidliak Diamond Project:
• 22.19 Mct Inferred Resource contained
in CH-6 and CH-7.
• 2018 CH-6 Inferred Resource
represents a 58% increase in carats and
a 61% increase in tonnage over the
2016 CH-6 Inferred Resource.
• Positive PEA based on 2016 Resource
at CH-6 and CH-7 kimberlites (Phase
One Diamond Development Program).
• Significant near-term resource
expansion potential in the Southern
Priority Area (Phase Two).
• Coarse diamond size frequency
distribution and desirable diamonds.
The Chidliak 2016 PEA is preliminary in nature and includes Inferred Mineral resources that are considered too speculative geologically to have the economic considerations
applied to them that would enable them to be categorized as Mineral Reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
There is no certainty that the PEA will be realized.THE PEREGRINE TEAM Management Team Board of Directors Tom Peregoodoff President and CEO Eric Friedland Executive Chairman Dr. Herman Grütter Vice-President, Technical Services Robert Boyd Lead Director Dr. Jennifer Pell Chief Geologist Rick Cohen Director Alan O'Connor Project Manager Peter Meredith Director Cathy Fitzgerald Resource Geologist Dr. Alan Carter Director David Willis Manager, Community Affairs Dr. Myron Goldstein Director Greg Shenton CFO Chantal Gosselin Director
THANK YOU ᖁᔭᓐᓇᒦᒃ
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