VANCOUVER, BRITISH COLUMBIA--(Marketwired - July 26, 2017) - Peregrine Diamonds Ltd. (TSX:PGD) ("Peregrine" or "the Company") is pleased to announce the completion of hole CHI-050-17-DD33 ("DD33"), a 433-metre long drill hole at its 100%-owned Chidliak Diamond Project ("Chidliak") near Iqaluit, Nunavut, Canada. Hole DD33 contains a 152-metre long continuous intercept of typical CH-6 kimberlite, significantly more than the 100-metre intercept predicted by the current CH-6 resource model. The drill result expands the western margin of the CH-6 pipe by approximately 35 metres at a depth of 200 metres below surface ("mbs") and confirms the eastern pipe contact as near-vertical to 330 mbs, as predicted by the current CH-6 resource model. DD33 continued in country rock and encountered a 0.32-metre open-ended intersection of olivine-macrocrystic kimberlite at 361 mbs where the hole was lost. Another drill hole is planned to test this kimberlite at depth from the eastern side of CH-6.
The Company has signed a contract with Vital Drilling Services for the supply of an additional diamond drill rig for the current program. The drill rig is expected at Chidliak on August 1st and will provide 2,000 to 4,000 metres of drill capacity to support completion of resource expansion objectives within the 2017 drilling season
Tom Peregoodoff, Peregrine's President and Chief Executive Officer, commented: "We are extremely pleased with this first drill result that shows that the pipe is expanding with depth. The addition of the third rig will assist in delineating the high grade CH-6 pipe to depths of 500 metres below surface and to allow for a restated resource estimate to be developed and announced later in the year."
COMPLETION OF HOLE DD33
As reported on June 19, 2017, the 2017 drilling program at Chidliak aims to further delineate the CH-6 kimberlite, with the objective of expanding the high grade CH-6 resource to a depth of 500 metres below surface. Core hole DD33 (090 azimuth, -60 inclination) was designed to cross west-east through the centre of the Target for Further Exploration ("TFFE") and to provide a 100-metre long kimberlite intercept based on the current model for the CH-6 pipe shell. Drilling of DD33 commenced on July 9, 2017 and was completed on July 24, 2017, providing a 152.1 metre intersection of continuous, typical olivine-rich CH-6 kimberlite from 200 to 330 mbs. The kimberlite contact expands the west-east diameter of the CH-6 pipe at 200 mbs from 55 to 90 metres by displacing the western margin of the pipe some 35 metres to the west. It also confirms the eastern margin of CH-6 is near-vertical and occurs within 4 metres of that projected by the Company at 330 mbs. The westward expansion of CH-6 is targeted for confirmation at depth by drill-testing in the 380 to 500 mbs range with drill holes in the planned 2017 program.
Hole DD33 was lost at 433 metre down hole length, at 360.6 mbs and terminated in kimberlite. A 32-centimetre intersection of slightly altered olivine-macrocrystic kimberlite was logged at the end of the last core barrel retrieved. The nature and relationship with CH-6, if any, of this deeper kimberlite intersection is unknown at this time. Future deep drilling from the eastern side of CH-6 will attempt to establish the nature, extent and continuity of this deeper kimberlite intersection.
Tom Peregoodoff, Peregrine's President and Chief Executive Officer, further commented: "This expansion in tonnage potential has significant implications for the total contained carats within CH-6 and could significantly influence future planned engineering and development studies. While the significance of the kimberlite intersection at depth is unknown, both results from this single hole show that the potential of the Chidliak property is far from exhausted."
A cross section of the DD33 drill trace is shown in Figure 1 below.
Figure #1 - Drill Trace - Diamond Drill Hole CHI-050-17-DD33
In addition to DD33, three other core holes have been initiated since drilling started on July 7, 2017. Two holes have been abandoned prior to completion due to adverse drilling conditions. At the third hole, the casing has now been set and drilling is set to resume on July 26, 2017.
$10.28 MILLION RIGHTS OFFERING
As announced on July 10, 2017, Shareholders of record on July 17, 2017 have received one right (a "Right") for each common share held. Three and three-tenths (3.3) Rights entitles the holder to purchase one common share of the Company ("Common Shares") at a price of $0.10 per Common Share. Shareholders are reminded that the exercise of the Rights and purchase of the Common Shares must be completed by 2:00 p.m. (Vancouver time) on August 15, 2017 (the "Expiry Date").
Shareholders who fully exercise their Rights are entitled to subscribe pro rata for additional Common Shares, if available, that were not subscribed for initially on or before the Expiry Date. A fully subscribed Offering will raise gross proceeds of $10.28 million, of which $10 million is backstopped by way of a standby purchase agreement. The proceeds of the Offering will be used to complete the remainder of the 2017 Chidliak Diamond Resource Expansion Program and for general corporate purposes and working capital.
This news release does not constitute an offer to sell, or the solicitation of an offer to buy securities in any jurisdiction in which such offer or solicitation would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
The Rights and the Common Shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act"), or the securities laws of any state of the United States, and may not be offered or sold in the United States or to, or for the account or benefit of, any U.S. Person (as defined in Regulation S of the Securities Act) or a person in the United States, unless an exemption from such registration requirements is available.
QUALIFIED PERSONS
Dr. Herman Grütter, Peregrine's Vice President, Technical Services, is a Qualified Person and is responsible for the design of the Diamond Resource Expansion Program at Chidliak. Mr. Alan O'Connor, Peregrine's Program Manager, Chidliak Resource Evaluation, is a Qualified Person and is responsible for the design and conduct of field programs at Chidliak. Dr. Jennifer Pell, Peregrine's Chief Geologist, is a Qualified Person and is responsible for geological characterization and microdiamond sampling of core drilled at Chidliak.
Dr. Grütter, Mr. O'Connor and Dr. Pell have reviewed this release and approve of its contents.
