Risk Reward Part IV

Oct 28th.

A rally incurred in the stock of Peregrine Diamonds (owner of Chidliak) a week or two ago that drove the market cap up to CAD$70 million before Anonymous started selling more stock to have the rally break and retreat.

There was also an update on Botswana...but no real results yet.

The stock is now trading at 17 Canadian pennies for a market cap of CAD$48 million
or $US36 million.

There is a significant amount of news in the pipeline.
The most significant being the CH-7 bulk sample from the 4 domains (2,3,4,5)

Macro Results to date:
Domain 1 -  1.04 cpt (representing a small portion of the body) from a 50 carat sample
(including a 6.53 carat stone - second largest stone at Chidliak)

Expectations:
Domain 2*- 0.5 to 1.0 cpt
Domain 3 - 1+ cpt
Domain 4* - 1 to 2 cpt
Domain 5 - 3 to 4 cpt

* Both Domain 2 and 4 represent significant tonnage at lower depths.

If multiple larger stones (>5 carat) are found, this will not only increase the grade, but also have profound influence in the valuation model.

There is also a chance that a mantle nodule is intersected. These are known to contain high amounts of diamonds in a very small area. CH-7 is confirmed to have mantle nodules throughout. Whether they contain a significant amount of diamonds or not is to be determined.

A kimberlite deposit (eg. Renard in Quebec) could go down and still be accessible up to 1 km's in depth.

At Chidliak, the focus has been on the top 1/4 of that (250 metres to surface) and strictly focused on open pit.

The insitu value of this top 25% is in the billions of $$'s for both CH-6 and CH-7.
Including material that still needs some deep drilling to confirm could be in the order of $10+ billion and could hit the target of 50 million carats.

These are just 2 pipes out of 71 confirmed kimberlite finds on the property and hundreds of undrilled anomalies.

This is an image of a 2.01 very high quality diamond from CH-1:

Here is another one, a 1.15 carat from CH-31:

So, it is by no means just CH-6 and CH-7 as the ultimate goal.

When you have billions of dollars in value in CH-6 and CH-7 and all these other opportunities, one must question the US$36 million value for this entire project.

The rewards here are phenomenal and the downside risk is minimal.