Advancing Canada s Next Diamond Development. Annual General Meeting

Transcription

1 Advancing Canada s Next Diamond Development Annual General Meeting March 30, 2017

2 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 the PEA and its realization, estimates of Chidliak Phase One Diamond Project economics, proposed exploration and development programs, funding availability, anticipated exploration results, grade of diamonds and tonnage of material, resource estimates, diamond valuation estimates 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 assumptions regarding the economics of the PEA, 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; availability of funding; 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 the Company s ability to achieve the PEA, 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; estimates of grade and quality of diamonds, 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 forwardlooking 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. 2

3 Corporate Overview Canadian Diamond Sector Chidliak Preliminary Economic Assessment CH-6 Resource Expansion Botswana Gope Diti Sikwane Future CH-7 diamond parcel KIM ct US$16,555 US$3106/ct 3

4 Corporate Overview TSX listed diamond exploration and development company with operations in: Canada Botswana Capitalization Issued : 339,325,905 Market Cap: C$65M Options : 25,238,500 Warrants : NA Debt : NA Est Working Capital : C$1.3M* Major shareholders Robert Friedland ~25% Eric Friedland ~21% 5.83 ct US$20,143 US$3,455/ct Chidliak Diamonds recovered from CH-6 Chidliak Diamonds recovered from CH ct US$36,158 US$4,076/ct 4.62 ct US$13,569 US$2,591/ct 4.11 ct US$10,650 US$2,591/ct *As of February 9, 2017 From Peregrine MD and A 4

5 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 5

6 Challenging year for the sector Peregrine Diamonds Ltd. (TSE:PGD) Mountain Province Diamonds Inc (TSE:MPVD) Kennady Diamonds Inc (CVE:KDI) The sector was broadly flat in Demonetization in India had a impact on diamond prices. Two new mines failed to meet expectations. Added further concern in the capital markets. Strong indications that we are at the bottom of the cycle. Does the recent news regarding DDC indicate a broader sector consolidation? Chidliak Diamonds recovered from CH-6 Stornoway Diamond Corporation (TSE:SWY) Dominion Diamond Corp (NYSE:DDC) North Arrow Minerals Inc. (CVE:NAR) 6

7 Peregrine s Response Focus on cost reduction. Leveraging of Global Mining Management has resulted in significant cost savings. Primarily through sharing of employee costs. Activity post PEA has focused on securing support to advance Chidliak. Potential partners faced challenges, especially later in the year and this had an impact on our commercial discussions. Management s position has been consistent. We will only do a deal if it creates shareholder value and recognises the unique value of the Chidliak Project. As part of 2017 planning, we undertook a detailed review of the resource expansion opportunities. Understand the potential value of CH-6 resource expansions with depth. Led to an internal Concept Level Study of a combined Open Pit and Under Ground operation at CH-6. Led to the strategic decision to focus on resource expansion in preference to resource conversion. The work program to move forward into pre-feasibility will depend on the final resource. 7

8 Chidliak overview Located on Baffin Island, Nunavut, Canada ~ 120 km ENE of Iqaluit, capital of Nunavut. Focus is the Southern Priority Area 7 of 8 pipes with economic potential lie within this small 8 km radius which is very beneficial for mining costs. Two of these pipes comprise the Phase-1 mine. Southern Priority Area has seven kimberlites with economic potential, including CH-6 8

9 Chidliak Phase 1 Development PEA highlights After Tax IRR 29.8% NPV C$471 M Payback 2 years Operating Margin 72% Pre-Prod Capex C$435 M Chidliak Diamonds recovered from CH-6 One of the highest margin diamond development projects in Canada since the discovery of the Lac des Gras district. Significant resource expansion potential. 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. There is no certainty that the PEA will be realized. 9

10 Chidliak diamonds are high value 5.83 ct US$20,143 US$3,455/ct 4.62 ct US$13,569 US$2,591/ct 8.87 ct US$36,158 US$4,076/ct 4.11 ct US$10,650 US$2,591/ct Chidliak Diamonds recovered from CH-6 10

11 CH-6 diamond parcel 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 t 2013 bulk sample prior to cleaning 11

12 CH-7 diamond parcel KIM-2 12

13 Phase 1 Resource: CH-6 + CH-7 Elevation (MASL) CH-6 CH-7 Elevation (MASL) Mct in 4.64 Mt Inferred LOM Average Price $178/ct in PEA 4.23 Mct in 4.99 Mt Inferred LOM Average Price $153/ct in PEA CH-7 TFFE 0.9Mt 2.36Mt May 19, 2016 CH-6 TFFE 2.15Mt 3.49Mt OPEN AT DEPTH May 19, 2016 OPEN AT DEPTH 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. 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 tonnage estimates by Mineral Services Canada Inc. 13

14 Preliminary Economic Assessment Base case study outcomes 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 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. There is no certainty that the PEA will be realized. 14

15 Jwaneng Gahcho Kué Orapa Chidliak Venetia Montepuez Namdeb (Marine) Renard Mirny Finsch Koffiefontein Cullinan Liqhobong Karowe Nizhne-Lenskoye Kimberley Victor Severalmaz Nyurba Aikhal Letseng Almazy Anabara Kagem Diavik Williamson Namdeb (Land) Ekati Udachny Snap Lake Gaghoo How does Chidliak compare? Operating Margin, current mines and developments 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Chidliak Phase 1 72% Macquarie Research, March 2016 Mountain Province Diamonds, Corporate Presentation, AGM 2016 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. There is no certainty that the PEA will be realized. 15

16 Resource Expansion At CH-6 0 m INFERRED Mct 4.64 Mt 260 m TFFE 2.15Mt 3.49Mt 380 m 500 m KIM-L Normal Grade KIM-L High Grade Base of Inferred Resource Base of TFFE Drill Target Depth 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. The potential quantity and grade of TFFE are conceptual in nature, as there has been insufficient exploration to define a resource and it is uncertain if further exploration will result in a resource being defined. The modeled underground potential and KIM-L high grade zone within TFFE are conceptual, potentially mineralized regions and are not currently classified as TFFE. TFFE Conceptual Resource Expansion Current resource extends to 260 meters. TFFE not included in resource statement JDS Concept Study Block model extended to 500 meters. Concept study completed to quantify the potential value uplift on a CH-6 open pit PLUS underground mining plan Results are excellent Pit Optimization PEA Whittle optimized pit shell leaves ~ 13% of carats Pit angles conservative- overall 35 o to 48 o Current pit design minimizes waste at expense of maximizing early production from high grade KIM-L 16

17 CH-6 Development 2017 Program Proposal 0 m Looking East Looking Northwest Proposed Drill Hole Purpose INFERRED Mct 4.64 Mt Geotechnical Geology Directional Drilling 260 m TFFE 2.15Mt 3.49Mt 380 m Base of Inferred Resource Base of TFFE 500 m Drill Target Depth KIM-L Normal Grade KIM-L High Grade TFFE Conceptual 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. The potential quantity and grade of TFFE are conceptual in nature, as there has been insufficient exploration to define a resource and it is uncertain if further exploration will result in a resource being defined. The modeled underground potential and KIM-L high grade zone within TFFE are conceptual, potentially mineralized regions and are not currently classified as TFFE. 17

18 Botswana Drill tested Sikwane kimberlites. Results confirm original thin dyke interpretation. KIM sampling completed at Nata, Gope, Malolwane, Sikwane-West Integration of sampling results with airborne geophysics ongoing. 18

19 Botswana Gope / Diti Gope Diti Summary 1000 square kilometres inside CKGR Many untested De Beers targets in high resolution airborne magnetic survey 67 to 77 m of known Kalahari cover 20 targets selected and 10 targets prioritized for KIM sampling at end sampling results are being integrated into magnetic data 19

20 Botswana - Sikwane Sikwane Summary Drilling: m in 10 holes intersected 4 Sikwane kimberlites. Irregular sill-like kimberlites & stringers in fractured granite Drilling: 90 m in two targets are dolerite under 21 m sand cover ( ) Sikwane-West: 14 prioritized geophysical targets sampled ( ). Integration of KIM results with magnetics and ground geophysics over KIM positive targets. 20

21 What does the future at Chidliak look like? Jun Jul Aug Sep Oct Nov Dec Jan Feb Resource Expansion Drilling Micro-diamond Analysis Updated Resource Statement CH-6 OP/UG PEA Pre-Feasibility 21

22 Thank you and any questions? After Tax IRR 29.8% NPV C$471 M Payback 2 years Operating Margin 72% Pre-Prod Capex C$435 M Chidliak Diamonds recovered from CH-6 One of the highest margin diamond development projects in Canada since the discovery of the Lac des Gras district. Significant resource expansion potential. Experienced board and management team with strong shareholder support. 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. There is no certainty that the PEA will be realized. 22