CHIDLIAK Canada s Next Diamond Development March 2017 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 Botswana Capitalization Issued : 339,325,905 Current market capitalization : C$78M Options outstanding : 28,988,500 Warrants : NA Debt : NA Est. Working Capital: C$1.3M* Major shareholders Robert Friedland: 23% Eric Friedland: 18% Hercules Transport Aircraft at Chidliak March 2015 Chidliak Diamonds recovered from CH-6 * As of February 9 th, 2017, from Peregrine MD & A
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
Chidliak: Key investment highlights After Tax IRR 29.8% NPV C$471 million Payback 2 years Operating Margin 72% Chidliak Diamonds recovered from CH-6 One of the highest margin diamond development projects in Canada since the discovery of the Lac de 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.
Chidliak: Location
74 kimberlites discovered Chidliak: Overview 8 recognized to have economic potential Southern Priority Area hosts 7 of the kimberlites with economic potential PEA completed on two pipes, CH-6 and CH-7 PEA Phase 1 highlights: 11.6 M cts 7 Mt of plant feed 10 yr mine life 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.
What makes Chidliak so special? Location Canada 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$422/t at a recoverable Chidliak Diamonds grade recovered of 2.37 from CH-6 cpt and a LOM average price of US$178/ct* compared to global average diamond value of $109/ct** Fully controlled asset 100% owned. All diamond marketing and sales rights held. No encumbrances. * CH-6 rock value, LOM Average grade and price from PEA by JDS Mining based 2016 independent diamond valuations provided by WWW International Diamond Consultants Ltd and independent grade estimate by Mineral Services Canada Inc; ** Global average diamond price from KPC statistics for 2015.
Phase 1 Resource: CH-6 / CH-7 Elevation (MASL) 650 CH-6 CH-6 11.39 Mct in 4.64 Mt Inferred CH-7 4.23 Mct in 4.99 Mt Inferred CH-7 Elevation (MASL) 650 400 CH-6 TFFE 2.15Mt 3.49Mt LOM Average Price $178/ct in PEA Average Price $153/ct in PEA CH-7 TFFE 0.9Mt 2.36Mt 400 May 19, 2016 May 19, 2016 Inferred mineral resources are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. The potential quantity and grade of the TFFE estimates are conceptual in nature as there has been insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in the remainder of CH-6 or CH-7 being delineated as a mineral resource. Inferred Resource and TFFE tonnage estimates by Mineral Services Canada Inc.
CH-6 Diamond Parcel: 2013 Bulk Sample 227 carats, largest diamond is 8.87 carats 294 carats, largest diamond is 3.54 carats +9 DTC CH-6 diamond parcel from the 404.24 t 2013 bulk sample prior to cleaning
CH-7 Diamond Parcel: 2015 Bulk Samples of KIM-2 & KIM-4 CH-7 KIM-4 78 carats, largest stone is 5.33 carats CH-7 KIM-2 171.51 carats, largest stone is 4.21 carats All diamonds larger than ~ 0.11 ct (+9 DTC sieve) from their respective parcels
Preliminary Economic Assessment: Base Case Study Outcomes Pre-Tax NPV (7.5) / IRR C$ 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 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. 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? 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Operating Margin, Current Mines and Development Projects Chidliak Phase 1 72% 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 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.
Construction Access Iqaluit Vancouver Churchill Montreal
Site Access Trade-off Study: Benefits of an All Weather Road Road access corridor is key to project development Trade-off study completed to compare using a seasonal enhanced winter road (EWR) vs an all weather road (AWR) An all weather road is preferred as it mitigates against risks due to weather
Site Access Trade-off Study Outcomes: Benefits of an All Weather Road Peak Construction Year 1,460 cargo loads 6ML fuel Operating Year 300 cargo loads 17ML fuel (386 loads) 25% EWR Loss Additional $8M / $2M for mobilization of freight / fuel Mid-to-moderate risk of development schedule extension (<6 months) due to inability to mobilize large loads (beyond capacity of Hercules) Additional $2M / $5M for mobilization of freight / fuel Minor operational risk, due to the inability to mobilize large maintenance freight (somewhat sheltered by small size of operation) 50% EWR Loss Additional $16M / $4M for mobilization of freight / fuel Near certain development schedule extension (>6 months) due to inability to mobilize large loads (beyond capacity of Hercules) Additional $4M / $9M for mobilization of freight / fuel Moderate operational risk, due to the inability to mobilize large maintenance freight (somewhat sheltered by small size of operation) High potential to moderately reduce project revenues for one year. Blizzard, Winter 2013 100% EWR Loss Certain one year delay to project Approx. $50M cost impact (carrying cost), plus discount of entire NPV project by one year. Additional $7M / $17M for mobilization of freight/fuel Major operational risk, would require 3-4 Hercules flights every day to maintain operation. Extended weather events and the ability to secure aircraft now have significant impacts due to their criticality. Very high potential to shut down or significantly reduce revenues for one year.
Pre Production Capital Costs Capital Costs Pre-Prod (C$M) Pre-Stripping 3.2 Mining Equipment 28.4 Mining Infrastructure/Ancillary 21.0 Site & Road Development 107.3 Process Facilities 65.0 Utilities 25.9 Ancillary Facilities 27.2 Indirect Costs 51.7 EPCM 27.3 Owners Costs 21.1 Subtotal Capital Costs 378.2 Contingency 15% 56.7 Total Pre Production Capital 434.9 Indirect Costs 14% Ancillary Facilities 7% Utilities 7% Owners Costs 6% EPCM 7% Pre-Stripping 1% Process Facilities 17% Mining Equipment Mining 7% Infrastructure/ Ancillary 6% Comparables Pre-Prod (C$M) Renard 752 Jay 829 Gahcho Kué 859 Back River 415 Site Development and Roadworks 28% The Chidliak 2016 PEA is preliminary in nature and includes Inferred Mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves. There is no certainty that the PEA will be realized.
Operating Costs Operating Cost C$/t mined C$/t processed C$/carat LOM C$M Mining 4.22 34.74 21.24 245.8 Processing 2.08 17.16 10.49 121.4 Freight 1.79 14.74 9.01 104.3 Site Services 1.17 9.65 5.90 68.2 G&A 2.20 18.11 11.07 128.1 Total OPEX 11.46 94.39 57.72 667.7 Site Services 13% Freight 19% Mining 46% Comparables C$/t processed C$/carat Renard 56.20 84.37 Jay 77 44 Gahcho Kué 72.50 48 Back River 114.58 NA Processing 22% The Chidliak 2016 PEA is preliminary in nature and includes Inferred Mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves. There is no certainty that the PEA will be realized.
LOM Cash Flow / Carats Recovered Cash Flow (C$M) Carats (Millions) $1,000 $800 $600 $400 $200 $0 -$200 -$400 2.0 1.8 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 Annual Pre-Tax Cash Flow -4-3 -2-1 1 2 3 4 5 6 7 8 9 10 11 Pre-Tax Cash Flow Cumulative Pre-Tax Cash Flow Diamonds Recovered -4-3 -2-1 1 2 3 4 5 6 7 8 9 10 11 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 -$200 -$400 -$600 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 Cumulative Cash Flow (C$M) Cumulative Carats (Millions) Diamonds Recovered Cumulative Diamonds Recovered 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.
500 m Depth (m) 0-260 -380-500 May 19, 2016 Model Opportunities: Resource Expansion & Pit Optimization at CH-6 CH-6 Optimized Open Pit Current CH-6 TFFE 2.15Mt 3.49Mt UG Potential OPEN AT DEPTH Resource Expansion TFFE not included in resource statement Drill to convert TFFE to Inferred Deep drilling to expand inferred below current TFFE for potential underground operation Pit Optimization Whittle optimized 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 HGKIM-L 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 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. The CH-6 modeled underground potential and KIM-L high grade zone within the TFFE portion of the pipe are conceptual, potentially mineralized regions and are not currently classified as TFFE.
Opportunities: Resource Expansion & Pit Optimization at CH-7 Grade and Diamond Valuation Breakage in the 2015 bulk sample. Impacts both recovered grade and diamond valuation. Pit Optimization Whittle optimized shell leaves ~ 35% of carats. Pit angles conservative- overall 35 o to 48 o Units R and S conservative grade Assigned KIM-2 grade of 0.76 cpt. TFFE Additional tonnage present in TFFE CH-7 CH-7 TFFE 0.9Mt 2.36Mt Elevation (MASL) 650 400 May 19, 2016 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 estimates by Mineral Services Canada Inc.
How does Chidliak compare? Financial indicators Parameter Units Chidliak Jay 1,2 Renard 4 Gahcho Kue 5 Back River 6 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 29 3 67 67 NA LOM Average Price US$ / ct CH-6-178 CH-7-153 62 3 155 150 NA 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 LOM Average Head Grade carats/tonne 1.67 (1.18) 1.8 (.85) (1.0) 1.52 UG -.75 (1.0) 6.3 g/t (.85) Life of Mine years 10 13 14 12 12 LOM carats Mcarats 11.6 78.6 22.3 53.4 2.32Moz 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$:US$ =.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. There is no certainty that the PEA will be realized.
Opportunities: Resource expansion - Brownfields 8 of the 74 kimberlites discovered to date are recognized to have economic potential 7 of these kimberlites are in close proximity to CH- 6 and CH-7 (easily accessible to planned development CH-1 & CH-44 are the most advanced but require more work Other kimberlites also warrant further evaluation
Opportunities: Resource expansion CH-44 and beyond CH-44 Looking East TFFE 1 Mt - 2 Mt @ ~ 1 cpt CH-1 Looking Northeast June 13, 2016 June 13, 2016 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 estimates by Ms. Darrell Farrow, of Geostrat Consultants Inc.
Chidliak 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 2.01 ct Selected CH-1A diamonds 0.47 ct
Chidliak CH-6: A Coarse Diamond SFD Public domain micro- & macrodiamond SFD data for projects with bulk samples CH-6 2013 bulk sample grade = 2.58 ct/t Tuzo Upper TKt SFD 1.92 ct/t DO-27 SFD 0.94 ct/t Two benchmark curves defined Diamond SFD s typically vary between projects typically vary between pipes on one project can vary between grade domains in one pipe CH-6 has proportionally more coarse diamonds than 1.92 ct/t Tuzo Upper TKt and 0.94 ct/t DO-27 benchmarks Implication: + 1 carat diamonds are more prevalent than in either of the benchmarks
Chidliak CH-7: A Coarse Diamond SFD CH-7 2015 Centre & North grade = 1.06 ct/t* CH-7 2015 South grade = 0.76 ct/t** CH-7 Centre and North has proportionally more coarse diamonds than 1.92 ct/t Tuzo Upper TKt and 0.94 ct/t DO-27 benchmarks Peregrine expects to recover more 2.0 ct & 5.2 ct diamonds from 0.76 ct/t CH-7 KIM-2 than occur in benchmark DO-27 & Tuzo TKt, even though the latter have 1.2 to 2.5 times higher grade * 1.06 ct/t: 401.3 carats of 1180+ diamonds in 380.1 dry tonnes from CH-7 KIM-1, -3, -4 & -5 * *0.76 ct/t: 363.7 carats of 1180+ diamonds in 476.5 dry tonnes from CH-7 KIM-2 domain
Chidliak CH-1 and CH-44: More Coarse SFDs CH-1 Micro and Macrodiamond Data CH-1 rest of pipe Grade =???? CH-44 Microdiamond Data Only Bulk sampling required to define this all-important part of the curve CH-1 KIM-1A minibulk grade = 0.40 ct/t* CH-1 (KIM-1A, exposed) bulk sampled in 2009 Microdiamond data only exists for the rest of the pipe, and it has a higher diamond content than KIM-1A; more work required to define grade and SFD CH-44 Not bulk sampled (yet) CH-44 microdiamond data (1,316 kg) CH-44 expected bulk sample grade? 1 ct/t?? How coarse is the CH-44 SFD? *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.
What does the future look like? 2015 2016 2017 2018 2019 2020 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 Infrastructure and Environmental Base Line 2015 RDP / Bulk Sampling Inferred Resource Statement Preliminary Economic Assessment CP1D Pre-feasibility / Feasibility CP1D Permitting CP1D Construction CP1D
Other Projects: DO-27, Lac de Gras, NWT Canada DIAVIK DO-27 DO-27 Indicated Mineral Resource: 18.2 Mct in 19.5 Mt Grade = 0.94 ct/t Base Model Average Price: $52/ct (Oct. 2007) DO-27 Project Information: 27 km SE of Diavik TM Diamond Mine 56 km SE of Ekati Diamond Mine Access via 11 km spur road from main ice road to Yellowknife
Other Projects: Botswana Botswana is the worlds' premier diamond production, sales and trading hub Peregrine is leveraging 60 years of diamond exploration history Deeply experienced Peregrine technical team 100% ownership of eleven licenses covering 6,613 square kilometres across six projects 6 high potential geophysical targets (2 with KIM support) on the Gope Block; drill testing planned
Summary Coarse SFD and desirable diamonds in all mini-bulk and bulk samples taken to date at Chidliak Positive PEA based on two of eight potentially economic kimberlites at Chidliak (Phase 1) Current focus on underground resource potential at CH-6 Clear understanding of resource development opportunities and remaining exploration upside at Chidliak (Phase-2) Other projects in the pipeline 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.