CHIDLIAK Canada s Next Diamond Development June 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$58M Options outstanding : 28,873,500 Warrants : NA Debt : NA Est. Working Capital: C$605,000* Major shareholders Robert Friedland: 25.3% Eric Friedland: 17.6% Hercules Transport Aircraft at Chidliak March 2015 Chidliak Diamonds recovered from CH-6 * As of May 11 th, 2017, from Peregrine MD & A
Chidliak: Key investment highlights POSITIVE PEA OUTCOMES: 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: Overview HIGHLIGHTS: ~ 120 km ENE of Iqaluit, capital of Nunavut 74 kimberlites discovered 8 recognized to have economic potential; 7 are within an area with an 8 km radius which is very beneficial for mining costs 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 JDS concept-level study clearly demonstrates an economic benefit for proving up the resource potential at the CH-6 kimberlite pipe below a depth of 260 metres and proceeding with a combined open pit plus underground mining operation 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 $109/ct** Fully controlled asset 100% owned. All diamond marketing and sales rights held. No encumbrances. * CH-6 rock value, LOM Average grade and price from PEA by JDS Mining based 2016 independent diamond valuations provided by WWW International Diamond Consultants Ltd and independent grade estimate by Mineral Services Canada Inc; ** Global average diamond price from KPC statistics for 2015.
Phase 1 Resource: CH-6 & CH-7 CH-6 0 m CH-7 0 m INFERRED 11.39 Mct 4.64 Mt INFERRED 4.23 Mct 4.99 Mt -240 m OPEN TO DEPTH CH-6 TFFE 2.15Mt 3.49Mt -260 m OPEN TO DEPTH CH-7 TFFE 0.9Mt 2.36Mt -320 m -380 m Inferred mineral resources are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. The potential quantity and grade of the TFFE estimates are conceptual in nature as there has been insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in the remainder of CH-6 or CH-7 being delineated as a mineral resource. Inferred Resource and TFFE tonnage estimates by Mineral Services Canada Inc.
CH-6 Diamond Parcel: 2013 Bulk Sample 227 carats, largest diamond is 8.87 carats 294 carats, largest diamond is 3.54 carats +9 DTC CH-6 diamond parcel from the 404.24 t 2013 bulk sample prior to cleaning
CH-7 Diamond Parcel: 2015 Bulk Samples of KIM-2 & KIM-4 CH-7 KIM-4 78 carats, largest stone is 5.33 carats CH-7 KIM-2 171.51 carats, largest stone is 4.21 carats All diamonds larger than ~ 0.11 ct (+9 DTC sieve) from their respective parcels
Preliminary Economic Assessment: Base Case Study Outcomes Pre-Tax NPV (7.5) / IRR C$ 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.
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.
2017 Program The 2017 work program at Chidliak will focus on three main objectives: Expansion of the current Inferred Resource at CH-6 Approximately 7,500 metres of diamond core drilling to further demonstrate geological continuity, establish pipe margin pierce-points and obtain spatially representative kimberlite samples for caustic fusion diamond analysis will be completed to increase the depth of a categorized resource from 260 metres to 500 metres Chidliak Diamonds recovered from CH-6 Refine open-pit geotechnical design parameters Approximately 1000 metres of oriented HQ-diameter core and other geotechnical data required to refine the openpit parameters, particularly the pit slope angles Advancing permitting Continue environmental baseline studies of the Chidliak project area and the proposed transportation corridor 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 being delineated as a mineral resource.
2017 Program: Resource Expansion at CH-6 0 m 7,500 m of Drilling in 2017 INFERRED 11.39 Mct 4.64 Mt -260 m Base of Inferred Resource Prove up underground potential by extending existing 4.64 Mt resource from 260 to 500m depth Intensify microdiamond sampling to 500m depth and prove grade continuity Refine geotechnical parameters to steepen open pit angles UNDERGROUND POTENTIAL -380 m Base of TFFE -500 m 2017 Drill Holes 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 below 380 metres depth is a conceptual, potentially mineralized region and is not currently classified as TFFE.
2017 Program: Environmental Monitoring Continued Environmental Baseline Studies Within Project area Along proposed transportation corridor Iqaluit
What does the future at Chidliak look like? 2017 2018 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
Other Opportunities: Resource Upgrade at CH-7 Overall Grade and Diamond Value Trench bulk sample to address diamond breakage in the 2015 drilled bulk sample CH-7 0 m 10 to 40% higher recovered grade expected Higher value profile is expected for unbroken +2 carat diamonds Grade of Units R and S INFERRED 4.23 Mct 4.99 Mt Assigned conservative KIM-2 grade of 0.76 cpt Prove higher grade through additional sampling Pit Optimization Current Whittle pit leaves ~ 35% of resource not extracted Optimize new Whittle pit after resource upgrades OPEN TO DEPTH CH-7 TFFE 0.9Mt 2.36Mt -240 m -320 m Pit angles conservative - overall 35 o to 48 o 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.
Other Opportunities: Brownfields 8 of the 74 kimberlites discovered are recognized to have economic potential 5 the 8 are within close proximity to CH-6 & CH-7 and to planned infrastructure CH-1 & CH-44 are the most advanced but require more work Other kimberlites also warrant further evaluation
Other Opportunities: CH-44 and CH-1 CH-44 Looking East CH-1 Looking Northeast TFFE 1 Mt - 2 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 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 Size Frequency Distribution Diamond Size Frequency Distribution (SFD) These simple plots are used to compare and contrast grade and diamond size distribution against known benchmarks. The vertical position of the curve is a function of grade CH-6 2013 bulk sample grade = 2.58 ct/t Tuzo Upper TKt SFD 1.92 ct/t CH-6 The shallower the curve the coarser the diamond population and the higher the likelihood of finding large stones Size frequency distributions DO-27 SFD 0.94 ct/t typically vary between projects typically vary between pipes on one project can vary between grade domains in one pipe Chidliak SFD s compare favourably (are coarser) than well known benchmarks (Tuzo Tkt and DO-27). 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 in CH-6 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 & North CH-7 South 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-44 Microdiamond Data Only CH-1 rest of pipe Grade ~1 ct/t CH-44 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) 49.6 t bulk sample in 2009 provides a 0.40 ct/t curve with coarse SFD. Microdiamond data for the rest of the CH-1 pipe provides a ~1.0 ct/t grade estimate. Bulk sampling is required to verify this. CH-44 Not bulk sampled (yet) CH-44 microdiamond data (1,316 kg) CH-44 expected bulk sample grade ~ 1 ct/t *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.
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
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.
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
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