Post says Peregrine find sparks diamond optimism

2008-11-25 09:08 ET - In the News

The Financial Post reports in its Tuesday edition that Peregrine Diamonds has seen it share price fall as much as 88 per cent from a high of $1.38 on Nov. 26, 2007, to just 16.5 cents on July 23, 2008. The Post's David Pett writes Peregrine on Monday added nine cents to close at 42 cents. Investors are hopeful about drilling results at the Chidliak property on Baffin Island, Nunavut. Last week, Peregrine announced it had discovered a 2.01-carat diamond at the property.

On Monday, the mood got even better for investors, after mining giant BHP Billiton elected to exercise its earn-in rights for Chidliak, moving forward an exploration agreement between the two companies signed in 2005. Under terms of the agreement, BHP Billiton can earn a 51-per-cent share in Chidliak by financing five times the exploration expenditures that have been incurred by Peregrine, over five years, at a minimum $5-million per year.

John Kaiser, a small-cap resource expert and publisher of the Bottom Fish Online report, said Peregrine is holding up because it could be sitting on a diamond mine "home run." Said Mr. Kaiser, "I have never seen such early-stage data that gives such optimism" for a major new field.