Peregrine Diamonds needs a $95M all-weather road

A diamond company working on Baffin Island says it could spend10 years extracting roughly $2.5 billion in net revenue but first it needs to build a$95 million all-weather road to Iqaluit.

Peregrine Diamonds president and chief executive officer Tom Peregoodoff held a conference call with stakeholders Tuesday to talk about thetwo kimberlite pipes that make up phase one of the Chidliak diamond project, 120 km northeast of Iqaluit. Peregrine has been exploring atChidliak since 2005.

But to get the project up and running, the company needs to build a 160 km all-season road from Iqaluit to the site.

"The road in is a critical piece of infrastructure and we need that prior to commencement of construction to minimize our construction capital costs," said Peregoodoff.

Winter road won't cut it

Other diamond mines in the north, like Ekati and Diavik, are supported by winter roads from Yellowknife to the site, says Peregoodoff.

But those roads are mostly built on ice and operate eight to10 weeks out of the year.

An extended winter road from Iqaluit to Chidliak would go over more rugged terrain and many parts would have to be an all-weather road anyway, says Peregoodoff.

Plus, a winter road to Chidliak would only last six to eight weeks. And blizzards could narrow that already short window by three to five days with every storm.

"That obviously would have an impact on the amount of equipment you need to position in Iqaluit so that you can get all the loads of fuel and other consumables on site," said Peregoodoff.

If a winter road was used, he says the site would have to be supported by large transport aircraft, like Hercules, usingan airstrip built at the site.

Peregoodoff says there is an opportunity to access federal infrastructure funding to help build the $95 million dollar road.

He says the company is on track to have phase one of the mine operating in 2020.