De Beers says no to Chidliak diamond project

Peregrine Diamonds says DeBeers has decided it's not interested in theChidliak project near Iqaluit.

De Beerssigned an option agreement a year ago with Peregrine.If De Beers had decided on a joint venture, it would have invested nearly $60million in Chidliak over fiveyears and itwould have become the operator of Chidliak, with a majority interest in the project.

The Chidliak property is about 120 kilometresnortheast of Iqaluit.

Vancouver-based Peregrine Diamonds has been doing exploration work at the site for years. In late 2011, Peregrine bought back BHP Billiton's 51 per centshareof the Chidliak property, after that company announced it was reviewing its diamond business.

This summer, Peregrine collected more than 500 tonnes of bulk sample material.It's still being processed, with final results expected early next year.

Peregrine says it will have more information about De Beers' decision and the future of theChidliak project at a later date.