VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 5, 2012) - Peregrine Diamonds Ltd. ("Peregrine" or "the Company") (News - Market indicators) is pleased to announce that it has completed an option and subscription agreement ("the Option") with De Beers Canada Inc. ("De Beers") whereby De Beers has the exclusive right, until December 31, 2013, to enter into an earn-in and joint venture agreement ("the Joint Venture") with Peregrine on a 50.1% De Beers / 49.9% Peregrine ownership basis for the Chidliak Diamond project ("Chidliak" or "the Project") located on Baffin Island, Nunavut, Canada. Under the Joint Venture, De Beers will be the project operator and will undertake mineral exploration and development work potentially leading to the completion of a National Instrument ("NI") 43-101 compliant, Bankable Feasibility Study ("BFS") and, if warranted, the construction of a Diamond mine.

As consideration for the Option, De Beers will complete a $2.5 million private placement unit offering in Peregrine priced at $0.75 per unit. Each unit consists of one common share and one-half share purchase warrant with each whole warrant entitling De Beers to buy a common share in Peregine for $2.00 per share for a period of 24 months.

In addition, De Beers will make the January 31, 2013, $2.5 million payment due to BHP Billiton Canada Inc. ("BHP Billiton") that is required under Peregrine's agreement to purchase BHP Billiton's 51% interest in Chidliak as first announced on December 20, 2011. Both the private placement and this payment will be credited towards De Beers' earn-in requirements described below.

Should De Beers decide to exercise the Option, Peregrine and De Beers have agreed on the material terms of the Joint Venture which will include the following:

• De Beers is required to invest $58.5 million into Chidliak to earn a 50.1% interest in the Project, with a minimum work commitment of $37 million.
• De Beers is to finance all work at Chidliak from when they enter into the Joint Venture until the completion of the BFS, inclusive of appropriate environmental impact studies necessary for evaluating the feasibility of commercial Diamond production. De Beers will use commercially reasonable efforts to deliver the BFS in a timely manner, subject to force majeure provisions.
• Peregrine is to reimburse De Beers 49.9% of all Chidliak costs in excess of $58.5 million, the point at which De Beers has earned its 50.1% interest, to completion of the BFS. Reimbursement will consist of an aggregate of $25 million payable in four escalating staged payments at certain milestones beginning with the approval by the participants of the completed BFS and ending with the completion of mine construction, with the balance payable from 66% of Peregrine's attributable after tax cash flow from a Diamond mine at Chidliak.
• Should De Beers decide to exit the Joint Venture prior to completion of the BFS, Peregrine can purchase De Beers' unencumbered earned interest in Chidliak for De Beers' expenditures on the Project, less $20 million, under a payment schedule similar to that outlined above.
• Both De Beers and Peregrine hold mutual pre-emptive rights over the sale of any interest in Chidliak.
• Following De Beers' earn-in, annual work programs and budgets will require unanimous approval of the participants.
• Each participant is to retain Diamond marketing rights for their respective share of production.

The Joint Venture will be governed by a management committee comprised of equal representation from each of De Beers and Peregrine, with De Beers having the right to appoint a chairman. Each party's voting rights will be in proportion to their respective ownership in the Project. From commencement of the Joint Venture until completing their earn-in, De Beers will have 50.1% of the voting rights.

If either Peregrine or De Beers does not wish to proceed with a work program to construct a mine at Chidliak in accordance with the BFS, either participant may propose a plan and budget in respect thereof and the other party has the opportunity to participate, exit or dilute.

Mr. Eric Friedland, Peregrine's CEO, said, "When we began discussions with potential partners for Chidliak last March, our principal objective for any future joint venture transaction was to ensure certainty of finance, in a manner that minimized share dilution to Peregrine's shareholders, for completion of a NI 43-101 compliant, bankable feasibility study. We also wanted to ensure that the extensive work leading up to and including the bankable feasibility study would be conducted in a professional, comprehensive and timely fashion. I'm very confident that these objectives will be met should our new partner, De Beers, the world's most technically proficient, Diamond mining and marketing company and a household name in the Diamond industry for the past 124 years, decide to enter into the Chidliak Joint Venture."

Mr. Tony Guthrie, De Beers Canada Inc.'s CEO, said, "We see Chidliak as an exciting prospect and complementary to our existing pipeline of Diamond operations and projects, which are the most comprehensive in Canada. With 50 years of experience in Canada, we look forward to bringing to bear our extensive knowledge of Diamond exploration and mining as we work with Peregrine's professional and experienced management team."

The Option is subject to regulatory approval and BHP Billiton's consent as required under the Purchase, Royalty and Security Agreements between Peregrine and BHP Billiton, which Peregrine and De Beers expect to receive in due course.

About De Beers Group

De Beers Group is a member of the Anglo American plc group. Established in 1888, De Beers is the world's leading Diamond company with unrivalled expertise in the exploration, mining and marketing of diamonds. Together with its joint venture partners, De Beers employs approximately 16,000 people across the Diamond pipeline, and is the world's largest Diamond producer, by value, with mining operations in Botswana, Canada, Namibia and South Africa. As part of the company's operating philosophy, the people of De Beers are committed to Living up to Diamonds by making a lasting contribution to the communities in which they live and work, and transforming natural resources into shared national wealth. For further information about De Beers visit www.debeersgroup.com.

About Peregrine Diamonds

Peregrine Diamonds is a Diamond exploration and development company focussed on Canada's North. Peregrine has discovered two new Diamond districts in Nunavut, Nanuq in 2007 and Chidliak in 2008. At its 72%-owned, nine hectare DO-27 kimberlite in the Northwest Territories, located 27 kilometres from the Diavik Diamond Mine, a NI 43-101 compliant mineral resource of 18.2 million carats of diamonds in 19.5 million tonnes of kimberlite at a grade of 0.94 carats per tonne, which is open at depth, was confirmed in 2008. At its 100%-owned Chidliak project, located 120 kilometres from Iqaluit, the capital of Nunavut, the Company has discovered 61 kimberlites to date, and is preparing to collect the first bulk samples from up to 6 kimberlites that exhibit economic Diamond mining potential. Peregrine also continues to evaluate earlier stage Diamond exploration projects it controls in Nunavut and the Northwest Territories.

For further information on Peregrine Diamonds, please visit www.pdiam.com.

Forward-Looking Statements: This news release contains forward-looking statements. 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 exercise of the option to joint venture by De Beers, the proposed exploration programme, funding availability, anticipated exploration results, resource estimates 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 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 the exercise of the option to joint venture by De Beers, availability and cost of funds, timing and content of work programmes, results of exploration activities, interpretation of drilling results and other geological data, world Diamond markets, future Diamond prices, 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 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.