VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 12, 2011) - Peregrine Diamonds Ltd. ("Peregrine" or "the Company")(News - Market indicators) is pleased to announce the successful completion of this year's field program at the Chidliak diamond project ("Chidliak" or "the Project") located 120 kilometres from Iqaluit on Baffin Island, Nunavut, Canada. One major objective of the program was to continue the detailed exploration of kimberlites with economic potential, in preparation for bulk sampling. The drilling of over 5,500 metres on six high-potential kimberlites, and extensive logistical planning and arrangements, have set the stage for bulk sampling of select kimberlites by way of large diameter reverse circulation ("RC") drilling, which is scheduled to commence next winter. The bulk sampling program aims to extract roughly 200-carat diamond parcels per kimberlite to support independent diamond valuations, considered a crucial step towards determining economic viability. Another objective this past season was to find new kimberlites, and with the recent discovery of CH-59, nine kimberlites were discovered this year bringing the current number of known kimberlites at Chidliak to fifty-nine.

In 2011, core drilling was completed on six of the seven kimberlites with economic potential identified on the Project to date, CH-6, CH-7, CH-28, CH-31, CH-44 and CH-45, and a 33.5 tonne mini-bulk sample was collected from surface at CH-28. Six of the kimberlites with economic potential are located within an area with an eight kilometre radius, "the Southern Focus Area", whereas one, CH-28, is located 45 kilometres north of the Southern Focus Area. New microdiamond results from CH-7 and CH-28 confirm previously reported coarse diamond size distributions. Microdiamond results from the CH-17, CH-51 and CH-55 kimberlites all yielded commercial-size diamonds. Diamond results from ten kimberlites are expected in the coming months. All diamond analyses are being performed at the Saskatchewan Research Council Laboratories ("the SRC") in Saskatoon.

Mr. Eric Friedland, CEO, said "The 2012 bulk sampling program is an important step along the development path at Chidliak and it will allow Peregrine to continue to unlock the value at this exciting diamond project. Our goal is to deliver the first diamond mine on Baffin Island. We will work to achieve this goal by rapidly advancing the known kimberlites with economic potential as well as continuing to explore for additional diamondiferous pipes. Unresolved indicator mineral trains and the presence of kimberlite float at multiple localities not currently linked to sources give us confidence that more kimberlites will be discovered next season."

2011 WORK CONDUCTED ON KIMBERLITES WITH ECONOMIC POTENTIAL

Extensive core drilling was completed this year on six of the seven potentially economic kimberlites currently identified at Chidliak, with substantial core drilling of the CH-1 kimberlite scheduled for 2012. CH-6 and CH-7 are scheduled for bulk sampling in 2012 and forthcoming diamond results from CH-31, CH-44 and CH-45 will allow prioritization of these bodies for bulk sampling next year. 

CH-6

A total of 1,776 metres was drilled into CH-6 in four vertical and seven angle core holes. The drilling has outlined an estimated surface area for CH-6 of 0.9 hectares. The drill core will be logged in detail and select intervals will be tested for diamonds to refine the geologic model and diamond distribution in the body. As reported on December 6, 2010, a 14.41 tonne sample of drill core collected from CH-6 in 2009 and 2010 returned an average diamond grade of 2.84 carats per tonne ("cpt"). If confirmed by bulk sampling, this would be one of the highest diamond grades for any kimberlite in the world.

CH-7

A total of 1,186 metres was drilled into CH-7 in six angle and one vertical core hole. CH-7 is currently estimated at one hectare in size and, like CH-6, the drill core will be logged in detail and select intervals will be tested for diamonds to refine the geologic model and diamond distribution in the body. Detailed examination of 2010 drill core from CH-7 identified a previously unsampled phase in the deeper portion of the south lobe of the pipe. A 143.1 kg sample of this material yielded 165 diamonds larger than the 0.106 sieve size, including 0.17 carats of commercial-size stones (+0.85 mm) (Table 1). As reported on November 22, 2010, a 47 tonne mini-bulk sample collected from the surface of CH-7 returned a diamond grade of 1.04 cpt. 

CH-28

As reported on September 23, 2010, CH-28, estimated at approximately two hectares in size, was discovered at surface and a 239 kilogram kimberlite sample returned encouraging microdiamond results. As reported on June 2, 2011, a core hole was drilled across CH-28 this year. A 393.1 kilogram sample of drill core yielded 251 diamonds larger than the 0.106 mm sieve size including 0.13 carats of commercial-size (+0.85 mm) stones (Table 1). In July 2011, a 33.5 tonne mini-bulk sample of surface material was collected for diamond analysis. This mini-bulk sample is currently at the SRC awaiting processing and results are expected in the fourth quarter. 

CH-31

Two vertical core holes and six angle holes totalling 1,153 metres were drilled into the CH-31 kimberlite in June and July, yielding a sample of approximately 3.9 tonnes. The 3.9 tonne sample together with a sample of approximately one tonne collected by core drilling in 2010 will be analyzed for diamonds by caustic fusion. Based on current drilling and geophysical interpretation, the surface expression of CH-31 is currently estimated to be four hectares. As reported on October 29, 2010, an 840 kilogram sample collected from CH-31 in 2010 yielded 1.39 carats of commercial-size (+0.85 mm) diamonds including a clear, 1.15 carat gem-quality stone.

CH-44 and CH-45

Five core holes totalling 1,123 metres were drilled into the CH-44 kimberlite, a body with an estimated size of 0.4 hectares. As reported on November 25, 2010, a 312 kilogram sample of RC cuttings from CH-44 returned 910 diamonds larger than the 0.106 mm sieve size including nine commercial-size (+0.85 mm) stones weighing 0.45 carats. Logging and sampling of 2011 drill core from CH-44 is ongoing.

Four core holes totalling 311 metres were drilled into the CH-45 kimberlite, a body estimated to be 0.3 hectares in size. As reported on January 13, 2011, a 174 kilogram sample of RC cuttings from CH-45 returned 158 diamonds larger than the 0.106 mm sieve size including two commercial-size (+0.85 mm) stones weighing 0.09 carats. Logging and sampling of 2011 drill core from CH-45 is ongoing.

Drill core from CH-44 and CH-45 will be analyzed for diamonds by caustic fusion in the fourth quarter.

PREPARATIONS FOR 2012 BULK SAMPLE PROGRAM

In preparation for 2012 bulk sampling, site layouts were designed and access trails were mapped to the CH-6, CH-7, CH-31, CH-44 and CH-45 kimberlites. Cooper Drilling LLC has been awarded the contract to provide large diameter RC drilling services. NUNA Logistics has been selected to provide heavy equipment and logistical support for the program. In addition, substantial equipment, supplies and fuel are being shipped to Iqaluit by sealift this month. More details on the 2012 program will be provided in the fourth quarter.

Table 1: SUMMARY OF NEW CAUSTIC FUSION DIAMOND RESULTS FOR CH-7 AND CH-28

2011 KIMBERLITE DISCOVERIES AND CH-17 AND CH-33

Including the CH-59 kimberlite, which was discovered by prospecting and RC drilling in August, nine new kimberlites were discovered at Chidliak in 2011, CH-51 to CH-59. Initial diamond results have now been received for four of the new discoveries, CH-51, CH-54, CH-55 and CH-57, and for CH-17, which was discovered by core drilling in 2010. Diamond results for CH-17, CH-51 and CH-55 are presented in Table 2. A 219 kilogram sample of drill core from CH-53 and a 193 kilogram sample of RC cuttings from CH-57 did not yield any diamonds greater than the 0.106 mm sieve size. The CH-54 and CH-56 kimberlites have been assigned a lower priority and diamond testing of these bodies has been deferred. Caustic fusion results for CH-52, CH-58 and CH-59 are expected in the coming months. Detailed assessment of all exploration data from Chidliak will continue this Fall and Winter in preparation for continued exploration for more diamondiferous kimberlites in 2012.

CH-51 and CH-17

As announced on April 20, 2011, CH-51 was discovered by drilling one vertical core hole and is located under a lake. A 228 kilogram sample of drill core yielded 76 diamonds larger than the 0.106 mm sieve size including three commercial-size (+0.85 mm) stones weighing a total of 0.04 carats (Table 2). The CH-17 kimberlite was discovered in May 2010 and is located 200 metres north of CH-51 under the same lake. Insufficient drill core was recovered in 2010 from this kimberlite to process for diamonds. As announced on June 2, 2011, a vertical hole was drilled into CH-17 this year and a 143 kilogram sample yielded 41 diamonds larger than the 0.106 mm sieve size, including two commercial-size (+0.85 mm) stones (Table 2).

CH-55

As announced on June 2, 2011, the CH-55 kimberlite was discovered when two angled holes were drilled from the same setup across a magnetic low geophysical anomaly. CH-55 is currently estimated to be 0.8 hectares in size. A 195.6 kilogram sample was submitted to the SRC for diamond analysis. The sample yielded 214 diamonds larger than the 0.106 mm sieve size including one plus 1.18 mm diamond that weighed 0.03 carats (Table 2).

CH-52 and CH-59

As announced on June 2, 2011, the CH-52 kimberlite, located near Sunrise camp, was discovered by RC drilling. Based on the presence of abundant indicator minerals in the drill cuttings, two core holes were drilled across the kimberlite. The estimated surface area of CH-52 is 0.2 hectares. Samples of drill core will be processed for diamonds by caustic fusion.

The CH-59 kimberlite, located two kilometres north of CH-52, was discovered by drilling two RC holes into a magnetic high anomaly. Abundant kimberlite pebbles and cobbles were discovered as float at the southern edge of the magnetic anomaly. Samples of the kimberlite float will be processed for diamonds by caustic fusion.

CH-33

As announced on August 23, 2010, the CH-33 kimberlite was discovered by prospecting in an area of abundant kimberlite boulders and cobbles. In 2011, three angle core holes were drilled into the kimberlite, and a 400 kilogram sample has been submitted for diamond analysis. Based on current drilling and geophysical interpretation, CH-33 is currently estimated to have a surface expression of five hectares.

SUMMARY OF FIELD WORK COMPLETED IN 2011

Following is a summary of exploration work completed in 2011:

• A total of 8,468 metres of core drilling with two drills: 5,583 metres of drilling on six kimberlites with economic potential, drill-testing of six new targets that led to the discovery of six new kimberlites, and the drilling of CH-17
• 11,105 line kilometre helicopter-borne magnetic/electromagnetic geophysical survey over the northern portions of Chidliak
• Evaluation of 22 targets by 1,530 metres of RC drilling resulting in the discovery of three kimberlites
• 2,055 line kilometres of ground geophysical surveys
• Collection of 443 heavy mineral samples
• Evaluation of over 80 anomalies by prospecting, kimberlite float not yet definitively linked to an anomaly was discovered at two of these localities
• Quaternary mapping and environmental and archaeological surveys
• Prospecting, ground geophysics and RC drilling determined that 17 targets greater than 2 hectares in size, that were assessed based on geophysical characteristics similar to CH-31, were not kimberlite.

Table 2: SUMMARY OF CAUSTIC FUSION DIAMOND RESULTS FOR CH-17, CH-51 AND CH-55

FORTHCOMING DIAMOND RESULTS

Diamond results for samples from kimberlites CH-6, CH-7, CH-28, CH-31, CH-33, CH-44, CH-45, CH-52, CH-58 and CH-59 are expected from the SRC in the fourth quarter of 2011 and the first quarter of 2012.

Images and drill data from the 2011 program are available on Peregrine's web-site at www.pdiam.com/i/pdf/Chidliak621.pdf.

Chidliak is a joint venture between Peregrine (49%) and BHP Billiton (51%). Peregrine is the operator of the 2011 program.

The SRC is an independent laboratory that is accredited by the Standards Council of Canada to the ISO/IEC Guide 25 standard for diamond recovery by caustic fusion. The kimberlite samples were collected, sealed in secure containers and shipped to the SRC under strict chain of custody protocols supervised by senior Peregrine personnel.

Mr. Peter Holmes, P. Geo., Peregrine's Vice President, Exploration, is a Qualified Person under NI 43-101 and is responsible for the design and conduct of the programs carried out by the Company on the Chidliak project. Mr. Holmes has reviewed this release and approves of its contents.

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 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 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, any changing budget priorities of BHP Billiton, operational and infrastructure risks, 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.