VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 28, 2013) - Peregrine Diamonds Ltd. ("Peregrine" or "the Company") (News - Market indicators) is pleased to report the commencement of a bulk sampling program at the CH-6 kimberlite, as part of a $5 million work plan, on the Company's 100 percent-owned Chidliak project ("Chidliak" or "the Project") located on Baffin Island, 120 kilometres from Iqaluit, the capital of Nunavut, Canada. As reported by the Company on September 5, 2012, the Project is subject to an option agreement with De Beers Canada ("De Beers") whereby De Beers has the exclusive right until December 31, 2013 to enter into an earn-in and joint venture agreement ("the JV Agreement") for Chidliak on a 50.1 percent De Beers / 49.9 percent Peregrine basis.

The bulk sample will weigh approximately 200 tonnes and be collected by surface trenching. As reported on December 6, 2010, a 14.11 tonne mini-bulk sample collected from CH-6 returned a grade of 2.84 carats per tonne ("cpt"). If that grade is confirmed with further testing, CH-6 would be one of the highest grade kimberlite pipes in the world. The field portion of the bulk sampling program will commence in early February and be completed by mid-April. Sample processing for the recovery of commercial-sized diamonds, with subsequent independent diamond valuations, is expected to commence in the fourth quarter, or earlier in the event De Beers has entered into the Chidliak JV Agreement. The diamond grade and value information acquired from the 200 tonne sample will allow for the development of a preliminary revenue model for CH-6 and serve as the foundation for future resource calculations. The bulk sampling program, currently being funded by Peregrine, is budgeted at $3 million. 

Ongoing work being funded by De Beers, budgeted at $2 million, includes a comprehensive desktop mining study, kimberlite pipe characterization studies, ground geophysics, and new target generation work. De Beers' expenditures will be applied to their earn-in obligation of $58.5 million should they enter into the JV Agreement. In the event De Beers does not elect to enter into the joint venture, Peregrine will not be required to refund these expenditures.

This jointly funded Chidliak program has been designed by Peregrine and De Beers to meet two objectives. Firstly, information from the bulk sample at CH-6 together with the desktop mining study, scheduled for completion this quarter, will be instrumental in the advancement of the Project towards development. Secondly, the results of the kimberlite characterization studies, ground geophysics and target generation work will optimize future programs that will include the evaluation of known kimberlites with economic potential and exploration for new kimberlite pipes.

Excellent new microdiamond results from CH-6 continue to support a commercial diamond size distribution. A cumulative 251.3 kilogram sample of near-surface core collected from six core holes drilled in 2011 returned 639 diamonds larger than the 0.106 mm sieve size, including 24 commercial-size diamonds larger than the 0.85 mm sieve size weighing a total of 1.47 carats. The two largest diamonds recovered from the samples were described by the Saskatchewan Research Council ("the SRC") as a 0.45 carat yellow transparent octahedron and a 0.42 carat yellow transluscent tetrahexahedron. 

Mr. Eric Friedland, Peregrine's CEO said, "With the preparatory work we completed in 2012, we are well-positioned to efficiently collect and transport this important 200 tonne bulk sample. I am confident that the resulting parcel of commercial-size diamonds will help us establish an initial average diamond value, revenue model, and inferred resource for CH-6. Integrating an inferred resource with the comprehensive mining study, currently being prepared by De Beers, could allow for the completion of a NI 43-101-compliant Preliminary Economic Assessment for CH-6 in the first half of 2014. Confirming the economic viability of CH-6 would establish a potential base-case development scenario which could be built upon as additional kimberlite pipes at Chidliak are advanced to resource status."

THE 2013 CH-6 BULK SAMPLE

The field portion of the CH-6 bulk sampling program will commence in a few weeks. An excavator will be used to remove approximately four metres of overburden and the 200 tonne kimberlite sample will be collected from depths of four to eight metres and placed in bulk sample bags with security seals. Between mid-March and mid-April, the bulk sample bags will be transported from Chidliak to Iqaluit overland on haulage sleds and by air using a DC-3 aircraft. Nuna Logistics Ltd. has been selected as the contractor to execute the sample excavation and ground transportation portions of the program. The sample will be securely stored in Iqaluit until July when it will be shipped to Montreal by sealift. The sample is scheduled to be processed by dense media separation ("DMS") at the SRC.

In addition to the 200 tonne sample that will be processed by DMS, up to one tonne of kimberlite will be collected from CH-6 for microdiamond analysis at the SRC. The results will assist in correlating the bulk sample diamond results with previous core drilling results at depth. 

NEW MICRODIAMOND RESULTS AND CH-6 SUMMARY

A cumulative 251.3 kilogram sample from six core holes drilled in 2011 in the vicinity of the planned 2013 bulk sample location was processed for diamonds at the SRC. The results are summarized in the following table:

In addition to the 14.11 tonne mini-bulk sample with a grade of 2.84 cpt, a 1.03 tonne sub-sample collected from the upper portions of CH-6, to a maximum depth of 45 metres, returned a diamond content of 6.81 cpt. As reported on April 2, 2012, based on the current geological model, it is estimated that CH-6 hosts 5.7 million tonnes of kimberlite to a depth of 375 metres below surface. This tonnage estimate currently does not constitute a mineral resource and there is no assurance that a resource will be identified through further exploration work at CH-6.

Mr. Alan O'Connor, Professional Geologist, Peregrine's Chidliak Project Manager, is a Qualified Person under National Instrument 43-101 and is responsible for the design and conduct of the programs carried out by the Company at Chidliak. 

Mr. David Farrow, Professional Geologist and President of Geostrat Consulting Services Inc., a Qualified Person under National Instrument 43-101, prepared the CH-6 tonnage calculation and has reviewed the CH-6 geological model and diamond size distribution data. 

Mr. O'Connor and Mr. Farrow have reviewed this release and approve of its contents.

ABOUT PEREGRINE DIAMONDS

Peregrine Diamonds is a diamond exploration and development company focused on Canada's North. Peregrine has discovered two new diamond districts in Nunavut, Nanuq in 2007 and Chidliak in 2008. At its 72 percent owned, nine hectare DO-27 kimberlite in the Northwest Territories, located only 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 percent-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 sample from the CH-6 kimberlite in 2013, currently one of seven 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 and through comprehensive evaluation of its extensive and proprietary diamond exploration databases, is working towards discovering new diamond districts in North America.

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.