Peregrine Diamonds Ltd.
TSX : PGD

Peregrine Diamonds Ltd.

January 13, 2011 08:20 ET

Peregrine Announces Coarse Diamond Size Distribution in CH-45 Kimberlite and Commences 2011 Chidliak Programme

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 13, 2011) - Peregrine Diamonds Ltd. (TSX:PGD) ("Peregrine" or "the Company") is pleased to report a coarse diamond size distribution for a 173.6 kilogram sample of reverse circulation ("RC") drill cuttings collected from the CH-45 kimberlite on the 9,800 square kilometre Chidliak project ("Chidliak" or "the Project") on Baffin Island, Nunavut, Canada. The sample was processed by caustic fusion and yielded 158 diamonds larger than the 0.106 mm sieve size, including two diamonds larger than the 0.850 mm sieve size which weigh a total of 0.091 carats. In addition, the CH-33 and CH-37 kimberlites were found to be diamondiferous.

The CH-45 pipe is the seventh kimberlite at the Project displaying characteristics consistent with economic potential in Arctic settings. It is located within the Southern Focus Area, 300 metres northwest of the Discovery exploration camp, and 900 metres south of the CH-7 kimberlite. The Southern Focus Area has an eight kilometre radius and currently hosts six kimberlites with economic potential: CH-1, CH-6, CH-7, CH-31, CH-44 and CH-45.

The following table summarizes caustic fusion diamond results from the CH-45, CH-33 and CH-37 kimberlites. The analyses were performed at the Saskatchewan Research Council Geoanalytical Laboratories ("the SRC").

DIAMOND RESULTS FOR SAMPLES FROM THE CH-45, CH-33 AND CH-37 KIMBERLITES
Kimberlite Sample Weight (kg) Numbers of Diamonds According to Sieve Size Fraction (mm) Total Diamonds Carats (+0.850 mm size)
+0.106 +0.150 +0.212 +0.300 +0.425 +0.600 +0.850 +1.180 +1.700
-0.150 -0.212 -0.300 -0.425 -0.600 -0.850 -1.180 -1.700 -2.360
CH-45 173.6 55 39 30 19 6 7 1 0 1 158 0.091
CH-33M* 248.3 46 29 16 7 4 1 0 0 0 103 -
CH-33V* 225.5 20 14 6 3 2 1 0 1 0 47 0.024
Total CH-33 473.8 66 43 22 10 6 2 0 1 0 150 0.024
CH-37 163.2 7 8 4 4 1 0 0 0 0 24 -
*The CH-33 kimberlite is interpreted to consist of magmatic ("M") and volcaniclastic ("V") phases.

CH-45

The discovery of the CH-45 kimberlite by RC drilling was announced on September 16, 2010. One vertical hole was drilled into a magnetic high geophysical anomaly with an estimated surface expression of 0.5 hectares and was terminated in kimberlite at a depth of 18 metres. Dry RC cuttings of kimberlite were collected directly into 20 litre pails without screening and were security-sealed prior to shipment to the SRC. The CH-45 cuttings were described as olivine macrocrystal kimberlite with abundant kimberlite indicator minerals.

The two diamonds from the CH-45 sample larger than the 0.850 mm sieve size were classified by the SRC as being an off-white, transparent octahedron weighing 0.081 carats and a yellow, translucent cubic weighing 0.010 carats.

CH-33

As announced on August 23, 2010, the CH-33 kimberlite was discovered when abundant kimberlite boulders and cobbles were identified associated with a magnetic low anomaly having an estimated surface expression of at least two hectares as determined by airborne geophysics. The anomaly representing the kimberlite is partially covered by a lake. Both magmatic and volcaniclastic kimberlite with limestone xenoliths are present on surface at CH-33.

The 473.8 kilogram surface sample was collected from the two different kimberlites phases at two separate locations. The one diamond larger than the 1.18 mm sieve size was classified by the SRC as being an off-white, transparent tetrahexahedron weighing 0.024 carats. Further investigation of this kimberlite, including ground geophysics and drilling, is anticipated this year.

CH-37

As announced on August 23, 2010, the CH-37 kimberlite was discovered by drilling a magnetic high geophysical anomaly with an estimated surface expression of 0.5 to one hectare as determined by ground geophysics. Two inclined holes were drilled across the kimberlite from the same setup, and macrocrystic magmatic kimberlite was intersected in both cases.

DIAMOND RESULTS UPDATE

To date, Peregrine has discovered 50 kimberlites at Chidliak, and 26 of the 27 kimberlites for which microdiamond results have been reported are diamondiferous. Microdiamond results have now been reported for 11 of the 34 kimberlites discovered in 2010, and results for another eight kimberlites are expected this quarter. At CH-17, the first kimberlite discovered in 2010, only three metres of kimberlite drill core, containing mantle xenoliths and abundant kimberlite indicator minerals, was recovered due to drilling issues. In an effort to acquire sufficient material for diamond testing, CH-17 will be the first kimberlite drilled in 2011. The remaining 14 kimberlites discovered in 2010 have been assigned a lower priority based on their interpreted size potential and visual characteristics and diamond testing of these bodies has been deferred. Microdiamond results from the 2010 drilling of the following five kimberlites discovered in 2009 will also be reported this quarter: CH-1, CH-7, CH-9, CH-12 and CH-16.

2011 CHIDLIAK EXPLORATION PROGRAMME

Technical and logistical planning, including the finalization of winter target selection, and drilling, aircraft and geophysical service contracts, has commenced for the 2011 Chidliak exploration programme. Field activities are scheduled to begin in mid-February with the establishment of a third exploration camp in the northern region of the Project near the CH-17 and CH-28 kimberlites. The 2011 programme will be similar in scope and scale to the $15.3 million 2010 programme and will have two primary objectives, the evaluation of previously discovered kimberlites with economic potential by drilling and mini-bulk sampling, and continued exploration for new kimberlites. The discovery of the CH-31 kimberlite in August, 2010 illustrates the potential for larger kimberlites at Chidliak. CH-31 is interpreted to be at least five hectares in size and is characterized by a subtle magnetic low anomaly with an associated strong electromagenetic anomaly, representing a new target type at Chidliak that will be a focus of exploration this year. Work in 2011 is expected to include drilling, prospecting, mini-bulk and heavy mineral sampling, ground and airborne geophysical surveying, and logistical planning that would facilitate the extraction of larger samples from key kimberlites in 2012. Two core drills and one RC drill rig will be utilized this year.

Winter drilling is scheduled to commence in mid-March with the core drilling of CH-17, a kimberlite discovered in May, 2010. The drill will then be moved to anomaly 165, located 200 metres south of CH-17 before being moved to other lake-based targets. Ground and airborne geophysical surveys are also scheduled for March and April.

Further details on the 2011 exploration programme will be made available after the programme is finalized in February.

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.

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

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 property. 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.

Contact Information

  • Peregrine Diamonds Ltd.
    Mr. Eric Friedland
    CEO
    604-408-8880
    or
    Peregrine Diamonds Ltd.
    Mr. Brooke Clements
    President
    604-408-8880
    or
    Peregrine Diamonds Ltd.
    Mr. Mike Westerlund
    Vice President, Investor Relations
    604-408-8880
    or
    Peregrine Diamonds Ltd.
    Investor Relations
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    604-408-8881 (FAX)
    investorrelations@pdiam.com
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