Peregrine Diamonds Ltd.

Peregrine Diamonds Ltd.

July 09, 2007 08:02 ET

Peregrine Enters Into a New Falcon™ System Deployment Agreement

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 9, 2007) - Peregrine Diamonds Ltd. (TSX:PGD) ("Peregrine") today announced that it has entered into a new Falcon™ system deployment agreement with BHP Billiton which will govern Peregrine's use of the Falcon™ airborne gravity gradiometer system as well as BHP Billiton's rights to earn into certain mineral discoveries made by that system.

In addition, the new agreement rationalizes the numerous joint venture, earn-in, and Falcon™ data usage and deployment agreements that existed between Peregrine and BHP Billiton on various diamond, copper and IOCG properties located in Canada, United States, Mexico, and Peru.

Highlights of the new agreement include:

- Termination of BHP Billiton's right to earn-into the Great Bear, Ica, IM, Lac de Gras East, Mexico, Nanuq, Pellatt Lake, TW, WO, and US Generative Properties. These earn-in rights have been replaced with royalties varying from 0.7% to 2%, depending on the property and commodity, in favour of BHP Billiton. The royalties can be purchased by Peregrine, in whole or in part, at the completion of a feasibility study, for an independently determined fair market value.

- BHP Billiton retains the right to earn up to 58% of the Foxe Basin, Chidliak, Mirage Bay and Timmijuuq properties, and 65% of any other future mineral property where Falcon™ is deployed by Peregrine. To exercise its earn-in rights, BHP Billiton must first expend US$15 million to US$50 million per property, depending on when the earn-in commences, to earn a 51% interest. BHP Billiton can earn an additional 7% interest by delivering a bankable feasibility study. In the case of a future mineral property where Falcon™ is deployed by Peregrine, BHP Billiton can purchase a further 7% interest (to bring their total to 65%) from Peregrine at the completion of the feasibility study at a price equal to fair market value as independently determined. Additional conditions exist for the creation of a 51-49% joint venture between the parties in the event BHP Billiton does not earn-in beyond 51% and for different earn-in arrangements should Peregrine own less than 100% of any particular property prior to the commencement of a Falcon™ survey.

- Peregrine (and affiliates) will have the right, but not the obligation, to use up to 40,000 line kilometres of Falcon™ airborne gravity gradiometer surveys per year until October 1, 2010.

Peregrine is a well-funded Canadian diamond exploration/development company that is managed by experienced geoscientists. In addition to completing a third bulk sampling program on its WO Diamond Project, NT, Peregrine is also exploring for other diamondiferous kimberlites on its extensive land holdings in Canada. Peregrine trades on the Toronto Stock Exchange under the symbol "PGD".

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