$ Junior Mining and Exploration $

[howestreetbull]

PGD.to out with another set of kimberlite findings...hsb

Sep 16, 2010 08:20 ET
Peregrine Discovers 12 More Kimberlites at Chidliak, Bringing Total to Date to 50; CH-31 Now Estimated at More Than Five Hectares in Size

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 16, 2010) - Peregrine Diamonds Ltd. ("Peregrine" or "the Company") (TSX:PGD) is pleased to report the discovery of 12 new kimberlites and the successful completion of the summer exploration programme at the Chidliak project ("Chidliak" or "the Project") on Baffin Island, Nunavut, Canada. These 12 new discoveries bring the total number of kimberlites discovered to date on the Project to 50, of which 34 have been discovered in 2010. Eight of the new kimberlites were discovered by reverse circulation ("RC") drilling, one by core drilling and three by prospecting. In addition, 11 core holes and ten RC holes were drilled into six previously identified kimberlites to increase the understanding of their size and diamond potential.

Seven of the kimberlites discovered to date are likely to be greater than one hectare in size based on drill data and ground geophysical signatures. Highlighting the probability for large kimberlites and associated tonnage at Chidliak is CH-31, where interpretation of the geophysical and drill data and the distribution of kimberlite float indicate that this kimberlite is over five hectares in size. A 410 metre kimberlite intersection was drilled at CH-31 in a core hole inclined at a 45 degree angle, which equates to an estimated horizontal width of at least 290 metres.

Mr. Eric Friedland, Peregrine's CEO, said, "We continued to discover kimberlites at an unprecedented rate at Chidliak this summer, averaging one kimberlite discovery every two and a half days. This new Canadian diamond district now stretches approximately 70 kilometres in a north-south direction and 40 kilometres east-west and we are confident that Chidliak hosts additional kimberlites with economic diamond potential. There are currently over 300 kimberlite-type geophysical anomalies within the existing airborne geophysical coverage to be evaluated beginning next field season. Also, two kimberlites were discovered this year on our adjacent, 100%-owned Qilaq project, further expanding this phenomenal diamond exploration region."

Mr. Brooke Clements, Peregrine's President, said, "The discovery of 34 new kimberlites this year by our team at Chidliak further illustrates the very strong exploration potential of this diamond district. We are looking forward to a steady stream of diamond results over the coming months as we prepare for an ambitious 2011 exploration programme. The RC drill rig is perfect for rapidly testing kimberlite targets, and it will be an important exploration tool in future programmes. A very important milestone achieved this year was the discovery of several larger kimberlites with geophysical characteristics that differ from those of the majority of the known kimberlites. The confirmed presence of larger kimberlite bodies and the excellent potential for additional large-scale discoveries further heightens the economic upside of this Project."

TWELVE NEW KIMBERLITE DISCOVERIES

The discovery of 12 new kimberlites at Chidliak brings the total discovered in 2010 to 34, representing a 112 percent increase over the 16 discoveries made in 2008/2009. Of the 50 kimberlite discoveries made so far, 24 have been by prospecting and 26 by drilling. The processing of microdiamond samples from the 2010 kimberlite discoveries has commenced at the Saskatchewan Research Council Geoanalytical Laboratories ("the SRC"), and the results will be reported as they become available. More detailed descriptions of the geology of the kimberlites will be provided with the diamond results.

An exploration summary showing several of the new kimberlite discoveries is available at the following link: http://www.pdiam.com/i/pdf/chidliak189.pdf.

Eight new Kimberlites Discovered by RC Drilling

The lightweight RC drill rig, which began operating in early August, has proven to be an efficient exploration tool for rapidly testing geophysical anomalies. The primary objective of this year's RC drilling campaign was to drill-test as many kimberlite-type geophysical anomalies as possible in a short time period, and to obtain material for a preliminary assessment of the diamond potential of any new kimberlites discovered. The CH-39, CH-40, CH-42 through CH-46 and CH-48 kimberlites were discovered in August and September and 24 anomalies were drilled without intersecting kimberlite. For each of the eight RC discoveries, at least one hole was drilled into the kimberlite with a minimum intercept length of 16 metres, providing sufficient kimberlite chips to complete diamond analysis by caustic fusion at the SRC. The RC discoveries will be evaluated using a core rig next year if diamond results warrant.

CH-41 Kimberlite Discovered by Core Drilling

The CH-41 kimberlite was discovered by drilling a magnetic high geophysical anomaly with an estimated surface expression of 0.5 hectares as determined by ground geophysics. Two inclined holes were drilled across the kimberlite from the same setup and magmatic kimberlite was encountered. (Table 1).

TABLE 1: DRILL HOLE DATA FROM THE CH-41 KIMBERLITE
Kimberlite,
Drill Hole # Azimuth
(degrees) Inclination
from
Horizontal
(degrees) Overburden
(m) Kimberlite Intercepts (m) End
of
Hole
(m)
From To Intercept
CH-41, #1 270 -50 8 38 90 52 159
118 119 1
CH-41, #2 270 -65 5 31 103 72 190
110 159 49
Note: All intercepts below overburden that are not kimberlite are gneiss and both holes were drilled from the same setup.

Three New Kimberlites Discovered by Prospecting

The CH-47 kimberlite was discovered when abundant kimberlite float was found on the shore of a small circular lake hosting an isolated, circular magnetic high anomaly with an estimated surface expression of one hectare as determined by ground geophysics. The kimberlite is highly altered but contains olivine macrocrysts and country rock xenoliths.

The CH-49 kimberlite was discovered when abundant magmatic kimberlite cobbles and boulders were found within a linear topographic feature interpreted to host a kimberlite dyke.

On September 12, the CH-50 kimberlite was discovered when abundant magmatic kimberlite float was found along a north-south trending magnetic high linear feature in an area of anomalous kimberlite indicator mineral ("KIM") samples.

DRILLING OF KNOWN KIMBERLITES AND LARGE-SIZED KIMBERLITE POTENTIAL

In addition to the eight core holes drilled into the CH-6 kimberlite reported on July 19, 2010, totals of 11 core holes and ten RC holes were drilled into the CH-1, CH-7, CH-9, CH-12, CH-16 and CH-31 kimberlites (Table 2), providing important information concerning the geology and dimensions of these kimberlites as well as additional material for diamond analysis by caustic fusion at the SRC. At this time, the available drill and geophysical data suggests that at least seven of the 50 kimberlites discovered to date at Chidliak have the potential to be at least one hectare in size: CH-1, CH-7, CH-16, CH-28, CH-31, CH-32 and CH-33. Kimberlites CH-1, CH-7, CH-9, CH-12, CH-16 and CH-31 are described below, CH-28 and CH-32 were described in a news release issued on August 4, 2010 and the discovery of CH-33 was reported on August 23, 2010. The exploration summary at http://www.pdiam.com/i/pdf/chidliak189.pdf includes images of several of the kimberlites described below.

CH-31

The discovery of the CH-31 kimberlite by prospecting was announced on August 4, 2010. Abundant kimberlite float was found at two localities that were 300 metres apart. The geophysical anomaly associated with the kimberlite is a strong electromagnetic anomaly with an associated subtle magnetic low with an estimated surface expression of more than five hectares. A core hole, collared in kimberlite and drilled at an inclination of 45 degrees to the south from the north edge of the anomaly, yielded a 410 metre intersection of kimberlite, representing a true horizontal width of at least 290 metres. A vertical hole from the same setup was terminated in kimberlite at a depth of 90 metres. The kimberlite is described as volcaniclastic kimberlite with carbonate xenoliths. This is a very important development for the Project as it emphasizes the probability of discovering more multi-hectare kimberlite bodies. The geophysical model generated from CH-31 will be used to select additional large kimberlite targets at Chidliak for ground geophysical surveying and drilling in 2011.

CH-7

The discovery of the CH-7 kimberlite was reported on August 6, 2009. Subsequent diamond results from CH-7 reported on October 5, 2009 showed a coarse diamond size distribution in a 221 kg sample that yielded a 0.64 carat diamond. The processing by dense media separation ("DMS") of a 50 tonne mini-bulk sample, collected by surface trenching during the 2010 summer programme, commenced at the SRC this week.

In an effort to determine the size potential of CH-7, six core holes and two RC holes were drilled into the kimberlite. Two of the holes drilled perpendicular to each other across the southern portion of the body, numbers 1 and 5, each at an inclination of 45 degrees from horizontal, returned kimberlite intersections of 125 and 134 metres, for true horizontal widths of 88 and 95 metres, respectively. Interpretation of all of the drill data from CH-7 suggests the kimberlite contains both magmatic and volcaniclastic phases and is greater than one hectare in size at the surface.

CH-1

The CH-1 kimberlite is interpreted as a complex body that consists of multiple kimberlite lobes that together define a magnetic high geophysical anomaly with an estimated surface expression of greater than two hectares. The diamond results from CH-1 to date show a coarse diamond size distribution. This summer, vertical RC holes were drilled into three separate magnetic high anomalies at CH-1, which are interpreted to represent distinct kimberlite lobes, and kimberlite was intersected in all three holes underneath less than two metres of overburden.

CH-12

The CH-12 kimberlite was discovered in 2009 by prospecting, and microdiamond results released on November 12, 2009 showed a coarse diamond size distribution. Two core holes and two RC holes were drilled into this kimberlite this summer.

CH-9

The CH-9 kimberlite was discovered by prospecting in 2009 when abundant kimberlite boulders and cobbles were found at surface associated with a linear magnetic high anomaly that was adjacent to a circular anomaly. Two RC holes were drilled into the circular anomaly confirming that it was also kimberlite and providing sufficient material for initial diamond testing at the SRC.

CH-16

As reported on September 14, 2009, the CH-16 kimberlite was discovered by core drilling of a magnetic low anomaly with an estimated surface expression of 200 metres by 150 metres. The magnetic anomaly consists of two circular lobes, with only the northern lobe having been drilled in 2009. In 2010, the southern lobe was tested by drilling an RC hole at an inclination of 60 degrees from horizontal. Approximately 24 metres of kimberlite was intersected under 11 metres of overburden, confirming that CH-16 is greater than one hectare in size.

TABLE 2: DRILL HOLE DATA FROM THE CH-7, CH-12 AND CH-31 KIMBERLITES
Kimberlite,
Drill Hole # Azimuth
(degrees) Inclination
from
Horizontal
(degrees) Overburden
(m) Kimberlite Intercepts (m) End
of
Hole
(m)
From To Intercept
CH-07, #1 048 -45 8 27 152 125 240
CH-07, #2 048 -60 7 38 159 120 178
CH-07, #3 - -90 7 7 51 44 95
CH-07, #4 015 -60 6 6 37 30 72
CH-07, #5 322 -45 11 11 145 134 155
CH-07, #6 322 -45 9 62 66 4 66
CH-07, RC #1 - -90 3 3 29 26 29
CH-07, RC #2 180 -60 7 26 48 22 48

CH-12, #1 080 -45 8.5 53 113 62 144
CH-12, #2 080 -50 8.5 82 132 50 168
CH-12, RC #1 090 -50 2 2 28 26 45
CH-12, RC #2 - -90 1 1 17 16 17

CH-31, #1 203 -45 6 6 416 410 417
CH-31, #2 023 -60 6 - - - 36
CH-31, #3 - -90 5 5 90 85 90
Note: All intercepts below overburden that are not kimberlite are gneiss.

2010 EXPLORATION PROGRAMME SUMMARY

Following is a summary of the major accomplishments in the 2010 Chidliak exploration programme:

Airborne Geophysics. Extensions to the existing 11,700 line kilometre 2008 aeromagnetic survey totalled 20,587 line kilometres.

Ground Geophysics. Approximately 1,800 line kilometres of ground geophysical surveys were completed over approximately 100 geophysical anomalies.

Prospecting. 112 geophysical anomalies were evaluated by prospecting, resulting in the discovery of 15 kimberlites.

Indicator Mineral Sampling. 404 KIM samples were collected.

Mini-bulk Sampling. Mini-bulk samples of approximately 50 and 15 tonnes, respectively, were collected from the CH-7 and CH-6 kimberlites.

Core Drilling. A total of 7,672 metres was drilled in 48 holes. Eleven new kimberlites were discovered, 19 holes were drilled into known kimberlites and eight anomalies were drilled without intersecting kimberlite.

RC Drilling. A total of 1,507 metres was drilled in 50 holes in 35 days. Thirty-four new anomalies were drilled, eight new kimberlites were discovered and RC drilling was completed on five known kimberlites.

Environmental Baseline Study. The second year of work on an environmental baseline study was completed and a weather station was commissioned.

Personnel. From mid-March to mid-June, 15 to 25 employees and contractors were on site at Chidliak at any given time, increasing to an average of 40 to 48 people between mid-June and early September.

2011 EXPLORATION PROGRAMME

Peregrine and BHP Billiton have begun planning for the 2011 exploration programme at Chidliak. At this time the partners expect that the 2011 programme will be at least of a similar scale to the 2010 programme with two principle objectives, the further investigation of kimberlites demonstrating economic potential and the continued rapid discovery of new kimberlites. Peregrine will be the operator of the 2011 exploration programme.

As announced on November 24, 2008, BHP Billiton has exercised its First Option earn-in rights for Chidliak. Peregrine projects that BHP Billiton will reach $22.3 million in cumulative expenditures toward the end of this month, thereby earning a 51 percent interest in the Project. Upon vesting a 51 percent interest, BHP Billiton has a Second Option to earn an additional seven percent interest in the project by electing to fund the project to completion of a Bankable Feasibility Study. Peregrine expects to be advised regarding the Second Option election in November, 2010.

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 programmes carried out by the Company at Chidliak. Mr. Holmes has reviewed this release and approves of its contents.