Peregrine Announces $13.5 Million, 2010 Diamond Exploration Programme at Chidliak, Baffin Island, Canada

VANCOUVER, BRITISH COLUMBIA, Dec. 21, 2009 (Marketwire) -- Peregrine Diamonds Ltd. (TSX:PGD) ("Peregrine" or "the Company") is pleased to report that a 2010 diamond exploration programme with a budget of $13.5 million has been approved for the 9,800 square kilometre Chidliak project ("Chidliak" or "the Project") on Baffin Island, Nunavut, Canada.

As announced on November 24, 2008, BHP Billiton has elected to exercise its earn-in rights for Chidliak and, under the terms of the earn-in agreement, must sole-fund exploration expenditures of $22.3 million ("the Earn-in Amount") in order to earn a 51 percent interest in Chidliak.

Upon completion of the approved $13.5 million 2010 exploration programme, aggregate exploration expenditures incurred at Chidliak since November 2008 are expected to exceed the Earn-in Amount by approximately $2 million. Upon earning its 51 percent interest, BHP Billiton is entitled to a one-time option ("the Second Option") to earn an additional seven percent (7%) interest in the Project by sole-funding the complete costs of a bankable feasibility study.

The 2010 Chidliak exploration programme has been carefully designed with two main objectives in mind, the discovery of new diamond-bearing kimberlites by the drilling and prospecting of high priority geophysical anomalies and further sampling of kimberlites that exhibit characteristics consistent with economic potential.

The 2010 work will be executed in two phases, a spring phase lasting from mid-March to the end of June and a summer phase lasting from the beginning of July to mid-September. The spring phase will include an airborne geophysical survey, core drilling on ice of lake-based kimberlite targets and a large ground geophysics programme. The summer phase will principally consist of the drilling of high priority kimberlite targets using two core rigs, the collection of mini-bulk samples from the CH-6 and CH-7 kimberlites, additional till sampling, ground geophysics and intensive ground prospecting.

Mr. Brooke Clements, President of Peregrine stated, "We are confident that this $13.5 million exploration programme will add significant value to the Chidliak project in 2010.

In 2008 and 2009, we highlighted the real possibility of Chidliak becoming a world class Canadian diamond mining district by discovering 16 kimberlites with at least three of these displaying characteristics consistent with economic potential in arctic settings. The technical and operational knowledge gained and the infrastructure established at Chidliak in 2009 will allow us to increase our effectiveness in prioritizing targets for drilling and in conducting a cost-effective programme next year. We are planning to generate more than twice as much exploration data as we did in 2009 by way of drilling, mini-bulk sampling, airborne and ground geophysics, prospecting and laboratory analyses.

We are confident that the 2010 results will set the stage for moving Chidliak to the next level in the evaluation of diamond deposits, which is the bulk sampling of multiple kimberlites to obtain parcels of diamonds large enough for reliable diamond valuations."

Peregrine will be the operator of the 2010 exploration programme which will include the following key components:

-- Drilling. Approximately 11,000 metres of drilling will be completedutilizing two core rigs; for reference, a total of 3,984 metres wasdrilled in 2009. High priority kimberlite-type geophysical targets willbe drill tested using NQ (4.8 cm diameter) core. The spring drillingprogramme will commence in April utilizing one drill rig on at leastfive lake-based geophysical anomalies. The first two anomalies scheduledfor drilling are situated approximately 35 kilometres north of thenearest known kimberlites, CH-6 and CH-10. These two anomalies areapproximately 200 metres apart with each having an estimated surfaceexpression greater than one hectare as determined by ground geophysics.Geochemistry studies of kimberlite indicator minerals recovered fromtill samples collected down-ice of these two anomalies in 2009 suggestgood diamond potential. The summer drill programme will commence inearly July and two drill rigs will be used to test up to 30 highpriority land-based geophysical targets.-- Mini-Bulk Sampling. Mini-bulk samples will be collected from the CH-6and CH-7 kimberlites in an effort to obtain an initial parcel ofapproximately 60 carats of commercial-sized (+0.85 mm sieve size)diamonds from each pipe. A representative sample of approximately 12tonnes will be extracted from CH-6 by drilling HQ (6.4 cm diameter)core. A sample of approximately 50 tonnes will be collected by surfaceexcavation from CH-7. In 2009, 569 and 221 kilogram samples collectedfrom CH-6 and CH-7 respectively yielded 4.58 and 0.70 carats ofcommercial-sized diamonds.-- Airborne Geophysics. A helicopter-borne airborne geophysical survey willcommence in March 2010. The survey will be designed to cover kimberliteindicator mineral anomalies not covered by the 2008 survey. The exactsize and boundaries of the survey will be determined after all resultsfrom the 1,273 kimberlite indicator mineral samples collected in 2009are received in February, 2010.-- Prospecting and Indicator Mineral Sampling. Two, two-person crews willbe devoted to prospecting and indicator mineral sampling in the summerphase of the programme. Prospecting has proven to be an effectiveexploration method at Chidliak, with nine of the sixteen currently knownkimberlites being discovered at surface while ground-checkinggeophysical anomalies. Approximately 400 follow-up kimberlite indicatormineral samples will be collected in anomalous areas identified fromprevious indicator mineral sampling programmes.-- Ground Geophysics. Approximately 50 kimberlite-type anomalies will beevaluated by ground geophysical surveys during the spring and summerphases of the programme.-- Environmental Baseline and Infrastructure Studies. Baselineenvironmental studies will continue and access and infrastructure needsthat may be required for future bulk sampling programmes will beassessed.

As announced on November 24, 2008, BHP Billiton has elected to exercise its earn-in rights for Chidliak and, under the terms of the earn-in agreement, must sole-fund exploration expenditures of $22.3 million ("the Earn-in Amount") in order to earn a 51 percent interest in Chidliak.

Upon completion of the approved $13.5 million 2010 exploration programme, aggregate exploration expenditures incurred at Chidliak since November 2008 are expected to exceed the Earn-in Amount by approximately $2 million. Upon earning its 51 percent interest, BHP Billiton is entitled to a one-time option ("the Second Option") to earn an additional seven percent (7%) interest in the Project by sole-funding the complete costs of a bankable feasibility study.

If BHP Billiton elects not to exercise the Second Option, BHP Billiton and Peregrine will continue to advance the Project maintaining their respective 51 and 49 percent interests, and Peregrine will be responsible for funding approximately $1 million in exploration expenditures incurred under the 2010 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 program, 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 programs, 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.

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