EARLY WARNING REPORT PURSUANT TO

NATIONAL INSTRUMENT 62-103

AND THE PROVISIONS OF APPLICABLE SECURITIES LEGISLATION

1.

Name and Address of Offeror:

Eric Friedland (“Friedland”)

Suite 201 – 1250 Homer Street

Vancouver, British Columbia

V6B 1C6

2.

Designation and number or principal amount of securities and the Offeror’s securityholding percentage in the class of securities of which the Offeror acquired ownership or control in the transaction or occurrence giving rise to the obligation to file the news release, and whether it was ownership or control that was acquired in those circumstances:

Since Friedland’s last early warning report dated April 3, 2009, he has acquired deemed beneficial ownership of a total of 4,577,700 common shares of Peregrine Diamonds Ltd. (“Peregrine”). Friedland currently has deemed beneficial ownership of 22,807,839 common shares of Peregrine, representing 22.0% of the deemed outstanding common shares of Peregrine. After other treasury issuances of common shares by Peregrine, Friedland’s deemed beneficial ownership of common shares of Peregrine has increased by 1.1% from the previously reported percentage of 20.9%.

3.

Designation and number or principal amount of securities and the Offeror’s securityholding percentage in the class of securities immediately after the transaction or occurrence giving rise to the reporting obligation:

Friedland currently has deemed beneficial ownership of 22,807,839 common shares of Peregrine, representing 22.0% of the deemed outstanding common shares of Peregrine.

4.

Designation and number or principal amount of securities and the percentage of outstanding securities of the class of securities referred to in paragraph 3 above, over which

(a)

the Offeror, either alone or together with any joint actors, has ownership and control,

22,807,839 common shares, representing 22.0% of the deemed outstanding common shares of Peregrine.

(b)

the Offeror, either alone or together with any joint actors, has ownership but control is held by other persons or companies other than the Offeror or any joint actor, and

Not applicable.

(c)

the Offeror, either alone or together with any joint actors, has exclusive or shared control but does not have ownership.

Not applicable.

5.

The name of the market in which the transaction or occurrence that gave rise to the reporting obligation took place:

Of the 4,577,700 common shares of Peregrine of which Friedland has acquired deemed beneficial ownership since the last report, a total of 152,700 common shares were acquired by Friedland directly or indirectly through the Toronto Stock Exchange.

The remaining 4,425,000 common shares are issuable upon exercise of stock options granted by Peregrine to Friedland since the last report (2,825,000 optioned shares granted in April 2009 at an exercise price of $0.60 per share and 1,600,000 optioned shares granted in September 2009 at an exercise price of $1.84 per share). The option grants were subject to vesting schedules and are now vested or will vest within 60 days.

6.

The value, in Canadian dollars, of any consideration offered per security if the offeror acquired ownership of a security in the transaction or occurrence giving rise to the reporting obligation:

The 152,700 common shares of Peregrine acquired directly or indirectly by Friedland through the Toronto Stock Exchange since the last report were acquired at prices ranging from $1.70 to $2.27 per share.

No cash consideration was paid by Friedland for the stock options that are exercisable for a total of 4,425,000 common shares of Peregrine mentioned in item 5 above.

7.

Purpose of the Offeror and any joint actors in effecting the transaction or occurrence that gave rise to the reporting obligation, including any future intention to acquire ownership of, or control over, additional securities of the reporting issuer:

Common shares of Peregrine acquired by Mr. Friedland have been acquired for investment purposes.

Depending on economic and financial conditions, Friedland may acquire further common shares of Peregrine (through market or private transactions or exercises of outstanding stock options and warrants) from time to time for investment purposes.

8.

General nature and the material terms of any agreement, other than lending arrangements, with respect to securities of the reporting issuer entered into by the Offeror, or any joint actor, and the issuer of the securities or any other entity in connection with the transaction or occurrence giving rise to the reporting obligation, including agreements with respect to the acquisition, holding, disposition or voting of any of the securities:

Not applicable.

9.

Names of any joint actors in connection with the disclosure required herein:

Not applicable.

10.

In the case of a transaction or occurrence that did not take place on a stock exchange or other market that represents a published market for the securities, including an issuance from treasury, the nature and value, in Canadian dollars, of the consideration paid by the Offeror:

No cash consideration was paid by Friedland for the stock options that are exercisable for a total of 4,425,000 common shares of Peregrine mentioned in item 5 above.

11.

If applicable, a description of any change in any material fact set out in a previous report by the entity under the early warning requirements or Part 4 of National Instrument 62-103 in respect of the reporting issuer’s securities:

With respect to Friedland’s previously reported deemed beneficial ownership of 805,079 common shares of Peregrine issuable upon exercise of warrants, he has since exercised all of the warrants to acquire 805,079 common shares of Peregrine at $1.00 per share (in respect of 420,000 warrants) and $1.50 per share (in respect of 385,079 warrants) for the aggregate purchase price of $997,618.

12.

If applicable, a description of the exemption from securities legislation being relied on by the Offeror and the facts supporting that reliance.

Not applicable in respect of 4,425,000 common shares of Peregrine issuable upon exercise of stock options acquired by Friedland since the last report.

In respect of the 152,700 common shares of Peregrine acquired by Friedland directly or indirectly in stock exchange transactions, Friedland acquired the shares in reliance on the “normal course purchase exemption” from takeover bid requirements set out in section 4.1 of Multilateral Instrument 62-104. The 152,700 common shares acquired, when aggregated with other common shares of Peregrine acquired by Friedland during the prior 12-month period, did not exceed 5% of the common shares of Peregrine at the beginning of the 12-month period. During this 12-month period, there were no persons acting jointly or in concert with Friedland in respect of securities of Peregrine. The value of the consideration paid for the shares was not in excess of the market price of the common shares of Peregrine at the date of acquisition, as determined in accordance with section 1.11 of Multilateral Instrument 62-104.

DATED the 23rd day of February, 2011.

“Eric Friedland”

_____________________________

ERIC FRIEDLAND

Regards

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