Peregrine Announces Exercise of Earn-In Rights at Chidliak, Baffin Island

• Press Release
• Source: Peregrine Diamonds Ltd.
• On 8:32 am EST, Monday November 24, 2008

VANCOUVER, BRITISH COLUMBIA--(MARKET WIRE)--Nov 24, 2008 -- Peregrine Diamonds Ltd. ("Peregrine" or "the Company") (Toronto:PGD.TO - News) is pleased to report that BHP Billiton has elected to exercise its earn-in rights for the 9,800 square kilometre Chidliak property ("Chidliak" or "the Property"), Baffin Island, Nunavut, Canada. In 2005, Peregrine entered into an exploration agreement with BHP Billiton regarding a diamond exploration concept for southern Baffin Island. Under the terms of the agreement, BHP Billiton can earn a 51 percent interest in Chidliak by funding five times the exploration expenditures that have been incurred by Peregrine, over a period of five years, with minimum annual expenditures of $5 million. The agreement calls for BHP Billiton to incur a total of $22.3 million in future exploration expenditures on the Property in order to earn a 51 percent interest, with a minimum commitment of $8.9 million.

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Once BHP Billiton has earned its initial 51 percent interest, it will then have a one-time option to earn an additional seven percent (7%) interest in the Property by sole-funding the complete costs of a bankable feasibility study. If this option is exercised, the resulting ownership interests in any potential mine would be BHP Billiton 58 percent and Peregrine 42 percent. If BHP Billiton does not elect to exercise the second option, BHP Billiton and Peregrine will advance the project maintaining their respective 51 percent and 49 percent interests. If BHP Billiton elects to exercise this second option but fails to complete it as required by the agreement, Peregrine, under certain conditions, will have the right to complete the bankable feasibility study to earn a 58 percent interest in the Property. Peregrine can market its share of any diamond production after the first three years of commercial production where BHP Billiton owns a 58 percent interest in the Property as a result of sole-funding a bankable feasibility study. Peregrine has the marketing rights to its share of diamonds at the commencement of production where Peregrine has funded either its pro-rata share or the full costs of completing the feasibility study.

Peregrine and BHP Billiton are currently finalizing the details of an expanded and aggressive 2009 Chidliak exploration program that will be focused on further evaluation of the three known kimberlites, exploration to discover additional diamondiferous kimberlites, and validation of over 170 known kimberlite-type geophysical anomalies. Peregrine will continue to act as operator of the Chidliak exploration program, however, BHP Billiton is entitled to become the operator at any time while it is sole-funding operations.

Three diamondiferous kimberlites were discovered by Peregrine at Chidliak in 2008, including CH-1 which is estimated at six hectares in size and is exposed at surface. On November 18, 2008, the Company announced that a 2.28 tonne sample collected from CH-1 returned a diamond content of 1.56 carats per tonne and that a 2.01 carat, gem quality, octahedron diamond was recovered from the sample.

Eric Friedland, Peregrine's CEO stated, "We are pleased that BHP Billiton, the principal owner of Canada's Ekati(TM) Diamond Mine, is electing to exercise their earn-in rights so early in Chidliak's exploration cycle and we look forward to working closely with them in expeditiously identifying economic kimberlites and advancing them to commercial diamond production. BHP Billiton's diamond exploration, evaluation and production experience will be put to full use as we jointly and rapidly advance this project starting with the planned 2009 exploration program, fully funded by BHP Billiton, beginning next spring."

     Contacts:
     Peregrine Diamonds Ltd.
     Brooke Clements
     President
     (604) 408-8880
      
     Peregrine Diamonds Ltd.
     Eric Friedland
     CEO
     (604) 408-8880
      
     Peregrine Diamonds Ltd.
     Investor Relations
     (604) 408-8880
     (604) 408-8881 (FAX)
     Email: investorrelations@pdiam.com
     Website: http://www.pdiam.com