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VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 21, 2009) - Peregrine Diamonds Ltd. ("Peregrine" or "the Company") (TSX:PGD) is pleased to report the first caustic fusion diamond results from drill core collected from the CH-1 kimberlite on the 9,800 square kilometre Chidliak project ("Chidliak"), Baffin Island, Nunavut, Canada. A 178.8 kilogram sample of drill core collected from a drill hole intersecting the northern portion of CH-1 (CH-1D) yielded 322 diamonds larger than the 0.075 mm sieve size, including five diamonds larger than the 0.600 mm sieve size.

The following table summarizes caustic fusion microdiamond results for the drill core sample acquired from CH-1D during the 2009 programme and samples collected from surface material at CH-1 in 2008. The analyses were performed at the Saskatchewan Research Council Geoanalytical Laboratories ("the SRC").

SUMMARY OF CAUSTIC FUSION MICRODIAMOND RESULTS FOR SAMPLES FROM THE CH-1 KIMBERLITE

*The diamond content of the samples as determined by caustic dissolution may not be representative of the overall diamond content of the CH-1 kimberlite due to a number of factors including the limited area of the kimberlite from which the surface samples were collected and the relatively small size of the samples.
**Results for surface samples reported on August 25, 2008 and October 28, 2008.

The one diamond larger than the 1.18 mm sieve size from the CH-1D sample is a .03 carat off-white, transparent octahedron.

SUMMARY OF WORK TO DATE ON THE CH-1 KIMBERLITE
The CH-1 kimberlite is interpreted as a complex, multi-phase body that may consist of three or more kimberlite lobes that together define a geophysical anomaly with an estimated surface expression of two to three hectares. The 178.8 kilogram sample from CH-1D was collected between the depths of 21 and 64 metres from one of three holes drilled this summer at CH-1 (see August 6, 2009 news release). This drill hole was collared at the northwestern edge of CH-1 and was drilled to the southeast at an inclination of 45 degrees from horizontal. The CH-1D sample consisted of magmatic kimberlite with 25 to 40 percent olivine macrocrysts up to one centimetre in size, abundant kimberlite indicator minerals and mantle xenoliths. The material in the microdiamond samples collected at surface from the CH-1A, CH-1B and CH-1C kimberlite phases in 2008 is described as follows:

• CH-1A. The 100.0 kilogram CH-1A sample consisted of magmatic kimberlite collected from an outcrop exposure measuring approximately three metres by five metres.
• CH-1B. The 94.9 kilogram CH-1B sample consisted of magmatic kimberlite boulders and cobbles collected from the surface in the vicinity of the kimberlite outcrop.
• CH-1C. The 94.0 kilogram CH-1C sample was collected from a site 20 metres from the kimberlite outcrop and was comprised of boulders of volcaniclastic kimberlite containing limestone xenoliths.

After receipt of the initial microdiamond results from CH-1 in 2008, a cumulative 2.28 tonne sample collected by hand from the CH-1A and CH-1B kimberlite phases was analyzed for diamonds larger than the 0.425 mm sieve size by caustic fusion at the SRC (see November 18, 2008 news release). The CH-1A sample was collected from the outcrop exposure described above and the CH-1B sample consisted of boulders and cobbles collected over an area representing approximately 50 percent of the estimated surface area of the kimberlite. The 2.28 tonne sample yielded 34 commercial-size diamonds larger than the 0.85 mm sieve size weighing a total of 3.55 carats. A 2.01 carat, high-quality gem diamond was recovered from the CH-1A sample. The diamond results from the mini-bulk sample are summarized in the following table.

SUMMARY OF 2008 CH-1 MINI-BULK SAMPLE DIAMOND RESULTS

*The diamond content of the samples as determined by caustic dissolution may not be representative of the overall diamond content of the CH-1 kimberlite due to a number of factors including the limited area of the kimberlite from which the surface samples were collected and the relatively small size of the samples.

The consistent feature demonstrated in all the results received thus far from CH-1 is a coarse diamond size distribution, a positive indicator of the potential for a population of large, commercial-size diamonds.

A photograph of the 2.01 carat diamond recovered from CH-1 and other images from CH-1 are available on the Company's web-site at [ http://www.pdiam.com/i/pdf/chidliak136.pdf ].

ONGOING AND FUTURE WORK AT CH-1
As reported on September 14, 2009, a 50 tonne sample was collected by hand from the discovery outcrop exposure at CH-1 this summer. The sample is scheduled to be processed by dense media separation at the SRC this quarter. It is anticipated that further core drilling will be undertaken as part of the 2010 exploration programme in an effort to better-define the size, geology and economic potential of the CH-1 kimberlite.

The SRC is an independent laboratory that is accredited by the Standards Council of Canada to the ISO/IEC Guide 25 standard for diamond recovery by caustic fusion. The CH-1D kimberlite sample was collected, sealed in secure containers and shipped to the SRC under strict chain of custody protocols supervised by senior Peregrine personnel.

Peregrine is the operator of the 2009 Chidliak exploration programme which is being fully funded by BHP Billiton. 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 incur a total of $22.3 million dollars in exploration expenditures in order to earn a 51% interest in Chidliak.

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.