Encouraging Micro-Diamond Results Received from North-Eastern Lobe of DO-27; 0.59 and 0.18 Carat Diamonds Found in NQ Diameter (47mm) Core Holes

March 16, 2006 PDF version
March 16, 2006 - Vancouver, Canada - Peregrine Diamonds Ltd. (“Peregrine”) (TSX-V: PGD) is pleased to announce the results of caustic fusion analysis of micro-diamond samples by the Saskatchewan Research Council (“SRC”) of the seven NQ diameter core holes drilled into the north-eastern lobe of the DO-27 kimberlite, WO Diamond Project, NWT, Canada, last Fall.

The north-eastern lobe of DO-27 was subject to an underground bulk sample by Kennecott Canada Exploration Inc. (“KCEI”) in 1994 and results from that bulk sample, which was largely from a basal volcaniclastic unit, graded 0.36 carats/tonne. Peregrine’s successful 2005 mini-bulk sample of the Cr-diopside rich pyroclastic phase of the main vent of DO-27 (“PK”), which is geologically distinct to the volcaniclastic kimberlites in the north-eastern lobe and constitutes the majority of the kimberlite at DO-27, graded 0.98 carats/tonne.

The geology of the north-eastern lobe of DO-27 is more complex than the main vent and consists of a thin, discontinuous, upper volcaniclastic unit (“Upper VK”), a pyroclastic unit (“PK”) that is contiguous with the PK of the main vent, and a highly variable, volcaniclastic unit (“Lower VK”) that can be correlated as a package, but contains many layers that cannot be easily correlated from hole to hole. The Lower VK is underlain by volcaniclastic microbreccia and hypabyssal rocks. Geological observations from core drilling and these latest micro-diamond results further substantiate that the Upper and Lower VK units of the north-eastern lobe of DO-27 are geologically distinct from the pyroclastic unit of the main vent. The various sub-units within the Lower VK (referred to as Lower VK-1 through Lower VK-5) reveal micro-diamond counts that are both higher and lower than those from the PK unit, implying that different horizons within this Lower VK unit have different diamond contents. Sub-unit Lower VK-1 is a black, olivine, macrocrystal volcaniclastic kimberlite which is similar to the kimberlite described by KCEI for their underground adit, which further suggests that KCEI’s 1994 bulk sample may have sampled one of the lower grade horizons.

The fact that relatively large diamonds (0.59 and 0.18 carats) were obtained from NQ core drill intercepts in the Lower VK unit of the north-eastern lobe indicates good potential for the presence of large stones within the north-eastern lobe. Also, the presence of horizons within the north-eastern lobe with micro-diamond contents equal or better than those seen in the main vent suggests that portions of the north-eastern lobe could grade higher than the main vent.

The PK and Lower VK units are the two volumetrically most significant units in the north-eastern lobe and comprise most of the samples submitted for micro-diamond analysis. The volcaniclastic microbreccia and the hypabyssal breccia were not sampled due to the volumetric insignificance and granitic dilution with these particular units. Material from the seven core holes have been combined by geological unit to give a better understanding of the micro-diamond distribution within each geological unit.

Micro-diamond results for the seven core holes drilled into the north-eastern lobe of DO-27 are as follows:
Upper VK and Main PK
Unit       Upper VK             PK (upper horizon)   PK (lower horizon)
-----------------------------   ------------------   ------------------
Lower      Total    Total       Total    Total       Total    Total
Sieve      Stones   Carats      Stones   Carats      Stones   Carats
-----------------------------   ------------------   ------------------
 +4.75 mm     0            0       0            0       0            0
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