March 6, 2017 PDF version

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VANCOUVER, CANADA - Peregrine Diamonds Ltd. (TSX:PGD) (“Peregrine” or “the Company”) is pleased to announce that it has completed an internal concept study of a potential open-pit plus underground mining development at its 100% owned CH-6 kimberlite pipe at the Chidliak Diamond Project near Iqaluit, Nunavut, Canada. The study was completed in consultation with JDS Energy & Mining Inc. (“JDS”). The study has concluded there is the potential to substantially enhance the economics of the Chidliak Project by incorporating an underground mining operation below 260 metres of depth at CH-6, the current bottom of the open pit Inferred Resource defined in the August 2016 Preliminary Economic Assessment (“PEA”) (see below). As a result of this conceptual study, a drill program targeting this deeper kimberlite is planned to commence in June 2017 to expand the resource to depths up to 500 metres below surface. In addition to the resource expansion drilling, geotechnical work and environmental studies in the Chidliak Project area and proposed transportation corridor will continue.

CH-6 PEA AND OPEN PIT PLUS UNDERGROUND CONCEPT STUDY

JDS completed a positive preliminary economic assessment titled “Preliminary Economic Assessment Technical Report of the Chidliak Project, Nunavut, Canada” dated August 19, 2016 on a Phase-One open-pit only mining operation of the CH-6 and CH-7 kimberlite pipes.

The economics of a development at Chidliak are robust. Highlights of the 2016 Chidliak Phase-One, Open-Pit, Diamond Development PEA base case are:

• Pre-tax Net Present Value (NPV) of C$743.7 million, at a 7.5% discount rate and a pre-tax Internal Rate of Return (IRR) of 38.1%.

• After-tax NPV of C$471.2 million, at a 7.5% discount rate and an after-tax IRR of 29.8%.

• Total Life of Mine (LOM) pre-tax Free Cash Flow of C$1.31 billion.

• After-tax payback period of two years, LOM of ten years.

• Operating margin of 72%.

• LOM average production rate of 1.2 million carats per year, peaking at 1.8 million carats per year.

• Estimated pre-production capital requirement of approximately C$434.9 million, including C$56.7 million in contingency.

The PEA is preliminary in nature and includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them to be categorized as Mineral Reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. There is no certainty that the PEA will be realized. All mine plan tonnes in the PEA are Inferred Mineral Resources.

The PEA concluded that the project was of sufficient merit to proceed to the Preliminary Feasibility Study (“PFS”) stage. The key components of the recommended work program include:

• Core drilling at CH-6 to better quantify the target for further exploration (“TFFE”) and possibly convert that material to a Mineral Resource.

• Bulk sampling of CH-6 to advance the resource to the Indicated level.

• Engineering and geotechnical programs to better quantify process requirements and refine pit design.

• Continued environmental monitoring and development of permitting management plans.

In December 2016, the Company engaged JDS to complete an internal, concept-level study on the project economic uplift that could be realized by developing the CH-6 kimberlite to a depth of 500 metres as a combined open-pit plus underground mining operation. The results of this study are excellent and have significantly changed the specifics for the 2017 work program. The study clearly demonstrates the benefit of focusing the 2017 program on proving the resource potential at CH-6 below 260 metres, the current bottom of the Inferred Resource in the PEA.

As a “concept study” does not conform with NI 43-101 requirements, the study, and its technical and economic details, cannot be publicly disclosed

CURRENT CH-6 TFFE

On April 7, 2016, the Company released updated independent estimates of TFFE for the CH-6 kimberlite below 260 metres of depth as shown in Table 1 below.

TABLE 1: CH-6 KIMBERLITE TFFE BELOW 260 METRES

Domain	Depth (metres below surface)	Low-case