Peregrine Diamonds Ltd.

March 08, 2016

Peregrine Announces CH-7 Independent Diamond Valuation Results Average Base Model Price is US$114 per Carat 5.33 Carat Diamond Valued at US$3,106 per Carat

Peregrine Diamonds Ltd. ("Peregrine" or "the Company") (TSX:PGD) is pleased to announce the results of an independent diamond valuation for an aggregate 735.75 carat parcel of commercial-size (+1.18 mm square mesh) diamonds recovered from five geological units of the CH-7 kimberlite pipe at the Company's 100 percent owned Chidliak Diamond Project, Nunavut, Canada. The current average price was US$100 per carat, and ranged from US$73 to US$154 per carat across parcels from the five geological units represented. The modelled average price ranged from a low of US$94 per carat to a high of US$155 per carat, with a base modelled price of US$114 per carat. The eight highest value diamonds ranged in size from 1.35 carats to 5.33 carats, weighed 21.58 carats in total, and had a current average price valuation of US$1,619 per carat.

The diamond valuation was undertaken in Antwerp, Belgium by WWW International Diamond Consultants ("WWW"), an international diamond valuation and consultancy company. Diamond prices were determined using their February 1, 2016 price book and their proprietary price modelling techniques which predict the average price per carat in a mine production scenario. Through its partnership in Diamonds International Canada Ltd., WWW performs the Canadian federal and provincial government diamond valuations for producing diamond mines in Canada and has been working with Canadian diamond production since 1998.

Photos of the valued diamonds from CH-7 are available at http://www.pdiam.com/s/PG_2015-CH-7-bulk.asp.

Mr. Neil Buxton, responsible for geostatistical modelling at WWW stated "based on our analysis of the parcel, WWW believes that if CH-7 were in production in the current diamond market, it is unlikely that the average price would be lower than the low average modelled price. It is equally important to understand that the high average modelled price does not represent a maximum price and that the ultimate diamond price could be higher than US$155 per carat. These results need to be confirmed with a larger sample."

Mr. Tom Peregoodoff, Peregrine's President and CEO stated "This result represents the successful culmination of the 2015 Resource Development Program at Chidliak and is further confirmation that Chidliak is Canada's highest potential undeveloped diamond resource. The diamond valuations from CH-7 provided by WWW will support the maiden CH-7 resource statement expected this month and, together with the revised resource at CH-6, will form the foundation of the independent Preliminary Economic Assessment of a Phase 1 Diamond Mine expected this June."

CH-7 DIAMOND VALUATION
As reported on January 12, 2016, Peregrine recovered an aggregate 717.65 carat parcel of commercial-size (+1.18 mm) diamonds from 814.0 dry tonnes extracted by large diameter reverse-circulation drilling of the KIM-2, KIM-3, KIM-4 and KIM-5 geological units in the CH-7 kimberlite. The diamonds were shipped to Antwerp in January 2016, and were accompanied by a previously unvalued 47.29 carat parcel obtained in 2010 by excavating 47.2 dry tonnes of the KIM-1 geological unit of CH-7 from surface. The CH-7 diamonds were deep-cleaned by acid boiling and sized to the +3 DTC sieve class in Antwerp, resulting in an aggregate 735.75 carat commercial-sized parcel for valuation.

WWW determined current market values ranging from US$73 to US$154 per carat for five parcels ranging from 46.01 carats to 306.37 carats in weight, with each parcel representing one of the five geological units at CH-7. The average current market value of all diamonds examined was US$100 per carat.

WWW determined the modelled prices for the parcel of +3 DTC size diamonds from CH-7 using proprietary statistical methods that predict the proportion and price of each size class of diamonds that may be possible in potential future run of mine production. Data used for the model included diamond size frequency distribution, market prices for each size class, and estimated market prices for larger diamonds that would be recovered in a production scenario but were not fully represented in this diamond parcel.

For both market prices and modelled prices, WWW used its most current price book of February 1, 2016. This price book reflects the current diamond market prices.

SUMMARY OF CH-7 KIMBERLITE DIAMOND VALUATION*

WWW recommend that their US$114 per carat base model price be used for base case diamond valuation for CH-7 as part of the Company's pending Preliminary Economic Assessment of a Phase 1 Diamond Mine at Chidliak. WWW provide low and high model prices to support informed, objective examination of price sensitivities when in a realistic mining scenario.

The eight highest value diamonds ranged in size from 1.35 carats to 5.33 carats, weighed 21.58 carats in total and had an average current market value of US$1619 per carat. They are described as follows:

• From KIM-4: A 5.33 carat sawable, white/colourless octahedron: US$16,555 (US$3,106 per carat)
• From KIM-3: A 5.01 carat makeable octahedron: US$6,216 (US$1,241 per carat)
• From KIM-2: A 2.00 carat sawable octahedron: US$2,729 (US$1,364 per carat)
• From KIM-1: A 2.18 carat sawable octahedron with low fluorescence: US$2,479 (US$1,137 per carat)
• From KIM-2: A 2.03 carat sawable octahedron: US$2,308 (US$1,137 per carat)
• From KIM-2: A 2.28 carat makeable octahedron with low flourescence: US$1,995 (US$875 per carat)
• From KIM-2: A 1.35 carat sawable octahedron: US$1,654 (US$1,225 per carat)
• From KIM-2: A 1.40 carat sawable octahedron with visible impact mark: US$998 (US$ 713 per carat)

WWW further stated that "The overall parcel valued by WWW presented well in terms of quality, colour and shape. Around 25-30 percent of the diamonds were classified as white gem goods which attract the highest prices. There was very little boart present and brown diamonds made up only 25-30 percent of the parcel. Fluorescence is another issue which can affect value, particularly that of the gem white goods. WWW therefore tested several gem, white goods across various sizes from the parcel and although some light fluorescence was present, very few stones showed strong fluorescence".

The entire diamond valuation was monitored by Dr. Jennifer Pell, Peregrine's Chief Geoscientist and Qualified Person for diamond valuations.

IMPACT OF BREAKAGE ON CH-7 DIAMOND VALUATION
As reported by the Company on January 12th, 2016, a high level of diamond breakage was observed in the CH-7 diamond parcel during diamond recovery and sorting. It was further noted that the impact of this observed breakage on the diamond parcel valuation would be taken into account during diamond value modelling.

During the CH-7 diamond breakage analysis completed by Dr. Tom McCandless, fragments of seven high quality white to off-white diamonds were partially reconstructed as whole diamonds that would have occurred in the 3 carat size class. The absence of these seven large stones negatively impacted the US$100 per carat average current market value assessed by WWW for CH-7 diamonds.

WWW has over many years developed and refined proprietary, value-modelling techniques that were applied to obtain mining-scenario values for the diamonds from CH-7. WWW concluded that there were sufficient unbroken diamonds within each size category to allow for price modelling of the diamond parcels. This modelling also took into account the absence of diamonds lost due to breakage, such that the model values tabulated above represent the whole-stone profile that would be expected in a present-day mining scenario.

2016 DIAMOND RESOURCE DEVELOPMENT PROGRAM UPDATE
The development of a revised Inferred Mineral Resource Statement for CH-6 and CH-7, incorporating the 2016 results, is progressing. As previously reported November 17, 2015, the CH-6 microdiamond results support continuity of the 2.58 carat per tonne ("cpt") grade and the potential to add an additional 1 million to 1.2 million tonnes, or an additional 2.5 million to 3.1 million carats, to the existing 8.57 million carat Inferred Resource at CH-6 that occurs shallower than 250 metres of depth. This tonnage is currently considered as a Target For Further Exploration ("TFFE"), which is conceptual in nature and it is uncertain whether the 2016 Diamond Resource Development Program will result in this being delineated as a Mineral Resource.

The development of a maiden Inferred Resource statement for CH-7, incorporating the bulk sample and diamond valuation results, together with the 2015 microdiamond results reported on November 17, 2015, will commence immediately. The CH-7 kimberlite, located approximately 15 kilometres southeast of CH-6, has a surface expression of approximately one hectare. A TFFE of 3.72 million to 6.1 million tonnes shallower than 290 metres of depth has previously been reported for CH-7. This TFFE is conceptual in nature and it is uncertain whether the 2016 Diamond Resource Development Program will result in this TFFE being delineated as a Mineral Resource.

The Phase 1 Chidliak diamond resource will comprise the updated Inferred Resource statement for CH-6, and the maiden Inferred Resource statement for CH-7. The Phase 1 diamond resource statement is expected this month and will be included in a planned, independent Preliminary Economic Assessment ("PEA"), scheduled for June, 2016.

Dr. Jennifer Pell, Professional Geologist and Peregrine's Chief Geoscientist was Peregrine's internal Qualified Person for the diamond valuation. Dr. Tom McCandless, a Professional Geologist and an independent consultant to the diamond industry, is Peregrine's independent, external Qualified Person for diamond breakage analysis. Dr. Herman Grütter, Peregrine's Vice President, Technical Services, is a Qualified Person and is responsible for the design of the Diamond Resource Development Program at Chidliak.

Dr. Pell, Dr. McCandless, and Dr. Herman Grütter have reviewed this release and approve of its contents