Peregrine Announces Maiden Inferred Mineral Resource of 4.23 Million Carats in 5 Million Tonnes for the Top 240 Metres of the CH-7 Kimberlite

VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 5, 2016) - Peregrine Diamonds Ltd. ("Peregrine" or "the Company") (TSX:PGD) is pleased to announce a maiden Inferred Mineral Resource estimate for the CH-7 kimberlite pipe at the Company's 100 percent owned Chidliak Diamond Project, Nunavut, Canada. Key elements of the announcement are:

• An Inferred Mineral Resource of 4.23 million carats of diamonds in 4.99 million tonnes of CH-7 kimberlite, to a depth of 240 metres
• Overall average grade of 0.85 carats per tonne
• A base model average diamond price of US$114 per carat with a modelled price range between US$94 and US$155 per carat as determined by WWW International Diamond Consultants ("WWW") in February 2016

Mr. Tom Peregoodoff, Peregrine's President and CEO said, "The resource we are announcing today is the culmination of the 2015 Diamond Resource Development Program at Chidliak. This program has successfully defined a significant Inferred Mineral Resource of over 15 million carats at Chidliak contained within the CH-6 and CH-7 kimberlites in the top 260 metres and 240 metres respectively and both which, importantly, remain open vertically at depth. This resource provides a firm foundation upon which the Preliminary Economic Assessment of a Phase 1 Diamond Mine will be developed. The Peregrine team have once again demonstrated the tremendous value of the Chidliak project and we all look forward to publishing the outcomes from this economic assessment when they become available next month."

CH-7 INFERRED MINERAL RESOURCE AND TFFE ESTIMATE

The CH-7 kimberlite was discovered in July 2009, has a surface area of approximately one hectare. CH-7 is located some 15 kilometres southeast of the CH-6 kimberlite for which the Company released an updated Inferred Mineral Resource estimate of 11.39 million carats of diamond in 4.46 million tonnes, with an average grade of 2.45 carats per tonne, in the top 260 metres on April 7^th, 2016. The 2014 and 2015 resource development program for the CH-7 kimberlite was comprised of 1,968 metres of core drilling in 11 holes, 585 metres of narrow-diameter reverse-circulation ("RC") drilling in 36 surficial delineation holes, 1,212 metres of large-diameter RC drilling in six holes that extracted 814 dry tonnes of kimberlite, and the collection of 3,585 kg of microdiamond samples, together with requisite geological logging and data collection. Key results for the CH-7 pipe include diamond grades for large diameter drill samples (stated at a commercial grade bottom cut-off of 1.18 mm) ranging from 0.76 to 1.31 carats per tonne for major geological units (see January 12, 2016 news release), and a base model average diamond price of US$114 per carat, ranging up to a high model average price of US$155 per carat for 735.75 carats valued by WWW (see March 8, 2016 news release).

Mineral Services Canada Inc. ("Mineral Services"), who provided guidance on the 2015 resource development work at CH-7, recently completed a comprehensive review of all geological, microdiamond and bulk sampling results and have estimated a maiden Inferred Mineral Resource for the CH-7 kimberlite as provided in the following table.

NI 43-101 standards and Canadian Institute of Mining and Metallurgy guidelines stipulate that a Mineral Resource needs to have a "reasonable prospect of economic extraction". JDS Energy and Mining Inc. ("JDS") have created first-order Whittle open pits to 240 metre depth based on the CH-7 Inferred Resource and have integrated appropriate revenue models for the CH-7 kimberlite. JDS concludes that the CH-7 Inferred Mineral Resource satisfies the "reasonable prospect of economic extraction" criterion.

The Company announced an initial Target For Further Exploration ("TFFE") of 2.75 to 3.97 million tonnes for the CH-7 kimberlite on May 7^th, 2014 that was updated to a TFFE range of 3.72 to 6.01 million tonnes on January 26^th, 2015. The resource at CH-7 has converted a substantial portion of this TFFE to Inferred Mineral Resource. The TFFE now estimated for the CH-7 pipe between 240 and 320 metres depth below surface is tabulated below. The potential quantity of the TFFE is conceptual in nature. Insufficient exploration has been completed to delineate any portion of the CH-7 TFFE as a mineral resource and it is uncertain if further exploration will result in conversion of the TFFE to a mineral resource.

PRELIMINARY ECONOMIC ASSESSMENT

The Preliminary Economic Assessment of a Phase 1 Diamond Mine ("the PEA") based on the combined CH-6 and CH-7 Inferred Mineral Resource of 15.62 million carats contained in 9.63 million tonnes of kimberlite is being completed by JDS with input from SRK Consulting Canada on geotechnical, infrastructure and tailings management.

JDS is a specialized, private mineral engineering, consulting and construction company focused on adding value to mineral projects with fit-for-purpose designs and exceptional execution. The JDS team has a long history of northern Canadian and diamond experience including the current construction of the Gahcho Kue diamond mine and the Silvertip silver and base-metals mine.

The PEA is well advanced, and results are expected in late June, 2016 as previously announced.

QUALIFIED PERSONS

The CH-7 Inferred Mineral Resource estimate was prepared by Mineral Services Canada Inc. under the supervision of Dr Tom Nowicki. Dr. Nowicki is a Professional Geologist and an independent, external Qualified Person and a consultant to Peregrine. Mr. Dino Pilotto of JDS Energy and Mining Inc. is a Professional Engineer and an independent, external Qualified Person that consults to Peregrine.

Dr. Nowicki and Mr. Pilotto have reviewed this release and approve of its' contents.

ABOUT PEREGRINE DIAMONDS

Peregrine Diamonds is a TSX listed diamond exploration and development company with assets located in northern Canada and Botswana.

Peregrine Diamonds core asset is its' 100 percent-owned, 513,249 hectare Chidliak project, located 120 kilometres from Iqaluit, the capital of Nunavut where 71 kimberlites have been discovered to date with eight being potentially economic. An Inferred Mineral Resource of 11.39 million carats in 4.64 million tonnes of kimberlite at an average grade of 2.45 carats per tonne has been defined for a portion of the CH-6 kimberlite. In addition, a Target for Further Exploration ("TFFE") of 2.34 to 3.75 million tonnes of kimberlite to a depth of 380 metres below surface has been identified at CH-6. An independent diamond valuation by WWW International Diamond Consultants, of a 1,013 carat parcel of diamonds from CH-6 returned an average market price of US$213 per carat and modeled prices that range from a minimum of US$162 per carat to a high of US$236 per carat, with a base model price of US$188 per carat (all using the February 24, 2014 price book). An Inferred Mineral Resource of 4.23 million carats in 4.99 million tonnes of kimberlite at an average grade of 0.85 carats per tonne has been defined for a portion of the CH-7 kimberlite. In addition, TFFE of 0.90 to 2.36 million tonnes for a depth range of 240-320 metres has been estimated for the CH-7 kimberlite. An independent diamond valuation by WWW International Diamond Consultants, of a 735.75 carat parcel of diamonds from CH-7 returned an average market price of US$100 per carat and modelled prices that ranged from a minimum of US$94 per carat to a high of US$155 per carat, with a base model price of US$114 per carat (all using the February 1, 2016 price book). A TFFE of 1.27 to 3.19 million tonnes to 250 metres depth has been estimated for the CH-44 kimberlite pipe. The TFFE's identified above are conceptual in nature and are not Mineral Resources. It is uncertain whether further exploration will result in any of these tonnages being delineated as Mineral Resources.

Peregrine Diamonds controls eleven diamond prospecting licenses in Botswana that cover 661,330 hectares.

Peregrine Diamonds also controls the 8,493 hectare Lac de Gras project in the Northwest Territories, located approximately 27 kilometres from the Diavik Diamond Mine. The nine hectare 72.1%-owned DO-27 kimberlite, located at Lac de Gras, hosts an Indicated Mineral Resource of 18.2 million carats of diamonds in 19.5 million tonnes of kimberlite at a grade of 0.94 carats per tonne and it is open at depth.

For information on data verification, exploration information and resource estimation procedures see the technical reports entitled, "2015 Technical Report for the Chidliak Project, 66° 21' 43" W, 64° 28' 26" N Baffin Region, Nunavut" dated February 23, 2015, and "Peregrine Diamonds Ltd. Lac de Gras Project Northwest Territories, Canada NI 43-101 Technical Report" dated July 15, 2014, both of which are available on SEDAR and the Company's website.

FORWARD-LOOKING STATEMENTS

This news release contains forward-looking statements within the meaning of Canadian securities legislation. 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 proposed exploration and development programs, funding availability, anticipated exploration results, grade of diamonds and tonnage of material, resource estimates, anticipated diamond valuations 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 made based upon certain assumptions by the Company and other important factors that, if untrue, could cause the actual results, performances or achievements of the Company to be materially different from future results, performances or achievements expressed or implied by such statements. Such statements and information are based on numerous assumptions regarding present and future business strategies and the environment in which the Company will operate in the future, including the price of diamonds, anticipated costs and ability to achieve goals. Certain important factors that could cause actual results, performances or achievements to differ materially from those in the forward-looking statements include, but are not limited to: receipt of regulatory approvals; anticipated timelines for community consultations and the impact of those consultations on the regulatory approval process; market prices for rough diamonds and the potential impact on the Chidliak Project; and future exploration plans and objectives.

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 availability and cost of funds, timing and content of work programs, results of exploration activities, interpretation of drilling results and other geological data, risks relating to variations in the diamond grade and kimberlite lithologies; variations in rates of recovery and breakage; estimates of grade and quality of diamonds, variations in diamond valuations and future diamond prices; the state of world diamond markets, reliability of mineral property titles, changes to regulations affecting the Company's activities, delays in obtaining or failure to obtain required project approvals, operational and infrastructure risk and other risks involved in the diamond exploration and development 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.