Archangel Diamond Corporation
TSX VENTURE : AAD.H

Archangel Diamond Corporation

December 22, 2009 16:41 ET

Archangel Diamond Corporation (AAD.H) Obtains Confirmation Order from United States Bankruptcy Court

TORONTO, ONTARIO--(Marketwire - Dec. 22, 2009) - Archangel Diamond Corporation ("Archangel" or the "Corporation") (TSX VENTURE:AAD.H) announces that on December 17, 2009, the United States Bankruptcy Court for the District of Colorado (the "US Bankruptcy Court") entered its order (the "Order") confirming Archangel's Amended Plan of Liquidation (the "Plan"). A copy of the Plan and Order may be viewed with other Archangel disclosure documents through the Internet on the Canadian System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com.

An involuntary Chapter 7 liquidation bankruptcy proceeding was initiated against the Corporation in the State of Colorado pursuant to the United States Bankruptcy Code on June 26, 2009. The Corporation converted the Chapter 7 proceeding to a Chapter 11 reorganization proceeding on September 3, 2009, and it filed its Plan of Liquidation on the same day. The Corporation obtained debtor-in-possession financing from Firebird Global Master Fund, Ltd. The Corporation filed the Plan on November 4, 2009, and distributed the disclosure statement for the Plan and balloting materials on November 5, 2009. Votes to accept or reject the Plan received prior to the December 3, 2009 balloting deadline were counted. One hundred percent of those creditors voting and 100% of those equity holders voting voted to accept the Plan. The confirmation hearing on the Plan was held on December 11, 2009.

The Plan transfers the assets of the Corporation (being substantially the Corporation's legal proceedings against AGD, LUKoil and certain related parties) to a trust (the "Liquidating Trust") of which the Corporation's creditors as of June 26, 2009 and the Corporation's equity holders as of September 3, 2009 are beneficiaries, and otherwise sets forth the treatment of such creditors and equity holders. The Order approves the treatment of creditors and equity holders of the Corporation and establishes the binding legal effect of the Plan. The claims of creditors as against the Corporation were extinguished and are now reflected as interests in the Liquidating Trust. The Corporation intends to apply for a recognition order (the "Recognition Order") from the Ontario Superior Court of Justice which will domesticate the Order and its effect in Canada. As a result, the Corporation will have no assets, nor liabilities, nor any business or undertaking. Subsequently, the Corporation intends to apply to the NEX Board of the TSX Venture Exchange for the voluntary delisting of its common shares and will call a special meeting of Archangel's shareholders, anticipated to be held in the first quarter of 2010, to approve the delisting and the voluntary filing of Articles of Dissolution of the Corporation. Full particulars concerning the special business to be considered at the special meeting will be contained in the Corporation's management information circular which will be mailed in late January, 2010.

CAUTIONARY NOTE TO SHAREHOLDERS CONCERNING FORWARD LOOKING STATEMENTS AND FINANCIAL PROJECTIONS - This news release contains "forward-looking statements", within the meaning of applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to the outcome of future negotiations, completion of the Transaction, execution of definitive agreements, exercise of future call rights, success of financing activities, identification or upgrade of mineral resources, requirements for additional capital, government regulation, results of future diamond exploration, results of diamond marketing, changes in legal requirements, changes in the political environment, environmental liabilities and title disputes. Generally, these forward - looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", o r "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual outcomes, results, level of activity, performance or achievements of Archangel Diamond Corporation to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: risks described in the above news release; those risks set out in Archangel's disclosure documents and its annual, interim management discussion and analysis and annual reports. Although Archangel has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Archangel does not undertake to update any forward-looking statements or financial projections, except in accordance with applicable securities laws.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

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