Lydia Diamond Exploration of Canada Ltd.

Lydia Diamond Exploration of Canada Ltd.

December 23, 2009 19:00 ET

Lydia Diamond Exploration Closes Previously Announced Sale of the Madoc Project

TORONTO, ONTARIO--(Marketwire - Dec. 23, 2009) - Lydia Diamond Exploration of Canada Ltd. ("Lydia Diamond" or the "Company") is pleased to announce that it has closed its previously announced sale (the "Sale") of its 24,000 hectare exploration property located in Cashel, Effingham, Grimsthorpe and Tudor townships in southeastern Ontario near Madoc (the "Madoc Project") to Crown William Mining Corporation ("Crown William"). A special meeting of the shareholders of Lydia Diamond was held on December 23rd, 2009 and the Sale was approved by the shareholders. A full copy of the information circular dated November 20, 2009 relating to the special meeting can be found on

The Madoc Project was sold to Crown William in consideration for (i) assumption by Crown William of historical enforceable liabilities of Lydia Diamond in the amount of $40,495.08, (ii) agreement by Crown William that liabilities of Lydia Diamond relating to geological expenditures on the Madoc Project, Reorganization Liabilities and general and administrative expenses paid by Crown William on behalf of Lydia Diamond to arm's length parties for the purposes of the restructuring have been paid in full up to an including closing which amount was $561,340 as at September 30, 2009 with a reconciliation to be determined as at closing on December 23, 2009, and (iii) issuance by Crown William to Lydia Diamond of 10,022,943 Crown William common shares.

The common shares of Crown William issued in consideration for the Madoc Project will be distributed as a return of capital to the shareholders of Lydia Diamond when Crown William is able to take the necessary steps to qualify itself as a reporting issuer.

On December 21, 2009, the Ontario Superior Court of Justice denied a request by Emilia von Anhalt to permit her to vote the 22,315,875 shares of Lydia Diamond held by her at the December 23, 2009 shareholder meeting. Emilia von Anhalt was permitted to exercise rights of dissent, and Lydia Diamond was ordered to pay $400,000 into court as security for any fair value award. For this purpose, Crown William has agreed to fund $400,000 to Lydia Diamond to make this payment. If Lydia Diamond determines that the $400,000 advance is not sufficient to meet the claims of dissenting shareholders, Crown William and Lydia Diamond shall consider other options to raise the necessary funds, including a further advance by Crown William or a sale by Lydia of some of the Crown William common shares acquired pursuant to the Sale. The advance shall be repaid by Lydia Diamond allowing the repurchase of that number of Crown William common shares that dissenting shareholders would have received on the planned distribution as a return of capital, at a redemption price equal to the fair value determined under the dissent process. Further announcements will be made on the status of dissent proceedings which have not yet formally commenced.

This news release contains forward-looking statements. These statements are based on information currently available to the Company and the Company provides no assurance that actual results will meet management's expectations. Forward-looking statements include estimates and statements that describe the Company's future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Forward-looking statements may be identified by such terms as "believes", "anticipates", "expects", "estimates", "may", "could", "would", "will", or "plan". Since forward-looking statements are based on assumptions and address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results relating to, among other things, results of exploration, project development, reclamation and capital costs of the Company's mineral properties, and the Company's financial condition and prospects, could differ materially from those currently anticipated in such statements for many reasons such as: changes in general economic conditions and conditions in the financial markets; changes in demand and prices for minerals; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; technological and operational difficulties encountered in connection with the activities of the Company; and other matters discussed in this news release. This list is not exhaustive of the factors that may affect any of the Company's forward-looking statements. These and other factors should be considered carefully and readers should not place undue reliance on the Company's forward-looking statements. The Company does not undertake to update any forward-looking statement that may be made from time to time by the Company or on its behalf, except in accordance with applicable securities laws.

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