Sanatana Diamonds Inc.
AIM : SAN

Sanatana Diamonds Inc.

May 16, 2006 09:37 ET

Sanatana Announces Completion of $12.5 Million Flow-Through Share Offering

TORONTO, ONTARIO--(CCNMatthews - May 16, 2006) - Sanatana Diamonds Inc. ("Sanatana") (AIM:SAN) is pleased to announce the completion of its public offering of 7,142,857 flow-through common shares at a price of $1.75 per share for gross proceeds of $12.5 million through Canaccord Capital Corporation ("Canaccord"), as agent. Proceeds of this public offering will be used for exploration programs on Sanatana's Mackenzie Diamond Project.

In consideration for services rendered in connection with this public offering, Sanatana has paid Canaccord a cash commission equal to 6% of the gross proceeds, granted agent's warrants to acquire up to 428,571 non-flow-through common shares at an exercise price of $1.75 per share for a period of up to 24 months, issued 100,000 non flow-through common shares to Canaccord at an issue price of $1.75 per share, and paid Canaccord's reasonable expenses in connection with the public offering as well as an administration fee of $7,500.

Sanatana is a Canadian diamond exploration company with a total of nearly 16 million acres in its Mackenzie Diamond Project area in the Northwest Territories and Nunavut. Sanatana is listed on the London AIM market under the trading symbol "SAN".

Further detailed disclosure of this public offering is available through SEDAR at www.sedar.com. For further information about Sanatana, please visit Sanatana's website at www.sanatanadiamonds.com or e-mail investor@sanatanadiamonds.com.

Shares Outstanding: 40,849,651

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy of this news release.

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