Siberian Diamonds Limited

January 18, 2008 09:00 ET

Siberian Diamonds Limited: January 2008 Update

HIGHLIGHTS - Raised $2.73 million before expenses in the 4th quarter of 2007 - Encouraged by early results from 2007 exploration programs - Tripled land position to approximately 28,000km2 following grant of three new large prospective licenses - Commenced aggressive winter exploration, and new equipment integrated into operations

TORONTO, ONTARIO--(Marketwire - Jan. 18, 2008) -

THE INFORMATION CONTAINED HEREIN IS NOT FOR PUBLICATION OR DISTRIBUTION INTO THE UNITED STATES, AUSTRALIA, THE RUSSIAN FEDERATION OR JAPAN.

Paul Sobie, Chief Executive Officer of Siberian Diamond Limited (herein "SDL" or "Company", together with companies in which it has a 100% indirect interest) today reported on recent progress by the Company (which is privately owned and not listed or traded on any listed or unlisted quoted market for securities), including the following:

- SDL completed a first closing of a brokered private placement on 19 December, 2007 of 4,842,106 shares which the Company's agents Westwind Partners (UK) Limited, Westwind Partners Inc. (now Thomas Weisel Partners) and Fox-Davies Capital Limited, placed with certain investors at a price of $C0.46/share, for proceeds before expenses to the Company of $C2,227,368.84.

- SDL closed a non-brokered private placement on 15 November, 2007 with one placee for 1,086,956 shares at a price of $C 0.46/share, for proceeds before expenses to the Company of $C499,999.76

- Following the closing of the above two placings, the Company has 75,910,811 ordinary shares with voting rights with a nominal value of GBPounds Sterling 0.01 each in issue.

- Commercial sized diamonds were recovered after partial processing of small volume samples on the Verkhne-Biryusa ("VB") and Tanguy-Uda ("TU") projects.

- High-interest kimberlitic indicator minerals have been identified on the Mura ("M") project, as well as on VB and TU,

- On the VB, TU and M prospects auger sampling, geophysics and core drilling was commenced. On the Angoroi-Chonska ("AC") prospect mobilization is commencing by winter road.

- Purchased its first core drill, which is mounted on a caterpillar vehicle and mobilized it to the M project for geophysical target testing.

- Integrated a new x-ray sorter into its laboratory operations and commenced analyzing all of its concentrates recovered during exploration programs in 2006 and 2007.

- Granted three new licenses, each covering highly prospective areas with well-documented historical recoveries of diamonds in alluvial settings and kimberlitic indicator minerals.

"I am pleased to report on our corporate developments as well as encouraging exploration results consistent with our expectations", said Mr. Sobie. "The picking and analytical work is continuing on our samples, which we expect will further prioritize and direct our programs."

"SDL projects VB, TU and M benefit from well-developed infrastructure in southern Irkutsk which has allowed us to continue to work through freeze-up, and now to mount operations in areas that were inaccessible during summer. This work is a continuation of the SDL first phase programs, which are focused to complete the follow-up necessary for prioritization and testing of the airborne targets, as well as the assessment of alluvial diamond potential".

Highlights of 2007 results received thus far include:

VB Project:

At the Ingashet Area of diamond-bearing alluvial terraces, that includes the 7.46 carat stone recovered during the Soviet era:

- Two +4mm diamonds weighing 52.3 and 31.5mg (0.26 and 0.158 carats) respectively, have thus far been recovered from the coarse fraction of sample VB-LVS-01 (21.65m3), with the results from the finer -4mm fractions pending.

- The area of this sample drains from the large paleo-terraces, which SDL intends to assess for near-term alluvial potential while the large terrace complex in the area is systematically evaluated.

- Early picking results from drilling of the terraces has included samples with pyrope garnets and chrome spinels, currently being micro-probed, which with further such results will assist in determining the hard-rock source for the alluvial diamonds.

TU Project:

At the Tarma Area which includes consistent and compelling historical diamond recoveries (56 diamonds averaging 0.197 carat in 1,090m3 of manually extracted gravels in the late 1950's) over several kilometres in terraces and modern alluvium, the SDL Group has a large program in progress where:

- One +4mm diamond fragment weighing 43.7mg (0.22carats), has thus far been recovered from the coarse fraction of sample TU-SVS-045 (3.5m3), with the results from the -4mm fractions pending. The diamond is fractured and shows no sign of mechanical wear implying a very proximal source, and represents approximately 1/3 of the original crystal.

- SDL intends to assess the Tarma Area for its near-term alluvial potential.

- Completion of ground geophysical surveying of 10 high-priority targets in the area with proximal high-interest kimberlitic indicator mineral sample recoveries, for winter drill testing.

At the Kaduy Area, SDL has successfully followed up an area of historical low-order anomalous recoveries of diamonds and kimberlitic indicator minerals. A large new dispersion of high-interest kimberlitic indicator minerals has been established, including a 0.45mm angular pyrope garnet with kelyphytic surface features, which the Company believes suggests proximity to a kimberlitic source. The Company plans to continue sampling throughout the winter to prioritize its geophysical targets in this area.

M Project:

SDL has completed a large amount of sampling to cover the project and constrain the known high-interest kimberlitic indicator mineral aureole, with preliminary results including numerous samples containing hundreds of grains. Early results of probing in progress has confirmed very high-interest compositions for numerous pyropes, chromites and ilmenites. The Company has commenced core drilling of several coincident high priority geophysical targets in this area.

AC Project:

SDL has commenced preparations for mobilizing a camp, provisions and equipment to its northernmost AC prospect which is winter-road accessible. The Company plans to commence a winter work program of auger-derived heavy mineral concenctrate ("HMC") sampling to augment historical sample results, with airborne geophysics being planned for late March.

3 New Licenses:

SDL has been awarded three new licences to explore for diamonds in three areas: the "CK3 Project", the "CK2 Project" and the "E3 Project".

These licenses are large, each approximately with an area of 6,000km2, and were sought by the Company for both alluvial and hard-rock diamond potential as well as satisfying SDL's other technical and infrastructure-related selection criteria. The CK2 Project and CK3 Project are contiguous and to the north of the TU Project, and cover two large districts with historical alluvial diamond sampling results of economic interest, as well as compelling recoveries of kimberlitic indicator minerals. E3 is within northern Irkutsk closer to AC, and past work has recovered diamonds within two river systems as well as kimberlitic pyropes of high interest.

The Company intends to progress compilations on all 3 new licenses in preparation for mounting summer exploration programs.

About Siberian Diamonds Limited

Siberian Diamonds Limited is a privately incorporated exploration company that holds shares through a subsidiary in companies in Russia that hold seven exploration licenses with of a total area of approximately 28,000km2. SDL currently is the only exploration company other than ZAO Alrosa, Russia's largest diamond producer (or other companies in the ZAO Alrosa group or affiliated to it) actively exploring the highly prospective Siberian Craton. The Company's licenses are situated in the southerly Oblast of Irkutsk, where infrastructure is well developed and where early Soviet-era prospecting had recovered diamonds.

Heavy mineral concentrate (HMC) and small volume samples (SVS) are screened and pre-concentrated in the field, at washing stations at the base camps for each project. Field concentrates are shipped under secure conditions to the SDL laboratory in the City of Irkutsk for further concentration and picking by the Company's mineralogists. Auditing of the Company's laboratory performance and personal, as well as probing and interpreting grains of interest, is performed by the Institute of the Earth's Crust, Siberian Division, Russian Academy of Science. Caustic fusion of the final concentrates generated by the Company's laboratory are contracted to be carried out by the Irgiredmet Laboratory, Irkutsk, Russia, an ISO/IEC 17025-2000 and IS0 9001 accredited facility, by the state committee of the Russian Federation for Standardization and Metrology "Gosstandart" of Russia.

The Company's website is www.siberiandiamonds.ru.

Qualified Person

Paul Sobie, a registered Professional Geologist of Ontario and the Chief Executive Officer of Siberian Diamonds Limited is the Qualified Person for the Company responsible for the Quality Control and other requirements regarding the above properties as defined under the Canadian Securities Administrators' National Instrument 43-101, and the reporting of project information. Mr. Sobie has supervised the preparation of, and reviewed, the disclosure included herein in respect of the mineral projects that are material to the SDL Group.

Forward Looking Statements

This press release contains certain forward-looking statements. In certain cases, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, risks related to international operations; risks related to joint venture operations; actual results of current exploration activities; changes in project parameters as plans continue to be refined, future prices of resources; possible variations in reserves, grade or recovery rates, accidents, labour disputes and other risks of the mining industry; and delays in obtaining governmental approvals or financing or in the completion of development or construction activities. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. There can be no assurance that forward-looking 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.

Securities

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Information contained in this document is not an offer, or an invitation to make offers, sell, purchase, exchange or transfer any securities in Russia, and does not constitute an advertisement of the securities in Russia and must not be passed on to third parties or otherwise be made publicly available in Russia. The securities to which this document relates have not been and will not be registered in Russia and are not intended for "placement" or "public circulation" in Russia.

THE MATERIAL SET FORTH HEREIN IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT INTENDED, AND SHOULD NOT BE CONSTRUED, AS AN OFFER OF SECURITIES FOR SALE INTO THE UNITED STATES OR ANY OTHER JURISDICTION. THE SECURITIES OF THE COMPANY DESCRIBED HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE US SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE LAWS OF ANY STATE, AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES, EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE LAWS. THERE WILL BE NO PUBLIC OFFERING OF SECURITIES IN THE UNITED STATES.

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