October 01, 2007 11:00 ET

Update on Proposed Takeover Bid for Great Western Diamonds Corp. by Vaaldiam Resources Ltd.

SASKATOON, SASKATCHEWAN--(Marketwire - Oct. 1, 2007) -


Great Western Diamonds Corp. ("GWD" or the "Company") (TSX VENTURE:GWD) is pleased to provide an update on the status of the previously disclosed (see press release dated July 3, 2007) proposed takeover bid by Vaaldiam Resources Ltd. ("Vaaldiam") under which Vaaldiam will offer to acquire all of the outstanding shares of GWD for shares of Vaaldiam at an exchange ratio of 0.45 of a Vaaldiam share for each share of GWD (the "Offer"). Vaaldiam is also proposing to acquire all of the shares of diamond producer Elkedra Diamonds NL ("Elkedra") pursuant to a court approved scheme of arrangement under the laws of Australia. If the Elkedra transaction receives all required approvals, Vaaldiam will issue 0.52 of a Vaaldiam share for each Elkedra share.

The successful completion of the plan of arrangement with Elkedra, which involves regulatory, court and shareholder approval is a condition precedent to the completion of the takeover of GWD. It is anticipated that the final approval will be obtained on or about November 2, 2007, following which it is anticipated that Vaaldiam will formally make its offer to shareholders of GWD by mailing a takeover bid circular.

To date, the board of directors of GWD has approved the proposed Offer and agreed to support the transaction pursuant to a support agreement executed with Vaaldiam. Vaaldiam has executed lock-up agreements with major shareholders who together hold an aggregate of 46.5% of GWD's issued and outstanding stock. Under the terms of the lock-up agreements these shareholders have irrevocably agreed to tender 43,619,779 GWD shares to the offer. One of the conditions in Vaaldiam's proposed offer will be that the number of GWD shares deposited under the offer (other than shares held by Vaaldiam and its associates and affiliates) and not withdrawn at the expiry of the offer shall constitute not less than 66 2/3 of the outstanding GWD shares on a fully diluted basis.

The combination of Vaaldiam, Elkedra and GWD will create a leading diamond production, exploration and development company with a pro forma market capitalization of over $160 million. It will be South America's largest diamond producer, and a leading Canadian-listed diamond producer and developer of advanced-stage kimberlite projects with excellent corporate growth potential. It is anticipated that its larger capitalization and increased liquidity will be of interest to a broader group of international investors giving it the financial capacity to realize the value potential of its exploration portfolio and to capitalize on future acquisition opportunities, and the ability to materially fund the advanced-stage kimberlite exploration and development costs from cash flow, thereby reducing dilution to its shareholders. It is expected that the new Vaaldiam will benefit from strong management expertise and seasoned, in-country development and operational teams in Brazil and experienced exploration teams in Brazil and Canada.

GWD Warrants to Expire October 11, 2007

Investors who acquired warrants of GWD as part of the initial public offering in October 2005 should note that those warrants expire October 11, 2007. The warrants are exercisable at $0.35 per share. The form needed to exercise the warrants can be obtained from Doug Patrick, whose contact information is listed below.

The shares acquired on exercise of the warrants can be tendered to the proposed takeover bid by Vaaldiam, on the same terms as all other common shares of GWD, outlined above.

Management of GWD believes that there are significant benefits to shareholders from creation of the combined entity of Vaaldiam, GWD, and Elkedra, and that warrant holders have a unique opportunity to participate before the market fully realizes the merits of the combined entity.

Great Western Diamond Corp. is an exploration and mine development company that is operated on a vision of growth and substantial enhancement of shareholder value based on a balance of management experience, technical expertise, and expansion of operations. GWD currently is focused on the 100%-owned Candle Lake Diamond Project in central Saskatchewan where an aggressive, results-driven evaluation program is targeted on reaching an advancement decision on the Candle Lake kimberlites by the end of 2008. While Candle Lake is the core diamond project, the Company continues to build a balanced and geographically diverse project portfolio with both advanced and grass-root diamond properties in Canada and Brazil.

Brent Jellicoe, P.Geo President & CEO

This news release may contain forward looking statements, being statements which are not historical facts, including, without limitation, statements regarding the proposed acquisition of Elkedra by Vaaldiam, the proposed acquisition of GWD by Vaaldiam and discussions of future plans and objectives. There can be no assurance that such statements will prove accurate. Such statements are necessarily based upon a number of estimates and assumptions that are subject to numerous risks and uncertainties that could cause actual results and future events to differ materially from those anticipated or projected. Important factors that could cause actual results to differ materially from expectations are in documents filed from time to time with the TSX Venture Exchange and provincial securities regulators, most of which are available at GWD disclaims any intention or obligation to revise or update such statements.

The following factors, among others, related to the proposed acquisition of each of Elkedra and GWD and future plans and objectives could cause actual results or developments to differ materially from the results or developments expressed or implied by forward looking statements: the Vaaldiam shares to be issued in connection with the Elkedra offer or the GWD offer may have a market value lower than expected; the businesses of Vaaldiam and Elkedra and the businesses of Vaaldiam and GWD may not be integrated successfully or such integration may be more difficult, time-consuming or costly than expected; the expected combination benefits from the acquisition of each of Elkedra and GWD may not be fully realized by Vaaldiam or not realized within the expected time frame; Vaaldiam cannot determine the number of Elkedra shareholders or GWD shareholders who may accept the Elkedra offer or the GWD offer, respectively; the possible delay in the completion of the steps required to be taken for the acquisition of either Elkedra or GWD and the ultimate combination of Vaaldiam with each of Elkedra and GWD.

The securities being offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States in the absence of registration or an applicable exemption from the registration requirements. This press release does not constitute an offer to sell or the solicitation of an offer to purchase securities in the United States.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release

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