Vaaldiam Resources Ltd.
TSX : VAA

Vaaldiam Resources Ltd.

May 15, 2006 09:51 ET

Vaaldiam Terminates Hotish Property Option With Dios

TORONTO, ONTARIO--(CCNMatthews - May 15, 2006) - Vaaldiam Resources Ltd. (TSX:VAA) reports that, following a review of the results of the Company's exploration programs completed in 2005 on the Hotish Property, the Company has informed Dios Exploration Inc. that Vaaldiam will not proceed with further exploration of the Hotish property. Under the terms of the option agreement with Dios, Vaaldiam had the right to earn a 51% interest in the property, situated in the Otish Mountain District of Quebec, by spending C$2.0 million on exploration of the property by April 2008, and by issuing a total of 100,000 common shares during the same period. With the termination of the option, Vaaldiam will not retain any rights to the Hotish property.

Included in Vaaldiam's current cash balance of C$18.2 million is an amount of C$1.8 million which was funded by the issuance of flow-through shares, and accordingly is to be spent on Canadian exploration initiatives. Vaaldiam is currently reviewing several high potential Canadian-based diamond exploration opportunities, which if acquired would be financed, at least in part, by the C$1.8 million of flow through funds available to the Company.

About Vaaldiam

Vaaldiam is a Canadian-based diamond exploration company primarily involved in the exploration and development of the 248,000 hectare Pimenta Bueno diamond property in the state of Rondonia, Brazil currently under option to Rio Tinto. To date, 34 kimberlite pipes have been discovered within the property area. Twenty-four of the 34 known pipes occur in one large cluster and 15 of the 34 pipes have been found to be diamond-bearing on the basis of macro and micro diamond analyses. Rio Tinto is currently focusing its attention on the bulk sampling of 9 of the known kimberlites, in an effort to recover commercial sized diamonds which will allow the estimation of diamond grade. A total of 164 tonnes of kimberlite has been extracted by Rio Tinto from 4 of the 9 kimberlites currently being evaluated, and diamond results are expected to be available in June. A technical report dated December 23, 2005, and amended on March 10, 2006 entitled "Technical Report on the Pimenta Bueno Project, Brazil, in respect to this project has been filed on www.sedar.com.

In an initiative aimed at generating early cash flow, Vaaldiam is also advancing development of its Duas Barras alluvial diamond property in Minas Gerais state, Brazil. Delineation drilling is continuing utilizing three drill rigs, to define the diamond bearing alluvial gravels on a detailed basis for resource estimation and mine planning purposes. Engineering, processing plant design, and construction of additional accommodation and administrative buildings is underway, with the start of commercial production targeted for Q4-2006. A drilling program, utilizing three core rigs, is also underway on the Brauna property in the state of Bahia in Brazil, where four kimberlite pipes are being delineated in advance of a mini-bulk sampling program scheduled for later this year.

This release has been reviewed by Paul Daigle, PGeo., Senior Project Geologist who is a qualified person under National Instrument 43-101.

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.

Contact Information

  • Vaaldiam Resources Ltd.
    Ken Johnson
    President and CEO
    (416) 363-6927
    or
    Vaaldiam Resources Ltd.
    Janet Reid
    Manager, Investor Relations
    (416) 363-6927
    www.vaaldiam.com