Brazilian Diamonds Limited
TSX : BDY
AIM : BDY

Brazilian Diamonds Limited

October 31, 2005 09:00 ET

Brazilian Diamonds Limited: Kimberlite Exploration Update

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Oct. 31, 2005) -

SANTO ANTONIO ALLUVIALS BULK SAMPLING COMMENCES

ISO RATING OF PATOS LABORATORY

Brazilian Diamonds Limited (TSX:BDY)(AIM:BDY) is pleased to provide this update on the Company's search for the source of large diamonds found within the Santo Antonio do Bonito River. Exploration activity is currently focused on both the headwater plateau of the river, where the bedrock sources are thought to be located, and downstream, where the alluvial joint venture has begun bulk sampling activities as part of its ongoing feasibility study.

Santo Antonio do Bonito kimberlite exploration:

In the headwater plateau of the Santo Antonio do Bonito River, drilling continues on the plateau where kimberlite or kimberlitic rocks have been intersected in 4 of the 5 holes drilled to date. Core from this drilling is being split and logged in detail, with indicator minerals being recovered at the Company's mineral processing laboratory in Patos de Minas, Brazil. Intersections that yield high-interest pyrope garnets and chromites similar to those recovered from alluvial samples taken in the vicinity will be selected for testing for micro-diamonds by caustic fusion.

Drilling has now been completed on the Vargem 2 kimberlite pipe, which is located across the headwater plateau from the Santo Antonio do Bonito River. This body comprises a re-sedimented volcaniclastic kimberlite with fining upwards layers suggestive of deposition in a crater lake. The Vargem 2 kimberlite is sufficiently close to the headwater plateau that it may be considered as part of a cluster of pipes which have the potential to be the source of diamonds in the area. Indicator mineral samples are being prepared at the Patos de Minas laboratory and micro-diamond samples have been shipped to the Saskatchewan Research Council (SRC) laboratory in Canada for caustic fusion analysis. Results from the caustic fusion analysis are expected in November, 2005.

Santo Antonio do Bonito alluvial diamond feasibility study:

The joint venture feasibility study designed to enable the making of a decision on the construction of a large-scale alluvial diamond mine on the lower portion of the Santo Antonio do Bonito River has commenced.

Plant construction is now largely completed and stripping has started on the first of four test pits. It is expected that commissioning of the alluvial plant will commence in the next 10 days whereupon full scale sampling will commence. It is planned to test in total approximately 20,000 cubic metres of gravel material during this phase. All of the licenses necessary to undertake this sampling operation have been granted by the authorities and activity is being closely monitored by the Company's in-house environmental specialist. Barring any unusual weather activity, the sampling will take between 3 and 4 months to complete and it is expected that initial results will begin to be received during November.

The joint venture study is being funded by the Minas Gerais State Government organization for mineral project development (CODEMIG). If the joint venture proceeds to full scale mine development, 100% of the development funding will be provided by Rio Novo Mineracao, the alluvial diamond mining arm of Andrade Gutierrez, a large Brazilian civil engineering and mining group. Brazilian Diamonds will retain a 25% fully carried interest in the project.

Tucano Area Kimberlite Exploration:

An auger drilling programme has now been completed in an area approximately 1.5 km southeast of the diamondiferous Tucano 1 kimberlite. This programme was carried out in order to test a magnetic anomaly consistent with kimberlite, identified in the area. This anomaly, yet to be named, has returned prolific numbers of indicator minerals from a weathered volcanic breccia which appears to be kimberlitic in nature. These indicator minerals are now being prepared for microprobe analysis to determine their mineral chemistry, which will look for high-interest pyrope garnets and chromites that may point to similar or better diamond potential to that found at the nearby Tucano 1 kimberlite.

Patos de Minas Laboratory:

The process of accreditation of the laboratory to ISO 17025 standards is now well advanced. The Company continues to treat samples for third party clients and is now looking to expand the scope of the lab's activities. The Patos de Minas laboratory specializes in mineral processing for the Company's diamond exploration program, with the capability of recovering indicator minerals and diamonds from sediment samples and mini-bulk samples up to approximately 10 tonnes in size.

Editors' Note:

Brazilian Diamonds is a leading Brazil-based exploration company focused on the discovery of kimberlites on its extensive portfolio of properties in the State of Minas Gerais, with the goal of becoming a significant producer of diamonds.

The Company has a fully operational diamond separation/analysis laboratory at Patos de Minas, Minas Gerais which is strategically located near its properties in the Santo Antonio and Coromandel areas. The Company has a staff of approximately 85 people, almost all of whom are located at the Company's facilities in Brazil and this includes 5 full time geologists.

The Company's strategy for non-core activities on its properties is to form joint ventures: a Cdn$800,000 feasibility study is currently underway for a joint venture for the mining of alluvial diamonds on its properties in the Santo Antonio river drainage. The joint venture involves two important Brazilian companies: CODEMIG, the state owned mining development organisation and Mineracao Rio Novo Ltda., a wholly owned subsidiary of Andrade Gutierrez SA, one of Brazil's largest civil engineering firms and an existing large scale, dredge based producer of alluvial diamonds.

Contact Information

  • Brazilian Diamonds Limited
    Investor Relations
    North America: 1-877-689-2599 or London: + 44-207-794-1340
    (604) 662-8429 (FAX)
    ir@braziliandiamonds.com
    or
    Brazilian Diamonds Limited
    Kenneth P. Judge
    Chairman
    + 44-7733-001-002
    or
    Brazilian Diamonds Limited
    Stephen Fabian
    President & CEO
    + 55-31- 8814-5111
    www.braziliandiamonds.com