Cream Minerals Ltd.

Cream Minerals Ltd.

February 25, 2005 09:00 ET

Cream Minerals Enters Into Agreement with Casierra Diamond Fund Inc. & Casierra Diamond Corporation


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: CREAM MINERALS LTD.

TSX VENTURE SYMBOL: CMA
OTC Bulletin Board SYMBOL: CRMXF

FEBRUARY 25, 2005 - 09:00 ET

Cream Minerals Enters Into Agreement with Casierra
Diamond Fund Inc. & Casierra Diamond Corporation

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Feb. 25, 2005) - Cream
Minerals Ltd. (TSX VENTURE:CMA)(OTCBB:CRMXF) ("Cream") is pleased to
announce that, subject to regulatory approval, it has entered into an
agreement (the "Agreement") with Casierra Diamond Fund Inc. ("CDF") and
its affiliate company, Casierra Diamond Corporation ("CDC")
(collectively the "Optionor") to earn an interest in production from two
exclusive prospecting licence areas for diamonds and other minerals and
metals in Sierra Leone, West Africa (the "Property").

Under the terms of the Agreement, Cream shall have the exclusive right
and option to earn up to a 70% undivided direct or indirect interest in
the Optionor's interest in the Property by completing the following
exploration expenditures on the Property and making the following share
issuance payments to the Optionor:



(i) Cream will be vested with an undivided 51% of the Optionor's
interest in the Property or the company which owns the Property
by issuing a total of 200,000 common shares of Cream, comprised
of 100,000 common shares on regulatory approval of the Agreement
and 100,000 common shares within 12 months following the date of
regulatory approval of the Agreement, and by completing not less
than US$500,000 in exploration expenditures on the Property
within 12 months following the date of regulatory approval.

(ii) Cream may acquire an additional 19% undivided interest (for a
total 70% of the Optionor's interest) by issuing an additional
300,000 common shares of Cream, within 24 months following the
date of regulatory approval of the Agreement and completing an
additional U.S.$300,000 in exploration expenditures on the
Property within 24 months following the date of regulatory
approval.


In the event Cream has acquired 70% of the Optionor's interest, a joint
venture will be constituted between the parties and each party will
contribute to further expenditures on the Property in accordance with
its interest. Provided that, if the Optionor is unable to fund its
share of joint venture expenditures, Cream will advance funds on its
behalf, such advances to be repaid, with interest at LIBOR plus 1%, out
of 80% of the Optionor's share in the net proceeds of production from
the Property prior to any other distribution to the Optionor.

Upon fulfilling the obligations set out above, Cream shall be vested
with an undivided interest in the Property or in the company which holds
title to the Property but in any event this interest may be converted,
if Cream so elects and subject to the approval of the Government of
Sierra Leone, into a direct interest in the Property at the time that a
production lease is obtained for the Property

No common shares will be issued as bonuses, finder's fees or commissions
in connection with this transaction. The common shares issued pursuant
to the Agreement have a four-month hold period expiring four months from
the date of each issuance.

CDF has been working in Sierra Leone since 1993 and obtained its first
prospecting licence on the Sewa River, which drains the Kono diamond
area. Kono is the most important centre of diamond production in Sierra
Leone with a high percentage of gem quality diamonds coming from
kimberlite and alluvial sources. Extensive alluvial diamond
exploitation has been carried out upstream of the CDF licence. The CDF
licence is located on a segment of the river channel that is slower and
deeper than the upstream reaches and hence has never been mined. An
"indicated resource" of almost 1.8 million carats of economically
mineable diamonds on the CDF licence is reported by the Geological
Survey of Sierra Leone in Bulletin Number 5 (1966). This resource
statement does not comply with the standards required under National
Instrument 43-101 and cannot be relied upon. The resource is not
supported by any measurable grade, but is rather a grade that is an
estimate based upon the experience of the bulletin author P.K. Hall,
A.R.S.M., B.Sc., A.M.I.M.M.

In late 1994, CDF obtained its second offshore special Exclusive
Prospecting Licence at the mouth of two rivers with extensive alluvial
diamond mining activity, the Moa and the Mano. Each rainy season these
rivers discharge large tonnages of diamondiferous sand and gravel into
the Atlantic Ocean at a point where there is a strong northwesterly
current that further winnows and concentrates heavy minerals including
magnetite. In 1995-96, CDF spent more than US$3.5 million in
geophysical surveys and sampling. Several shallow magnetic targets
associated with old submerged river channels were also sampled. This
sampling returned 20 diamonds of generally excellent quality and up to
1.22 carats in size.

CDF has recommended that exploration activity in Sierra Leone should
resume following the end of the civil war and the return to political
stability under the guidance of the elected President, Alhaji Dr. Ahmed
Tajan Kabbah and with the continuing support from British and European
governments.

Cream Minerals Ltd. plans to fund the further exploration and
development of the licences through CDF, with a view to bringing them
into production in the short term. All of this work will be subject to
approvals for mining plans, environmental and socio-economic studies.

Mr. Benjamin Ainsworth, P.Eng., President of Ainsworth Jenkins
Consultants Ltd. is the President of both CDF and CDC , the Optionor,
and will continue to be the operator on the Property. Mr. Ainsworth
recently visited the Property (December 2004) and determined that work
could be commenced immediately.

For further information about Sierra Leone, please refer to the Special
Report of the Financial Times of London, February 14, 2005.

For more information about Cream Minerals Ltd. and its mineral property
interests, please see our website at www.creamminerals.com.

Frank A. Lang, BA, MA, P. Eng.

President & CEO

U.S. 20-F Registration: 000-29870

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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Renmark Financial Communications Inc.
    Neil Murray-Lyon
    (514) 939-3989
    (514) 939-3717 (FAX)
    nmurraylyon@renmark.com
    or
    Renmark Financial Communications Inc.
    Sylvain Laberge
    (514) 939-3989
    (514) 939-3717 (FAX)
    slaberge@renmark.com
    or
    Cream Minerals Ltd.
    Malcolm Powell
    Investor Relations
    (604) 277-1752
    (604) 687-4212 (FAX)
    info@creamminerals.com
    No regulatory authority has approved or disapproved the information
    contained in this news release.