Diamondex Resources Ltd.
TSX VENTURE : DSP

Diamondex Resources Ltd.

January 25, 2006 14:39 ET

Diamondex Updates Lena West and Pegasus Projects

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Jan. 25, 2006) - Diamondex Resources Ltd. (TSX VENTURE:DSP) ("Diamondex") is pleased to advise that three diamonds have been recovered in concentrates produced from samples collected during the 2005 sampling program at the Lena West property. Mr. Randy Turner, president of Diamondex, stated that the results are encouraging, given that less than 10% of the concentrates resulting from the 2005 program have been "picked" for indicator minerals to date. The diamonds were located within a single district where highly anomalous concentrations of indicator minerals have recently been reported.

The diamond crystals measure less than 0.4mm in their longest dimension, but morphological examination of the pyrope and picroilmenite grains recovered in the area has determined that a high proportion of the grains show no sign of mechanical wear. The significance of this observation is that the grains originated from sources that are proximal to the sample sites.

In addition to announcing the discovery of these diamonds, the Company is pleased to provide updates on exploration activities on its Lena West project located in the Northwest Territories and Pegasus project, located in central Alberta. (See www.diamondex.net for property locations).

Lena West Project, Northwest Territories

Diamondex began exploring in the Lena West area in 2002 and since that time, a total of $13.1 million has been expended over the project area on exploration initiatives that have included land acquisition, airborne geophysics (141,800 line-kilometres of fixed wing magnetic and time domain electromagnetic surveys), stream sediment and till sampling (3,885 samples), detailed ground geophysical surveys, as well as auger and diamond drill testing.

2005 Exploration Program

During 2005, the Company undertook a $5.3 million exploration program that included the collection of 1,724 stream sediment samples, a 6,758 line-kilometre GEOTEM survey, and the detailed ground evaluation of priority geophysical anomalies. A 524m diamond drill program was undertaken in the Lac des Bois area, which is located approximately 250km southeast of the "greater Lena" area. In addition to these investigations, the Company embarked on a large claim staking program to protect the most prospective ground that will otherwise become open following the expiry on January 31, 2006 of the prospecting permits in the project area that are located below the 68th parallel north latitude.

Stream Sediment Sampling Progress

Over the 2005 exploration season, a total of 1,724 stream sediment samples were collected from the Lena West project area. This sampling program, under the direction of the Company's consultant, Dr. Nikolai Pokhilenko, Director of the Diamond Research Institute, Novosibirsk, Russia, was the first such program dedicated exclusively to following-up those regions which had produced high priority kimberlite indicator mineral ("KIM") results during the regional sampling programs conducted between 2002 and 2004. As a result, instances where anomalous concentrations of KIM grains with fresh surfaces (proximal to source) recovered over the course of the panning operations are not uncommon. During the summer field season, at least four districts within the 25,000 square kilometre project area were determined to host anomalous concentrations of pyrope grains of both harzburgitic lherzolitic provenance as well as large picroilmenite grain populations.

To the end of December, the majority of the stream sediment samples collected during the 2005 field season had undergone initial processing. However, as stated earlier, "picking" of the resulting concentrates for KIMs is less than 10% completed. It is expected that all 1,724 samples collected during the latest field season will be picked and that the resulting KIMs will be morphologically examined and subjected to chemical analysis at the Diamond Research Institute in Novosibirsk by June 2006.

Commenting on the discovery of the three diamonds, Dr. Pokhilenko stated: "The importance of these most recent discoveries is made more significant by the fact that there is a marked decrease in the number of indicator minerals recovered in areas up-ice of the district and that there are several geophysical anomalies coincident with these localities that contained significant KIM counts. The fresh-surfaced KIM grains are definitely derived from local primary sources located not more than 3 to 5 km away and it is possible to conclude that this particular district is one of the most promising within the Lena West project area."

Diamond Drill Program

In May the Company undertook a small diamond drill-testing program in the Lac des Bois area. Two attempts were made to test anomaly 1906 (a magnetic low with a surface expression measuring 840m by 440m) and a single test was undertaken on anomaly 1733 (a magnetic high with a surface expression measuring 420m by 280m). In all, 524m of drilling were completed but only 246m of core was recovered in the process. Through a combination of difficult ground conditions and poor core recovery, neither of the investigated anomalies was resolved to the Company's satisfaction. Selected intervals of core recovered from the test of anomaly 1733 were sent to a number of independent petrologists for thin section study. Their evaluations led to a consensus that while the samples were predominantly sedimentary in character, they did contain a volcaniclastic component. The submitted rock type classifications ranged from tuffaceous mudstone to crater facies kimberlite.

2006 Exploration Program

Within the Lac des Bois district, there are several dozen priority geophysical anomalies. To date, drilling has been attempted on only 5 of these targets. However, none of these tests were completed to the Company's satisfaction. The experience gained from the previous drilling campaigns combined with the latest studies of the recovered core has led to a re-evaluation of the factors that identify priority diamond drill targets within the district. The recently completed GEOTEM survey results along with the existing magnetic data set will help prioritize specific anomalies that will be evaluated with detailed gravity surveys during March 2006. A follow-up diamond drill program in this area is also being considered for April and May.

In addition to the exploration program planned for the Lac des Bois district, Diamondex is planning several detailed airborne magnetic surveys for priority districts within the "greater Lena" portion of the project area. A follow-up till and stream sediment sampling program will be undertaken during the summer months, along with the first diamond drilling campaigns within these districts.

The Lena West Project is comprised of 139 prospecting permits and 33 mineral claims totaling 6,164,100 acres, centred approximately 900 kilometres northwest of Yellowknife and 200 kilometres southeast of Inuvik, Northwest Territories. The Lena West Project is 100% owned by Diamondex.

Diamondex Initiates Exploration of the Pegasus Project

Diamondex's first exploration within the Pegasus Project area began earlier this month when Firefly Aviation Ltd. completed the first portion of a planned 18,574 line km high resolution airborne magnetic survey (HRAM). The survey is being flown at 100m line spacing and is expected to be completed over the next 2 to 3 weeks. Results from this initiative will help redefine the scope and character of the upcoming 2006 exploration campaign, which is expected to include detailed ground geophysical and surficial material sampling surveys, as well as diamond drill testing of targets of merit.

The Pegasus Project is located in central Alberta. It is comprised of 124 Metallic and Industrial Mineral permits, encompassing approximately 2,640,000 acres. Diamondex has recently entered into four one-year option agreements with third parties to acquire an additional 308,272 acres of lands internal to the Company's large land package. The project area is centred over basement rocks (the Loverna Block) that form part of the Archean Hearne Province. Historically, till samples collected over the project area have provided some of the highest concentrations of G-10 garnet recorded in Alberta.

Primrose Property Permits Optioned

Diamondex continues to expand the Pegasus Project land position. The Company recently negotiated a one year option agreement (the "Option") to acquire an additional 61,000 acres of lands internal to the 2,640,000 acres acquired in August 2005. This transaction is subject to acceptance by the TSX Venture Exchange. The additional acreage consists of three Metallic and Industrial Mineral permits held by SandSwamp Exploration Ltd. (the "Optionor"). The agreement provides that Diamondex can acquire a 100% interest in the permits on or before January 4, 2007 through a combination of cash payments and share issuances to the Optionor and a work commitment. The consideration for the option is a cash payment of $25,000 plus issuance of 34,000 shares. The work commitment requires the expenditure of $45,000 over the one year option period. To exercise the Option, the Company must pay the Optionor an additional $50,000 together with 68,000 shares on or prior to the first anniversary of the agreement. The property held by the agreement is subject to a 2% gross overriding royalty. The Company may elect to "buy down" one half of the royalty for $500,000 if the election is made within two years of the exercise of the Option, or for $1,000,000 if such election is made thereafter. With the addition of the Primrose property, Diamondex has negotiated a total of five one-year option agreements within the Pegasus Project, which now covers approximately 2,900,000 acres.

David Clarke, P.Geol., MSc., Vice President of Exploration for Diamondex Resources Ltd. is a Qualified Person as defined by National Instrument 43-101 and is responsible for program design and quality control of exploration undertaken by Diamondex Resources Ltd.

DIAMONDEX RESOURCES LTD.

John A. McDonald, Director


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