GGL Diamond Corp.
TSX VENTURE : GGL

GGL Diamond Corp.

October 26, 2006 09:30 ET

GGL Diamond Project Updates

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Oct. 26, 2006) - GGL Diamond Corp. (TSX VENTURE:GGL) -

Dear GGL Shareholders:

Shareholder value for a company like GGL Diamond Corp. (GGL) is created by diamond discoveries that lead to commercial diamond production. Diamonds are hard to find, which has resulted in the current world shortage of rough diamonds - a shortage that is predicted to increase the value of rough diamonds by 30 percent in the next six years.

Your directors believe that GGL's exploration and business strategy to generate and to own multiple potential diamond targets, of which one or more will lead to production, will create the shareholder value we seek.

This special letter, intended to provide a perspective of our work to date, will show that we are close to our goal. To advance these projects, we are dependent on new financing and the support of our shareholders.

FISHBACK PROJECT (100% OWNED)

The Fishback property is located 60 kilometers northwest of Yellowknife and is only 30 kilometers from the paved all-weather Yellowknife Highway. A power line passes through the south portion of the claims. The Company has 100 percent ownership of the claims that contain 36,664 acres covering an area 11 kilometers x 12 kilometers.

The Company has identified a kimberlite-related breccia, containing kimberlite indicator minerals, in Awry Lake. It appears to be part of a kimberlite target area over 60 hectares in size and which may contain a closely-spaced cluster of kimberlites (Press Release, March 30, 2005 and June 7, 2004). Worldwide, only four commercial diamond mines exceed 60 hectares in area. As an example, the world famous 45-hectare Jwaneng diamond mine in Botswana consists of a cluster of four kimberlites.

This target area has been defined by magnetic, electromagnetic and gravity geophysical surveys, by surface and drill hole breccias and heavy mineral samples -- all with kimberlite indicator minerals -- and by lake sediment and surface soil samples containing kimberlite signatures. The calculated vertical gradient magnetic survey outlines a remarkable anomalous area approximately three kilometers in diameter around the central target.

The next phase of exploration, required to confirm the presence of kimberlite and to test its diamond affinity, is a program of diamond drilling.

CH PROJECT (100% GGL owned) - OVERVIEW

The CH Project area, containing 270,826 acres of mineral claims, is located from 30 kilometers south to 70 kilometers west of the Ekati and Diavik diamond mines.

This acreage is contained within the following properties, all 100 percent owned by GGL: Mackay; Courageous; G-claims; Seahorse/Shoe; Starfish, ZIP; Winter Lake North, BP; and Winter Lake South. Based on the chemistry of kimberlite indicator minerals (KIM), each of these properties has the potential to contain diamond-bearing kimberlites (Press Release, July 26, 2006)

In addition to extensive indicator mineral sampling, airborne geophysical surveys have been completed over all the claims at 50 to 60 meter spacing; all interesting geophysical targets have been checked by our field crews and evaluated for kimberlite potential.

We have been exploring continuously here since we began the CH Project in March of 2000. To date, we have invested $7 million in exploration expenditures on these properties to arrive at the present drill target selection stage.

The following is a summary of the principal properties in the CH Project area:

Courageous Property

The Courageous Property contains approximately 40,000 acres in an area 12 kilometers by 12 kilometers. To date, 12 potential kimberlite targets have been identified on these claims. Two of the targets were drill tested this past summer and one, subsequently named the Bishop Kimberlite, proved to be diamondiferous. Located 40 kilometers south of the Ekati Diamond Mine, the Bishop Kimberlite has some of the same characteristics as some of the producing diamond pipes. It contains fragments of wood in a re-sedimented volcaniclastic kimberlite which confirms this kimberlite also was formed by explosive eruption at surface. This suggests that the Bishop was formed by processes similar to those responsible for the formation of the Ekati and Diavik kimberlites. Indicator mineral analysis has confirmed that the Bishop Kimberlite sampled deep within the diamond stability field (Press Release, September 6, 2006).

After the discovery of the Bishop Kimberlite, the initial ground gravity survey that defined the target was expanded. The results show the potential for a much larger kimberlite within this 400m x 200m new gravity anomaly (Press Release, September 6, 2006)

Is this the first indications of the next Ekati or Diavik? Only further drilling and testing will tell, but this is a positive first step. Exploration will resume upon the successful completion of our next financing.

Shoe Property

The four Shoe mineral claims (previously included as part of the Seahorse property) contain 10,330 acres and are located 27 kilometers southwest of the Ekati Fox kimberlite pipe, which was recently put into production.

On the Shoe 4 mineral claim, a large drill target up to 300 meters in diameter (nine hectares) is located in a lake and defined by an airborne gravity anomaly flown by the BHP Condor system. A second drill target on the shore of the same lake is a magnetic anomaly 200 meters x 100 meters and has been defined by a Fugro airborne geophysical survey conducted for GGL.

These targets are at the head of a kimberlite indicator mineral train and are highly prospective to host a diamondiferous kimberlite. In addition, two other targets, also supported by kimberlite indicator minerals, have been identified on the same mineral claim. This claim alone hosts the potential for a cluster of diamondiferous kimberlites.

Depending on financing a ground gravity survey over the targets is proposed in preparation for a drill program.

Zip, Winter Lake, BP Property

The highest indicator mineral counts and some of the best diamond kimberlite chemistry occur on the ZIP, Winter Lake North, and BP mineral claims (Press Release, July 26, 2006). This large 95,000-acre area contains numerous indicator mineral trains. Our initial attempts at drilling geophysical targets in this geologically complex area showed that additional detailed indicator mineral sampling was required to define the targets. This additional sampling has begun and more sampling is planned for the summer of 2007.

DOYLE AND NEW CENTURY PROJECTS

The Doyle diamondiferous kimberlite sill has been traced over a strike length of two kilometers and down dip for one kilometer. The kimberlite averages two meters in thickness but the total extent of the kimberlite is yet to be determined. A 45-tonne kimberlite sample returned a low grade of diamonds but a higher than normal proportion of these were of gem quality diamonds. GGL's consultants have advised that additional mini-bulk samples are required to evaluate the diamond grade of this extensive kimberlite (Press Release, March 20, 2006).

On the New Century Project claims, the MZ diamondiferous kimberlite dyke system has been traced for over 4 kilometers x 1.5 kilometers. Consisting of multiple layers of kimberlite from several cm to over 3 meters in thickness, this extensive area is prospective for kimberlite blows and pipes (Press Release, July 26, 2005 and May 12, 2006).

In addition to the dykes and sills, both the Doyle and New Century projects, around the Gahcho Kue diamond mine, now being prepared for production by De Beers, hold great promise that many kimberlite pipes remain to be found, since the number of pipes found to date is few compared to most kimberlite fields. The Company is seeking joint venture participation for these projects.

SUMMARY

In summary, extensive exploration of GGL's property holdings provide strong evidence that the potential for diamond mines is excellent. To advance the projects described, we are seeking new financing and the continued support of our shareholders. We have an experienced and hard-working exploration team ready for the challenges ahead of us.

We need and ask for your continued support.

GGL DIAMOND CORP.

Raymond A. Hrkac, President & CEO

For more information, please check our web site at www.ggldiamond.com. Copies of press releases referenced in this letter are available on our website.

This letter contains certain statements that may be deemed "forward-looking statements". All statements in this letter, other than statements of historical fact, that address exploration drilling, exploitation activities and events or developments that the Company expects to occur, are forward looking statements. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could", "should" or are "subject to" occur. Information inferred from the interpretation of drilling results may also be deemed to be forward looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in the forward-looking statements. Factors that could cause the actual results to differ materially from those in forward-looking statements include market prices, exploitation and exploration successes, and continued availability of capital and financing, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. Forward-looking statements are based on the beliefs, estimates and opinions of the Company's management on the date the statements are made. The Company undertakes no obligation to update these forward-looking statements in the event that management's beliefs, estimates or opinions, or other factors, should change.


The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this letter.

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