Sanatana Diamonds Inc.
TSX VENTURE : STA

Sanatana Diamonds Inc.

December 30, 2010 17:55 ET

Sanatana Announces Closing of First Tranche of Private Placement for Proceeds of $1,650,000

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 30, 2010) - Sanatana Diamonds Inc. (TSX VENTURE:STA) -

THIS NEWS RELEASE IS NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES FOR DISSEMINATION IN THE UNITED STATES

Sanatana Diamonds Inc., ("Sanatana" or the "Company"). Further to its news releases of December 15, 2010 (the "December 15th News Release") and December 17, 2010, Sanatana is pleased to announce that it has closed the first tranche of the private placement (the "Offering") and has issued 9,705,883 flow-through shares (the "FT Shares") for gross proceeds of $1,650,000 of which 2,352,941 FT Shares were purchased by the MineralFields Group. The Company will renounce an amount equal to the gross proceeds derived from the sale of the FT Shares to purchasers in accordance with the provisions of the Income Tax Act (Canada). All securities issued in the closing of the first tranche will be subject to a hold period which expires May 1, 2011.

The Company paid Limited Market Dealer Inc. ("LMD") a cash commission equal to 6% of certain of the subscriptions placed by LMD (being $18,000) and issued to LMD broker's warrants (the "Broker's Warrants") equal to 7% of certain of the FT Shares sold by LMD (being 123,529 Broker's Warrants). Each Broker's Warrant entitles LMD to purchase one additional non flow-through common share in the capital of the Company (a "Common Share") at an exercise price of $0.25 per Common Share until December 30, 2011.

In connection with the first tranche closing, the Company also paid an aggregate cash commission of $66,900 to certain arm's length finders (equal to 6% of the subscriptions placed by the respective finders) and issued 413,823 Broker's Warrants to certain arm's length finders (equal to 7% of the FT Shares placed by the respective finders).

The funds raised from the first tranche will be used for the purposes described in the December 15th News Release.

"We are very pleased to be entering into this relationship with MineralFields Group," said Peter Miles, Chief Executive Officer. "This is an important milestone in the growth of Sanatana Diamonds Inc. and we look forward to working with MineralFields Group as we develop our properties."

About MineralFields, Pathway and First Canadian Securities ®

MineralFields Group (a division of Pathway Asset Management), based in Toronto, Vancouver, Montreal and Calgary, is a mining fund with significant assets under administration that offers its tax-advantaged super flowthrough limited partnerships to investors throughout Canada as well as hard-dollar resource limited partnerships to investors throughout the world. Pathway Asset Management also specializes in the manufacturing and distribution of structured products and mutual funds (including the Pathway Multi Series Fund Inc. corporate class mutual fund series). Information about MineralFields Group is available at www.mineralfields.com. First Canadian Securities ® (a division of Limited Market Dealer Inc.) is active in leading resource financings (both flow-through and hard dollar PIPE financings) on competitive, effective and service-friendly terms, and offers investment banking, mergers and acquisitions, and mining industry consulting, services to resource companies. MineralFields and Pathway have financed several hundred mining and oil and gas exploration companies to date through First Canadian Securities ®.

About the Company

Sanatana Diamonds Inc. is an exploration stage company seeking new projects to complement its existing properties in the Northwest Territories and the Yukon. With an experienced management team and board of directors, Sanatana has the skills required to identify, develop and fund economic mineral properties. Sanatana is based in Vancouver and is listed on the TSX Venture Exchange (TSX VENTURE:STA).

SANATANA DIAMONDS INC.

Peter Miles, President and Chief Executive Officer

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

Cautionary Statement Regarding "Forward-Looking" Information

Some of the statements contained in this press release are forward-looking statements and information within the meaning of applicable securities laws. Forward-looking statements and information can be identified by the use of words such as "expects", "intends", "is expected", "potential", "suggests" or variations of such words or phrases, or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements and information are not historical facts and are subject to a number of risks and uncertainties beyond Sanatana's control. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this news release. Accordingly, readers should not place undue reliance on forward-looking statements. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements, except as may be required by law.

Neither TSX Venture Exchange nor its Regulations Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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