Siberian Diamonds Limited

September 06, 2007 09:00 ET

Siberian Diamonds Limited Exploration Update

- Summer/Fall exploration programs are well advanced on three SDL properties: total budget of $CAD 3.8 million - SDL's diamond/indicator mineral recovery lab in Irkutsk operational. - Exploration program results anticipated in October

TORONTO, ONTARIO--(Marketwire - Sept. 6, 2007) - Siberian Diamonds Limited ("SDL") currently holds four exploration licenses in the Irkutsk Oblast of Eastern Russia, totaling approximately 10,000km2. Diamonds and high-interest indicator minerals have previously been found on each of these licenses. SDL is the only exploration company other than ZAO Alrosa (Russia's largest diamond producer) actively exploring the highly prospective Siberian Craton.

Paul Sobie, Chief Executive Officer today reported on the Company's recent progress:

- Fully equipped exploration teams are active on the VB ("Verkhne-Biryusa"), TU ("Tanguy-Uda") and M ("Mura") properties,

- Sampling, prospecting, geophysics and core drilling, underway,

- Following-up on priority areas where diamonds and high-interest indicator minerals are known from SDL work and past exploration.

- Initial results expected in October, regular reporting thereafter

"I am pleased to report that the 2007 Summer/Fall Exploration programs are proceeding on-time and within budget, with large areas covered by HMC (approximately 60 litre "heavy mineral concentrate") sampling, pitting, deep HMC auger drilling, and SVS (1-20m3 "small volume samples")", said Mr. Sobie. "The first picking and analytical results are starting to be received, and the Company anticipates announcing results regularly this fall."

"All of these properties benefited from successful internally-funded exploration during the 2006-2007 field season including blanket high-resolution airborne geophysical surveying. Significant occurrences of commercial-sized (+1mm diamonds) as well as high-interest kimberlitic indicator minerals ("KIMs") are present on each. The focus of the Company's current work is to complete the follow-up necessary for prioritization and testing of the airborne targets, as well as assessing alluvial diamond potential," concluded Mr. Sobie.

VB Property:

A 17 member team, including 3 geologists and a mineralogist, is exploring the property from SDL's base camp in Talaya Village, approximately 40km from the major town of Taishet on the Trans-Siberian Railway and National Highway. The property is well accessed by a network of roads serving villages and farms. Two contractor drilling rigs were active, with one now moved on to the TU property.

The Ingashet Area of diamond-bearing alluvial terraces, which includes the 7.46 carat stone recovered during the Soviet era, is receiving a large amount of work. SDL has completed 3 geophysical-sounding profiles to map the gravels in the area of the historical diamond recoveries, with drilling/sampling follow-up now in progress. This geophysics is showing gravel thicknesses up to 30m beneath the overlying blanket of fine sands, over widths exceeding 1.5km, within Terrace 6, the oldest and largest of the Ingashet alluvial deposits, at over 25km in length. A well-developed deeper channel structure also appears to be present within the present 6km long area of more detailed work, to be confirmed by drilling.

A 20m3 small volume sample was extracted by excavator near past recovery sites of +1mm diamonds on the Ingashet River (which drains Terrace 6), and is being processed through an on-site washing plant and SDL's laboratory in Irkutsk. Results are expected in mid-late October for this, as well as other SVS's and HMC's.

In the Yamnaya Area a swarm of alkaline ultrabasic intrusive dykes +/- pipes has been discovered, and work has included extensive HMC sampling, pitting, trenching and core drilling. Large numbers of indicator minerals found in HMC's, including diamond-stability field chromites, suggest that true lamproitic rocks are also present here and which continue to be pursued.

A total of five accessible geophysical targets outside of Yamnaya were tested by core drilling, with all being explained by accumulations of magnetic minerals or rock fragments in bedrock depressions. In 2006 two targets were tested and intersected alkaline breccia pipe bodies, which combined with the Yamnaya results, confirm that VB has been the locus of alkaline and ultrabasic magmatism. This is a common trait of Yakutian kimberlite fields and is regarded by SDL as highly significant at this early stage of exploration. Over a dozen priority geophysical anomalies have received follow-up ground surveys and await winter drill testing.

TU Property:

A 26 member team, including 4 geologists and a mineralogist, work out of the base camp in Octyabrysky Village, approximately 50km from the city of Nizneudinsk, also on the Trans-Siberian corridor. Two company auger drills have been active since June taking deep HMC samples. During the week of August 27th the first contractor coring rig was mobilized to the property. The property is easily accessed via a network of logging roads, but large areas are better worked in winter due to swamps and lowlands.

Present work has focused on five priority areas demarcated by SDL's 2006-2007 exploration which had begun to follow-up the 121 +1mm diamonds, as well as scattered KIMs of interest, recovered by previous government-funded teams.

The Tarma Area includes consistent and compelling diamond recoveries over several kilometres in terraces and modern alluvium, and pitting/deep HMC drilling has commenced. Deep HMC sampling during the 2006-2007 winter found large numbers of KIMs in several samples, and the present focus is to define this dispersion. Detailed re-interpretation of the airborne magnetics in this area has identified at least 10 high-priority targets for drilling after freeze-up and ground surveys which are in progress.

A 10-20m3 SVS is being taken on the Tarma River at the location where historical sampling last recovered diamonds. Results should be available in late October/early November.

At the Verkne-Talsky Area, SDL is focused on an area of alteration, brecciation and intrusion where a 0.25mm microdiamond fragment was recovered in a 30 litre deep HMC sample during the 2006-2007 winter. In addition anomalous numbers of KIMs in adjacent samples were identified. A large number of follow-up samples have been taken and mechanical trenching as well as core drilling on 3 geophysical anomalies has commenced. This area lies up-stream of the site where the 2.43carat diamond was recovered in the 1950's, and where in 2006 SDL recovered a +2mm, 16.55mg diamond fragment in Sample TU-SVS-14 (10m3). Both SDL diamonds are partial crystals and exhibit features suggesting close proximity to source, including well-preserved breakage surfaces.

Elsewhere on the property, 3 areas of historical diamond and KIM interest, Kaduy, Bolotny and Berezovy are receiving systematic follow-up programs of sampling, prospecting and ground geophysics preparatory for winter exploration.

M Property:

The M or Mura property is receiving its first SDL ground exploration following airborne geophysics in late 2006, and a 23 man team including four geologists and a mineralogist has established a self-sufficient base camp in the centre of the property. The property lies some 100km northwest of the large city of Bratsk, and is an active logging area.

Mura represents a very compelling exploration situation, as a well-established, discrete aureole of high-interest KIMs is present in the western portion of the property where the airborne geophysical surveying has generated nine priority targets. The KIMs are found in very high numbers within limited remnant exposures of Carboniferous (ie. just younger than Devonian-aged kimberlites found throughout Yakutia) conglomerates and are also abundant within younger consolidated Jurassic sediments, and within Quaternary alluvium.

SDL has completed a large amount of sampling to cover the property and constrain the aureole, which as at August 20 totalled 254 HMC samples and 7 SV samples. Ground geophysical follow-up surveying is in progress, and the company's drill is expected to arrive in late September or early October to commence target testing. The first analytical results are expected within a month.

Other Properties:

The company is expecting a quotation shortly for airborne magnetic surveying on it's northernmost AC ("Angoroi-Chonska") property, for October commencement. A winter program of auger HMC and ground geophysical follow-up is planned for AC, which is winter-road accessible. Also the Company has officially relinquished the B ("Biryusa") property after extensive review ranked its prospectivity below that of current holdings and anticipated new license grants.

About Siberian Diamonds Limited

Toronto/Moscow-based Siberian Diamonds Limited is a private Guernsey-incorporated exploration company which currently holds four exploration licenses in Irkutsk Oblast with total area of approximately 10,000km2. SDL currently is the only exploration company other than Alrosa to be exploring the highly prospective Siberian Craton. SDL is planning for an Initial Public Offering and listing in Canada and Europe in early 2008.

The Company's website is www.siberiandiamonds.ru.

National Instrument 43-101

Paul Sobie, registered Professional Geologist of Ontario and Chief Executive Officer of Siberian Diamonds Limited is the Qualified Person for the Company responsible for the Quality Control and other requirements regarding the above properties as defined under the Canadian Securities Administrators' National Instrument 43-101, and the reporting of project information.

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