Superior Diamonds Inc.

Superior Diamonds Inc.

March 16, 2005 17:45 ET

Superior Diamonds Proposes a $4 Million Financing


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: SUPERIOR DIAMONDS INC.

TSX VENTURE SYMBOL: SUP

MARCH 16, 2005 - 17:45 ET

Superior Diamonds Proposes a $4 Million Financing

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - March 16, 2005) - Superior
Diamonds Inc. (TSX VENTURE:SUP)

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED STATES

Superior Diamonds Inc. today announced that it proposes to raise up to
$3,800,025 in a brokered private placement through the sale of flow
through shares at $0.50 per share and non-flow through units at $0.45
per unit. Each non-flow through unit will consist of one common share
and one-half of one share purchase warrant. One whole share purchase
warrant will entitle the holder to buy one common share for $0.60 within
two years after closing.

Superior Diamonds will use the gross proceeds of up to $3.8 million from
the private placement, which is subject to regulatory approval, for
ongoing exploration and development programs and general working
capital, subject to flow through funding expenditure requirements. All
proceeds from the sale of flow through shares to Ontario resident
purchasers will be incurred in the province of Ontario.

Octagon Capital Corporation and Raymond James Ltd. will act as agents
for the financing on a best efforts basis and be paid a cash commission
of 7% of gross proceeds from the sale of all flow through shares and
non-flow through units and receive compensation warrants equal to 7% of
the total number of flow through shares and non-flow through units sold.
Each compensation warrant will entitle the holder to purchase one common
share at a price of $0.60 within two years after closing. The agents
will also have an option, exercisable up to 24 hours prior to closing,
to increase the amount of the offering by up to $1,000,000, by acquiring
any combination of flow through shares and/or non-flow through units.

If insiders of the Company participate in the offering, which
participation will be subject to the approval of independent directors
of the Company, it will be on the same terms as arm's length investors,
and shareholdings of insiders in the Company will increase as a result
of any such participation. The private placement may close before 21
days following the filing of the material change report regarding this
announcement, if management determines it is necessary or desirable for
sound business reasons.

Concurrent with this offering, Superior also announced that it proposes
to sell by way of non-brokered private placement up to 444,444 non-flow
through units at $0.45 per unit. Each unit will consist of one common
share and one-half of one share purchase warrant. One whole share
purchase warrant will entitle the holder to buy one common share for
$0.60 within two years after closing. Superior Diamonds will use the
gross proceeds of up to $200,000 from the private placement, which is
subject to regulatory approval, for ongoing exploration and development
programs on projects in Quebec and general working capital.

This press release will not constitute an offer to sell or the
solicitation of any offer to buy the securities in any jurisdiction. The
shares have not been and will not be registered under the United States
Securities Act of 1933 and may not be offered or sold in the United
States without registration or an applicable exemption from the
registration requirements.

Superior Diamonds is exploring a large area of northern Ontario using
proprietary magnetic data and has a large land position acquired on the
basis of kimberlite indicator mineral sampling and close spaced airborne
magnetic surveys. In addition, Superior Diamonds has properties in the
Superior Craton area of Ontario and Quebec, which are operated both
independently and in joint venture with Inco Limited, Majescor Resources
Inc. and Strongbow Exploration Inc. Superior Diamonds Inc. is owned
24.6% by Aurora Platinum Corp. and 19.8% by Southwestern Resources Corp.

Statements in this release that are forward-looking statements are
subject to various risks and uncertainties concerning the specific
factors disclosed under the heading "Risk Factors" and elsewhere in the
Corporation's periodic filings with Canadian securities regulators. Such
information contained herein represents management's best judgment as of
the date hereof based on information currently available. The Company
does not assume the obligation to update any forward-looking statement.


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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Superior Diamonds Inc.
    John G. Paterson
    President
    (604) 806-0667
    (604) 688-5175 (FAX)
    or
    Superior Diamonds Inc.
    Thomas W. Beattie
    Director
    (604) 806-0667
    (604) 688-5175 (FAX)
    info@superiordiamonds.ca
    www.superiordiamonds.ca
    The TSX Venture Exchange does not accept responsibility for the adequacy
    or accuracy of this release.