Drilling Report

SouthernEra Diamonds Makes New Kimberlite Discoveries at its Northwest

Territories Projects in Canada

 

    SouthernEra Diamonds Inc.

    Shares Issued and Outstanding: 85,335,411

    TSX: SDM

    AIM: SRE

 

    TORONTO, Sept. 16 /CNW/ - SouthernEra Diamonds Inc. (SDM: TSX, SRE: AIM)

today reported on new kimberlite discoveries at two of the Company's projects

in Canada's Northwest Territories. The new discoveries were made at the Lac de

Gras X Claims Project and the Yamba Lake Project.

    These projects are part of SouthernEra's extensive Northwest Territories

diamond exploration program, which is one of the largest active programs in

the region. This program is focused on the Lac de Gras Kimberlite Field, host

to Canada's two existing diamond mines (Diavik and Ekati) as well as the

Southern Kimberlite Field, located approximately 100 kilometers south of the

Diavik mine. Within the highly prospective Lac de Gras region, the Company's

program includes:

 

    -  X Claims Project (60 percent SouthernEra);

    -  Yamba Lake (60 percent);

    -  Monument Project (22.5 percent);

    -  Tenby Project (20 percent);

    -  ATW Project (10 percent);

    -  Commonwealth Project (10 percent); and

    -  WO Block Project (6.5 percent).

 

    To view map, click here:

    http://files.newswire.ca/364/semap.doc

 

    On the Southern Kimberlite Field, SouthernEra's program includes the Back

Lake Project (60.4 percent) and the Kidme Block Project (60 percent).

    At the Lac de Gras X Claims Project, which is 25 kilometers west of the

Diavik mine, the successful 824.7 meter diamond drilling program this winter

was initiated to test 17 high interest airborne targets and to retest a known

kimberlite pipe, EG02. The diamond-drilling program resulted in the discovery

of one new kimberlite pipe, EG-01B. Kimberlite was intersected in drill hole

LDG04-05, an -90 degrees hole, from 23.40 meters to 74.70 meters. One

previously known pipe, EG02, was re-drilled and intersected from 14.30 meters

to 87.30 meters in drill hole LDG04-09, an -90 degrees hole. Representative

kimberlite samples totaling about 133 kilograms have been sent for       

micro-diamond processing to the Saskatchewan Research Council. The results

will be released on completion of the processing.

    As the sources of the kimberlitic indicator trains previously defined by

sonic and reverse circulation drilling at the Lac de Gras Project have yet to

be discovered, SouthernEra will continue testing selected airborne targets at

Lac de Gras during the upcoming winter season. To date, six kimberlites have

been discovered at the X Claims Project of which three are diamondiferous.

SouthernEra remains optimistic that through diligent exploration the source of

the kimberlitic indicator trains will be discovered.

    At the Yamba Lake Project, located 40 kilometers north of the Ekati mine,

a total of 104.5 line kilometers of magnetic and 20.43 kilometers of

electromagnetic (HLEM) ground geophysical surveys were completed to test 16

kimberlite-like airborne targets during April and May 2004. A summer drill

program completed in August tested six high interest ground geophysical

targets resulting in the discovery of a new kimberlite body.

    The kimberlite was intersected in two holes, in DDH-006, a -45 degrees

hole, from 76.6 meters to 77.6 meters, and in hole DDH-006A, a -60 degrees

hole, from 107.0 meters to 107.5 meters. In visual hand specimens, numerous

pyrope garnets up to 5 millimeters in diameter are readily apparent. The

kimberlite samples have been sent to the Saskatchewan Research Council for

micro-diamond testing and, pending the results, consideration may be given to

further drill testing the dyke-like body to establish its width along stike.

    In addition, a total of 119 till samples were collected to better define

existing kimberlitic indicator mineral trains where the sources have yet to be

identified. The results of these samples will aid in the selection of

additional targets to be drill tested. SouthernEra can earn a 60 percent

interest in the Yamba Lake Project by completing a bankable feasibility study

by the end of 2006. Under certain project financing arrangements, SouthernEra

can increase its interest to 65 percent.

    At the Back Lake Project, the diamond exploration program remains focused

on discovering the kimberlite body sources to the North Margaret Lake and

South One kimberlitic indicator mineral trains. The North Margaret Lake

indicator train is up to 300 meters wide and seven kilometers long with

individual till samples returning up to 159 kimberlitic indicators. The South

One train is approximately 250 meters wide and four kilometers long.

    The spring 2004 program at Back Lake consisted of establishing 21 ground

grids with 101 line kilometers of magnetometer surveys and 9 kilometers of

electromagnetic surveys completed on the grids. The program defined five

potential kimberlite targets. Three of the five targets were selected for

drill testing following ground proofing during the summer. Follow-up drill

testing of the three targets did not intersect kimberlite. It now appears that

the kimberlite body sources to the two indicator trains may have very subtle

or no geophysical signatures. In order to discover the kimberlite sources to

the two indicator trains the exploration methodology is currently focusing on

narrowing down the kimberlite pipe source areas using detailed grid and infill

till sampling. Three grid areas were selected and sampled with the collection

of 202 till samples. The results of the summer till sampling program are

expected by year-end.

    SouthernEra's other Northwest Territories projects include:

    -   WO Project, where Peregrine Diamonds are proposing to bulk test the

        known DO-27 kimberlite pipe;

    -   Commonwealth Project, where Diavik Diamond Mines have collected about

        75 tonnes from each of the C12 and C13 kimberlite pipes (results are

        pending);

    -   Monument Project, where the known diamondiferous DO42 kimberlite will

        be further tested; and

    -   Kidme Project, where the collection and processing of till samples

        for kimberlitic indicators is progressing.

 

    Canada is one of five countries in which SouthernEra is engaged in

extensive diamond exploration. Others include South Africa, Gabon, the DRC and

Australia. This represents the fourth most active global diamond exploration

program after the majors DeBeers, BHPB and RTZ. The Company also operates the

Klipspringer Diamond Mine in South Africa and maintains an 18 percent     

free-carried interest in the Camafuca Diamond Project in Angola.

    Mr. Uwe Naeher, Professional Geologist, is the qualified person, under

NI 43-101, responsible for the technical information in this release.

 

    Some statements contained in this news release are forward-looking and,

therefore, involve uncertainties or risks that could cause actual results to

differ materially. Such forward-looking statements include comments regarding

exploration work. Actual results could differ materially from those

anticipated. The Company disclaims any obligation to update forward-looking

statements.

 

    For further information: SouthernEra Diamonds Inc.: Patrick C. Evans,

President and CEO; or Howard Bird, Vice President Exploration; Telephone:

[phone], Fax: [phone], e-mail: [e-mail]

    (SDM. SRE)