Drilling Report

SouthernEra Joint Venture Completes Drill Testing at the

Yilgarn Diamond Project in Australia

 

    Shares Issued and Outstanding: 85,335,411

    TSX: SDM

    AIM: SRE

 

    TORONTO, Sept. 27 /CNW/ - SouthernEra Diamonds Inc ('SouthernEra') (TSX:

SDM, AIM: SRE) announced today that the SouthernEra/Caldera Joint Venture has

completed the first phase drill program at the Yilgarn Diamond Project in

Western Australia.

    During August 2004, a reverse circulation (RC) drilling program was

completed at ten high priority, isolated dipolar aeromagnetic targets for a

total of 656 meters. Preliminary field examination of drill chips at one

anomaly necessitated drilling a second deeper hole to 82 metres to obtain

additional material for laboratory work. Some of these drill targets are

situated approximately 30 kilometres from the diamondiferous Jewill

kimberlites.

    The Yilgarn Diamond Project is located in the Proterozoic Earaheedy Basin

kimberlite province of Western Australia. This province hosts the Jewill and

Nabberu kimberlite fields which both contain diamondiferous kimberlite pipes.

The Jewill kimberlites were discovered by CRA Exploration (now Rio Tinto

Exploration) in 1989 and comprise four kimberlites, two of which are

diamondiferous. The Nabberu field, which was discovered by De Beers during

1991-92, hosts twelve kimberlites, four of which are diamondiferous, and an

unknown number of lamprophyres.

    The SouthernEra/Caldera Joint Venture selected the project area on the

basis of known diamondiferous kimberlites in a region encompassing numerous

structural lineaments, and a number of unresolved indicator mineral anomalies,

including micro-diamond occurrences. In early 2003, UTS Geophysics of Perth

completed 100 metre line-spaced aeromagnetic surveys for a total of 7,600 line

kilometres. During 2003, selected magnetic airborne targets, indicative of

possible pipe-like body intrusions, were followed-up with a loam-sampling

program. This resulted in the recovery of kimberlitic spinels at eight of the

ten targets drilled during August 2004. In addition, rock float collected at

one of the targets is of possible kimberlite/lamproite origin. The positive

follow-up exploration results led to the application of further exploration

licenses in late 2003. These licenses cover approximately 1,200 square

kilometers of ground considered prospective for new diamond discoveries.

    Laboratory work on the drill material has commenced. This includes multi-

element geochemical analysis by Ultratrace Laboratories in Perth and

processing of heavy mineral concentrates for kimberlite indicator mineral

recovery carried out by Western Geochem and Diatech Heavy Mineral Laboratories

in Perth. Should results be positive, larger drill samples will be processed

for micro-diamonds. Results of the laboratory work will be published once

received.

    SouthernEra has earned a 51 percent interest in the Joint Venture by

expending C$1,000,000 over a four year period. The partners continue funding

the Joint Venture on a 51% (SouthernEra) and 49% (Caldera) contributing basis.

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

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

Africa. This represents the fourth most active global diamond exploration

program after the majors DeBeers, BHPB and Rio Tinto. 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. Martin Jackson, a member of the Australian Institute of Mining and

Metallurgy (MAusIMM: Membership No. 210861), is the qualified person

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 Resources Limited: Howard Bird,

Vice President Exploration, or Sharon Allan, Investor Relations, Telephone:

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

www.southernera.com

    (SDM. SRE)