Drilling Report

SouthernEra Commences Drill Testing of its Hope 1 Kimberlite Target

    in South Africa

 

           Second Kimberlitic Indicator Anomaly also Defined at

                       the Hope Diamond Project

    Shares Issued and Outstanding: 85,335,411

    TSX: SDM

    AIM: SRE

 

    TORONTO, Sept. 22 /CNW/ - SouthernEra Diamonds Inc ('SouthernEra')

(TSX: SUF, AIM: SRE) announced today that the Company has commenced

exploration drilling on the Hope Diamond project in South Africa. This drill

program is designed to test the Hope 1 kimberlitic indicator mineral anomaly

discovered by the Company during May 2004. In addition, SouthernEra has this

month also defined a second kimberlitic indicator anomaly at the Hope Project,

called Hope 2.

    The Hope Diamond Project permit was awarded to SouthernEra on March 31,

2004 and covers 1,110 hectares of State owned mineral rights in South Africa's

Limpopo Province. The project is located within one of SouthernEra's priority

regional diamond target areas on the Kaapvaal Craton and is focused along the

same regional structural lineament that controlled the emplacement of

SouthernEra's well-known Marsfontein diamondiferous kimberlite cluster. The

Marsfontein Diamond Mine, built and operated by SouthernEra in joint venture

with DeBeers in 1996, produced US$246 million in revenue in less than two

years.

    Since the granting of the permit, a regional exploration program at the

Hope Project commenced immediately after Easter with the collection of loam

samples for the recovery of kimberlitic indicator minerals. To date 2,166 loam

samples have been collected of which 1,107 have been processed at

SouthernEra's in-house kimberlitic mineral recovery laboratory in Polokwane,

South Africa. The program has resulted in the discovery in May of a

significant kimberlitic indicator mineral anomaly named Hope 1, and the

additional discovery this month of the indicator anomaly Hope 2, located

approximately 2 kilometers from Hope 1.

    Infill loam sampling on the Hope 1 target has defined an anomalous      

4-hectare kimberlitic indicator mineral area hosting pyrope and eclogitic

garnets, spinel, picro-ilmenite and chrome diopside. Twenty-one percent of the

garnets recovered indicate that they are derived from a high interest calcium

poor harzburgitic source with G10 chemistry. A diamond-drilling program has

now commenced to test this potentially diamond bearing kimberlite target.

    Two loam samples spaced 100 metres apart from the Hope 2 anomaly have

returned 30 pyrope garnets. Infill loam sampling has been completed to further

define Hope 2 and results are pending. In addition, a magnetic horizontal

gradiometer helicopter-borne survey at a 50 metre line spacing has been

completed over the entire permit area resulting in the definition of numerous

bulls-eye magnetic targets that are currently being followed-up.

    Commenting on developments at the Hope Project, SouthernEra President and

CEO Patrick Evans said: 'Progress at the Hope Project has been dramatic in a

very short period of time. In just five months since our Prospecting Permit

was issued we have moved from grass-roots regional sampling to successfully

defining drill-ready kimberlite targets to the commencement of exploration

drilling'.

    Mr. Evans added: 'This is representative of the success of SouthernEra's

regional exploration program in South Africa which is based on regional

geological modeling and analysis. This program is producing a number of

exciting early stage positive results indicative of kimberlite targets that

are being fast-tracked to discovery.'

    In applying for the diamond prospecting permit, SouthernEra has satisfied

the requirements of South Africa's new Mining Charter. SouthernEra has

concluded a joint venture heads of agreement with a Black Economic Empowerment

(BEE) consortium comprising of Imbewu Mineral Resources (Pty) Limited and Ten

G's Investments (Pty) Limited who jointly will hold a 30 percent participating

interest in the Hope project. In addition, a 5 percent interest in the

projects will be set aside for a community development trust that will be

established in the event that a mine is found and developed within the project

area. The trust will provide for social and economic development in the area

of the mine. Through this Joint Venture, SouthernEra meets all the

requirements under the Mining Charter, including the implementation of a

technical skills transfer program relating to exploration, development and

mining activities.

    South Africa is one of five countries in which SouthernEra is engaged in

extensive diamond exploration. Others include Canada, 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.

    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: PLEASE CONTACT: SouthernEra Resources Limited,

Howard Bird, Vice President, Exploration, or Sharon Allan, Investor Relations,

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

inbox(at)southernera.com, www.southernera.com

    (SDM. SRE)