Final Approval for Camafuca Diamond Project

Angolan Government Provides Final Approval for Camafuca Diamond Project

 

    Shares Issued and Outstanding: 102,066,601

    TSX: SDM

    AIM: SRE

 

    TORONTO, Aug. 8 /CNW/ - SouthernEra Diamonds Inc. ("the Company")

(TSX: SDM, AIM: SRE) announced today that it has been advised by the state-

owned national diamond mining company of Angola, Endiama, that the government

has provided final approval and ratification for the formation of the

operating company "Sociedade Mineira do Camafuca Lda " (SMC), which will be

issued the mining licence for the Camafuca Project allowing construction of

the project to commence.

    The Chairman of SouthernEra Diamonds Dr Chris Jennings said: "The news

from Luandais a much welcomed development and we look forward to commencing

the Camafuca Project with our partners in the very near future. This will once

again allow SouthernEra to become a diamond producer in line with the overall

objective of remaining a fully integrated diamond mining and exploration

company."

    Camafuca is one of the largest known undeveloped diamond-bearing

kimberlite complexes worldwide and is located in the Lunda Norte province in

north-eastern Angola 20 kilometres southeast of the town of Lucapa. The

project area covers the outcropping primary kimberlite deposits associated

with the five Camafuca-Camazambo kimberlite pipes with a combined surface area

of 160 hectares.

    Through a feasibility study completed in 2000 SouthernEra defined an

inferred mineral resource from surface to a depth of 145 meters of      

209.5 million cubic meters at an average grade of 0.111 carats per cubic

meter, for a total resource of 23.25 million carats. An independent valuation

in 2000 attributed an average value to the Camafuca diamonds of $109 per

carat. Since then, global rough diamond prices have increased by more than 

35 percent. The Company holds an 18% free-carried interest in the project.

    The 2000 feasibility study was concluded while Angola was still in a

state of civil war and reflected inflated operating costs associated with the

circumstances prevailing at the time. Angola's civil war ended in 2002 and

many of the cost parameters of the feasibility study will consequently have

changed materially. The 2000 feasibility study is the most recent report on

the property and will now be updated to reflect current operating conditions.

    The first meeting of the SMC partners is planned for mid August when the

process for the formation of the operating company will be confirmed and

timelines determined for the construction of the project. Information

regarding the operating parameters and construction schedule will be announced

as soon as updates are complete and ratified by all the partners.

    The Company also operates the Klipspringer Diamond Mine in South Africa

which is currently on care and maintenance and is engaged in advanced diamond

exploration in the DRC, Canada, South Africa, Gabon, Zimbabwe and Australia.

 

    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: Toronto: SouthernEra Diamonds Inc., Alasdair

MacPhee, President & CEO (acting), or Sharon Allan, Investor Relations,

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

inbox(at)southernera.com; London: 4C-Burvale, Carina Corbett, Director,

Telephone: ++ 44 (0) 207-907-4761, Fax: ++ 44 (0) 207-907-4769, Email:

corbett(at)4cburvale.co.uk

    (SRE SDM.)


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