Drilling Report

SouthernEra Diamonds - Positive developments in all key exploration

    projects worldwide

 

    Shares issued and outstanding: 128,343,101                               

    TSX: SDM

    AIM: SRE

 

    TORONTO and LONDON, March 1 /CNW/ - SouthernEra Diamonds Inc. (TSX: SDM,

AIM: SRE;) today provided an update of the Company's worldwide diamond

exploration activities. SouthernEra is a leading fully integrated

international diamond company and now has one of the world's largest diamond

exploration programs after BHP Billiton, De Beers and Rio Tinto.

    Against a market backdrop where many existing diamond mines are coming to

the end of their useful production lives and where there is increasing global

demand for diamonds, particularly from emerging economies in Asia and the Far

East, the discovery of new high quality diamond mines is key. SouthernEra

Diamonds has intensive exploration programs under way in five of the world's

most prospective diamond producing regions - Canada, Democratic Republic of

Congo (DRC), Gabon, Zimbabweand South Africa. The Company has proven success

in these types of undertaking having built and operated two successful diamond

mines - Klipspringer and Marsfontein in South Africa.

    Alasdair MacPhee, President and CEO of SouthernEra, said, "We have

reached a key moment in the development of our business where we have near

term production goals with our Camafuca mine in Angola and we are proceeding

with alluvial evaluation in the DRC. In areas such as the DRC, Canada and

Gabon, we are making encouraging progress towards our objective of discovering

major economic kimberlites. As a result 2006 promises to be an exciting year

for the company."

    In each of its key markets, the Company has made exciting progress in the

last year:

 

    Canada

    Since 1992 SouthernEra, together with its partners, has discovered over

50 kimberlite pipes in the Northwest Territories (NWT). Today SouthernEra

still has one of the largest active programs focused on two areas: the Lac de

Gras Kimberlite Field, host to Canada's two existing diamond mines Diavik(TM)

and Ekati(TM) and, second, the Southern Kimberlite Field that hosts De Beers'

Snap Lakeand Gahcho Kue diamond deposits.

    Most of the projects in these regions are at the advanced exploration

stage with a bulk sampling program currently testing the DO-27 kimberlite pipe

on the WO Project and with up-coming exploration drill testing programs to be

conducted during the second quarter 2006 on at least three projects, Yamba

Lake, Crown East and the Kidme Project.

 

    Democratic Republic of the Congo (DRC)

    Since 2003, with the advent of the new World Bank-sponsored Mining Code

and an investor friendly environment in the Democratic Republic of Congo

("DRC"), SouthernEra has secured an outstanding portfolio of 44 exclusive

diamond exploration permits covering more than 13,000 square km in the

diamond-rich Kasai Provinces, which has produced two of the 'top-ten' largest

gem-quality diamonds in the world and is producing up to 20 million carats of

diamonds per year. Most of the permits lie in a 'kimberlite emplacement

corridor' that extends from the renowned diamond-producing Lunda Norte

Province in neighbouring Angola, northeast into the DRC. The section of this

corridor in the DRC has yet to be fully explored with only 11 kimberlites

identified as opposed to over 700 in the Angolan section. This corridor is

regarded as the world's most prospective and largest new diamond exploration

opportunity.

    In a joint venture formed in October 2005 with BHP Billiton ("BHPB") on

39 of SouthernEra's 44 permits, exploration has commenced for primary diamond

deposits. Preliminary sampling results have returned kimberlitic indicator

minerals from numerous samples. Some of the samples contain diamonds. An

additional aeromagnetic survey, covering the remaining permit areas is

scheduled for mid-2006 and a core drilling rig is currently being sourced in

Canada to be shipped to the DRC to test selected targets in 2006.

    SouthernEra has also secured high interest alluvial diamond permits

within the Tshikapa/ Kasai/Luebo alluvial diamond field in the Kasai-

Occidental Province, and also within a second major alluvial diamond field in

the Kasai-Oriental Province. Testing in these regions is at an advanced stage

with the objective of defining and developing a bulk mineable diamond

operation within the alluvial flat system. This aggressive alluvial-diamond

testing program will continue throughout 2006 with a view to commencing to

production towards the end of 2007. SouthernEra now has a fully established

exploration base in Tshikapa which includes a diamond recovery plant.

 

    Gabon

    SouthernEra has four diamond exploration permits in Gabon: the 100

percent owned Kango and Sud projects, the 95 percent owned M'bigou Project,

and the 60 percent owned and operated Makongonio Project in Joint Venture with

the Gabonese mining company Cogemat (35%) and Geoscan (5%). SouthernEra has

discovered 41 kimberlitic bodies in Gabon to date.

    The Company's exploration program during 2006 will focus on evaluating

the economic diamond potential of the known kimberlitic bodies and to continue

to follow up on positive kimberlitic indicator mineral stream sample results

that suggest additional bodies are to be discovered. Kimberlitic rock samples

from six separate bodies are currently being tested for micro-diamonds at SGS

Lakefield's laboratory in Canada. The results are anticipated in the 2nd

Quarter of 2006. Samples from a further 8 separate bodies are en route to

Canada for micro-diamond testing. In addition, numerous 10 to 50 tonne mini-

bulk samples will be collected from selected high-interest bodies for macro-

diamond testing. The results from these will be reported on as they become

available during 2006.

 

    Zimbabwe

    SouthernEra is working on the Tsholotsho project area which is

approximately 14,000 square km in size and is located in the same kimberlite

emplacement track as that of DeBeers' Orapa diamond mine in neighbouring

Botswana. SouthernEra has the potential to earn 100% interest in the project.

Systematic reconnaissance soil-sampling started in 2005, and has yielded

positive, high interest kimberlitic indicator mineral results. Consequently,

the kimberlite exploration program is being fast-tracked in 2006 with follow-

up sampling and geophysical surveys.

 

    South Africa

    An exploration program in the Limpopo Province has been very successful,

with the discovery of numerous, confirmed, kimberlitic indicator mineral

anomalies recovered along the same structural lineament that controlled the

emplacement of SouthernEra's well known Klipspringer and Marsfontein diamond

mine kimberlite cluster. Exploration activity on SouthernEra's Hope Project,

which covers 1,110 ha, has identified 2 significant kimberlitic indicator

mineral anomalies - one of which is approximately 4 ha in size. Testing will

continue in 2006. SouthernEra is expecting the granting of additional permits

within another proximal area which is considered to have similar high

potential.

 

    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.

 

    Notes to Editors

 

    Active projects - further details

 

    CANADA

 

    Within the highly diamond prospective Lac de Gras region of Canada, the

Company's program includes:

 

    The Yamba Lake Project, where SouthernEra can earn up to a 65% interest

and are the operators, a total of 8 diamondiferous kimberlite bodies have been

discovered to date. During 2005 a total of 149.02 line-km of magnetic and HLEM

ground geophysical surveys were completed over 26 airborne targets. In

addition, a total of 128 till samples were collected to further define four

high interest kimberlitic indicator mineral bearing areas. Five targets have

been selected for drill testing during the second quarter 2006.

    Within the Lac de Gras X-Claims project seven kimberlite pipes have been

discovered to date, of which five are diamondiferous. The primary kimberlite

sources to kimberlitic indicator mineral trains defined on the property have

not yet been discovered. The Company will conduct a high resolution (25m line

spaced) magnetometer survey of the entire claim block, particularly focusing

on the Diavik(TM) diamond mine kimberlite emplacement structural corridor

during March using a sled mounted magnetometer system. Targets generated from

the survey will be drill tested during the second quarter 2006. SouthernEra is

the operator and its interest in the Lac de Gras X-Claims is 60 percent.

    The WO Project, where SouthernEra has a 4.9% interest, currently contains

nine known kimberlite pipes, the largest of which is DO-27 which covers an

area in excess of 9 hectares. As reported previously a 151 tonne, mini-bulk

sampling program at DO-27 during 2005, revealed an average grade of 0.98

carats per tonne from five of six holes drilled (sample PDL-1). A sixth hole

returned an average grade of 0.70 carats per tonne (sample PDL-2). Based on

the encouraging diamond results a follow-up bulk sampling program commenced on

January 12th 2006 and is targeted to extract an approximate 3000 carat diamond

parcel to further define the pipes diamond grade and dollar per carat value.

The bulk sample will be extracted by mid-April, 2006 via large diameter (24")

RC drilling and processed during the second quarter at the Test Sample Plant

at BHP Billiton's Ekati(TM) Diamond Mine located 50km to the north west of DO-

27. More information regarding the bulk sampling program will be released as

the program progresses.

    In addition to the bulk sampling program at DO-27, the partners are

awaiting micro-diamond results from seven core holes drilled during the summer

of 2005 on the plus 3 hectares in size DO-18 kimberlite pipe located

approximately 700 metres to the north of DO-27.

    The Monument Project (SouthernEra 22.11% interest) hosts the

diamondiferous DD-17, DD-39 and DD-42 kimberlite pipes and one kimberlite dyke

(DD2002) located within the same structural trend that controlled the

emplacement of the economic pipes at the Ekati(TM) mine. In 2005 a thorough

review of the geochemical and geophysical data from 1994 was completed which

led to the decision to re-evaluate the DD-42 and DD-17 kimberlites. The

program included 94.02 line-km of detailed magnetic and HLEM ground

geophysical surveys and 11 holes (1292.8 m) of diamond drilling. The program

collected 1004 kg of kimberlite from the DD-17 pipe and 128 kg from the DD-42

kimberlite. Approximately 500 kilograms of kimberlite will be tested for micro-

diamonds. Further drill testing of the DD-39 kimberlite and several targets

west of DD-17 is being considered by the partners for the third quarter of

2006.

    Within the new Crown East Project (SouthernEra 100%) the company staked

25 claims during 2005 located about 30km to the east and northeast of the

Diavik(TM) mine to cover high-interest airborne geophysical kimberlite pipe

look-alike targets. Exploration will commence in April and will include ground

geophysics and drilling.

 

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

 

    The Kidme Project (SDM 60%) is operated by SouthernEra and is located to

the south and within the highly prospective structural kimberlite emplacement

trend of the De Beers/Mountain Province Gahcho Kue diamond deposit. The 2005

exploration program consisted of 79.85 line km of ground geophysics that

included magnetic, HLEM and gravity surveys over 18 airborne targets. Drill

testing of high priority targets is scheduled for April 2006.

    The Back Lake Project (SDM 60.4%), operated by SouthernEra, has produced

one diamondiferous kimberlite discovery and the Company is focused on

discovering the kimberlite sources to the North Margaret Lake and South-One

kimberlitic indicator mineral trains. In 2005 one geophysical target was drill

tested with negative results. The geophysical program included 76.59 line-km

of magnetic and HLEM ground geophysical surveying. Sampling included the

collection of 85 till samples and 726 geochemical samples for MMI (Mobile

Metal Ion Method) analysis. Additional ground geophysics and a drill program,

if warranted, are planned for the second and third quarter 2006.

    In the Superior Craton in Ontario, SouthernEra will continue a rigorous

exploration program in 2006. SouthernEra initiated two new diamond interest

project areas in 2005, the 100% owned Centenary and Trillion Projects.

Airborne targets were chosen from government high-resolution airborne

geophysical surveys that have been interpreted by SouthernEra with proprietary

methods.

    Within the Kirkland Lake-Temagami diamondiferous kimberlite emplacement

corridor in eastern central Ontario, 52 claims have been staked as part of the

Centenary Project. Regional and target sampling was conducted in the summer of

2005 to complement the existing Ontario government sampling in the area.

Ground geophysics was completed on 33 targets last spring and summer, and a

winter program completed in February 2006 covered 10 of the remaining targets.

Positive targets will be selected for Mobile Metal Ion geochemical sampling

this second quarter, the results of which will aid in the selection of drill

ready targets for a follow-up core drilling program.

    Within the Trillion Project SouthernEra has recently staked 46 claims

located to the west of the De Beers Victor diamond deposit in north western

Ontario. To expedite the progress of the program, sediment sampling was

conducted simultaneous to the claim staking and kimberlitic indicator mineral

picking results from samples processed at SouthernEra's in-house laboratory

are expected in the second quarter 2006. Winter ground geophysics, began in

late February and will initially cover 22 airborne targets. Follow-up sediment

sampling in conjunction with additional ground geophysics over the remaining

targets will be completed this summer to prioritize targets for drilling.

 

    DRC - Alluvial Activities

    SouthernEra has secured high interest alluvial diamond permits within the

Tshikapa/Kasai/Luebo alluvial diamond field in the Kasai-Occidental Province,

and also within a second major alluvial diamond field in the Kasai-Oriental

Province. In the Tshikapa area, SouthernEra has 70 to 100% interests in over

30km of diamond mineralized river frontage. The Belgium mining company,

Forminiere, mined approximately 14 million carats from the region up to 1955.

SouthernEra commenced testing both the active river channel and alluvial flat

system (floodplain) diamond potential in 2005. An 8 inch suction dredge test

sampled the active river channel with numerous samples returning encouraging

diamond grades previously reported on in 2005. During 2005 only the 2 to 4 mm

screen size fraction gravel samples were tested for diamonds with one sample

returning 164 diamonds from the 2 to 4 mm screen size fraction for a total

weight of 20.35 carats recovered from 2.89 tonnes. A recently commissioned X-

ray "Flow-sort" is on site and is now treating the coarse 4 to 16 mm sample

fraction range and is also reducing the back-log of gravel samples to be

treated. The active river program is progressing to define high interest

diamond bearing gravel deposits. A seismic geophysical survey is continuing to

test the 'alluvial flats' which will be followed by drill testing and pit

sample testing for diamonds. A drill to test the alluvial flat overburden and

potential diamond bearing gravel thicknesses is en route to the DRC.

 

    GABON

    Since the onset of exploration in Gabon in 1999, SouthernEra's regional

stream sampling activities revealed kimberlitic indicator mineral anomalies

which have resulted in the identification of geographically distinct diamond

interest regions.

    SouthernEra initially identified the Makongonio Project area in southern

Gabon based on the area's past production of the highest value and largest

alluvial diamonds in Gabon. In 2004, the likely sources to the high value

Makongonio alluvial diamonds were discovered. Over the past 2 years

SouthernEra has discovered 14 kimberlitic bodies within this permit area

including the first known pipe (approximately 1 hectare in size) in Gabon.

Some of the 'dyke-like' bodies have widths up to 21m, and sit within

kimberlitic structural emplacement corridors up to 15km in length. As

announced previously, 2 out of the 2 tested kimberlitic bodies proved to be

diamond bearing.

    SouthernEra's exploration program in Gabon during 2006 will focus on

evaluating the economic diamond potential of the known kimberlitic bodies and

to continue to follow-up on positive kimberlitic indicator mineral stream

sample results that suggest additional bodies are to be discovered.

Kimberlitic rock samples from six separate bodies are currently being tested

for micro-diamonds at SGS Lakefield's laboratory in Canada. A further 8

separate bodies are en route to Canada for micro-diamond testing. Two 50 tonne

bulk samples have already been collected and stored from the Mak-003 and Mak-

004 kimberlites. A suitable diamond recovery plant to process the bulk samples

was assembled in South Africa and is en route to Gabon. The plant

infrastructure is currently being constructed at camp and sample processing is

expected to commence during April/May.

 

    For further information: SouthernEra Diamonds Inc.: Alasdair MacPhee,

President and CEO or Howard Bird, Senior Vice President Exploration or Sharon

Allan, Investor Relations, Telephone: [phone], Fax: [phone],

E-mail: [e-mail], www.southernera.com; London: 4C-Burvale,

Carina Corbett, Director, Telephone: ++44 (0) 207-907-4761, Fax:

++44 (0) 207-907-4769, Email: [e-mail]

    (SDM.)