Diamond Exploration Report

Tertiary Minerals PLC
04 November 2004



                             TERTIARY MINERALS PLC

                      POSITIVE REPORT ON DIAMOND POTENTIAL
                     OF NEWLY DISCOVERED KIMBERLITE CLUSTER

   • Study Confirms Kimberlites Sampled Diamond-Favourable Source Rocks

   • Claim Holding Extended To Total 30 Untested Targets

   • Possible Link To Russian/Arkhangelsk Diamond Fields

Tertiary Minerals plc ('the Company') is pleased to report the positive findings
of an independent study on the diamond potential of its Kuusamo kimberlite
project in Northern Finland.

The report has been prepared by an international kimberlite specialist at the
Geological Survey of Finland (GTK). The data in the report is based on
relatively limited sampling of the three kimberlites discovered so far but
supports the following important conclusions:

- the geological conditions considered necessary for the occurrence of
  diamondiferous kimberlites occur in the Kuusamo area

- the newly discovered kimberlites have tapped the diamond stability field
  of the earth's mantle

- the mantle tapped by the kimberlites contain both types of potential
  diamond-hosting mantle materials - harzburgite and eclogite and the mantle has
  not been affected by diamond destroying processes.

The statistics for kimberlite clusters show that any given cluster can contain a
spectrum of kimberlite from those containing no microdiamonds to those with
commercial diamond contents. Similarly individual kimberlite intrusions can be
multi-phase, with some phases containing diamonds, others none.

The GTK report concludes that the lack of micro-diamonds in the kimberlite
samples tested to date does not necessarily limit the prospectivity of any
future kimberlite discoveries in the area.

The report also concludes that the results are ....'exciting in that it is
likely that an entirely new cluster of kimberlites (the Kuusamo cluster) has
been discovered' and that typically there are 10-50 kimberlites in a cluster.

Tertiary considers that the results of the GTK study considerably enhance the
potential of the untested targets in the Kuusamo area. The company has recently
expanded its claims and claim reservations and now has a further 11 targets
(total of 30) under claim or claim reservation in addition to Kalettomanpuro and
Kattaisenvaara and existing data strongly suggest that more kimberlites will be
discovered.

The report speculates that the Group I Kuusamo kimberlites may have a similar
Devonian age to kimberlites found near Arkhangelsk in Russia, also in the
Karelian Craton that includes the Lomonosov diamond project run by Alrosa and
the highly diamondiferous Grib pipe.

This speculation is based principally on the position of the Kuusamo cluster on
the southern margin of the same Devonian kimberlite and alkaline province that
stretches for over a 1,000 km from Northern Finland through the diamond bearing
regions of Kandalaksha, Terskii Bereg, Arkhangeslsk and Central Timan in NW
Russia.

For further information please contact:
Patrick Cheetham, Executive Chairman, Tertiary Minerals plc. Tel: [phone]
Ron Marshman/John Greenhalgh, City of London PR Limited. Tel: [phone]

Technical Note (to accompany New Release of 4 November 2004)

The background to Tertiary's new discoveries is given in various news releases
made since January this year. Three separate kimberlites have been intersected
in drilling - two at the Kalettomanpuro (KP) site and one at Kattaisenvaara (KV)
some 20km away.

It is accepted wisdom that many diamonds (a form of carbon) grew as crystals in
the primeval earth as all harzburgitic diamonds are over 3 billion years old.
Over time diamonds are only preserved where diamond is stable in preference to
graphite (at high pressure and relatively low temperature) and this is usually
beneath the old stable parts of the earth's crust ('cratons') where there is a
thick, cool and stable lithospheric mantle keel - the so-called 'diamond
stability window'. In such windows diamonds are found in mantle containing the
rock types harzburgite or eclogite. For diamonds to be found at the surface
kimberlitic magma must have risen to the surface through the diamond stability
field of the mantle, on the way collecting pieces of the diamond host-rocks,
harzburgite and eclogite. As the kimberlite magma ascends these pieces are
disrupted, liberating the diamonds. The kimberlite magma must ascend rapidly
enough so that the diamonds are preserved in otherwise unstable conditions in
the crust.

Thus there are two main pre-requisites for the occurrence of diamonds at or near
the earth's surface:

   • Favourable mantle conditions for diamond preservation through geological
    time (a source of diamonds)


   • A transport medium (kimberlite magma) that taps the diamond stability
    field and both collects and preserves the diamonds.

As kimberlites are the main transport medium, a study of the mineralogy and
mineral chemistry of kimberlites in any given cluster will provide information
on whether that cluster has diamond potential.

The main technical findings of the GTK study are as follows:

- The proximity of the Group I kimberlites to Devonian (365 Ma) alkaline
  complexes, in particular the Iivaara intrusion, raises the possibility that
  these new kimberlite discoveries are similar in age to those found near
  Arkhangelsk in Russia

- The Group II Kalettomanpuro kimberlite has petrological similarities to
  the kimberlites in the 1200 Ma Kuhmo cluster, an area currently being explored
  by European Diamonds Plc and Karelian Diamond Resources Plc, some 150km to the
  south

- The mineralogy and chemistry of phlogopite mica in the kimberlites
  confirms the original identification as hypabyssal Group I and Group II
  kimberlites (end member types of kimberlite, both can contain diamonds)

- The Group II kimberlite from Kalettomapuro contains significant amounts
  of G10 (harzburgite) garnets and G9 (lherzolite) garnets and a high ratio of G10
  /G9. As harzburgite is known to be one of the main diamond source rocks, this
  indicates a high diamond potential

- Compositional data and thermobarometry studies indicate that
  mantle-derived G10 garnets are derived almost exclusively from the diamond
  stable portion of the earth's mantle

- The Group I kimberlites contain both eclogite grains and eclogite
  xenoliths (eclogite in the mantle is the other main source for diamonds). So
  far, however, these are of relatively low sodium garnet type

- Picroilmenite and pyrope garnet compositional data indicate that
  metasomatism has not significantly affected the mantle - another positive factor
  for diamond preservation

- Chromites for the KV Group 1 kimberlite plot in compositional fields
  that indicate shallow sampling

- Group 1 kimberlites so far examined show evidence of fractionation
  implying slower transport to the surface which, in the case of these kimberlites
  only, suggests any contained diamonds may have been resorbed

NB For a more complete overview of diamond formation and deposition, including
illustrations, see http://earthsci.org/mindep/diamond/diamond.html

                      This information is provided by RNS
            The company news service from the London Stock Exchange