DiamondWorks (DMW)

[TadeuszA]

News - new diamond licence for DMW - Tongo fields.

VANCOUVER, April 2 /CNW/ - DiamondWorks Ltd ("the Company") is pleased to
announce that Koidu Holdings SA ("KH") has been awarded the exclusive licence
for the prospecting and mining of the Tongo diamond fields in Sierra Leone.
The Tongo fields are located in the Kenema district of the Eastern
Province of Sierra Leone, approximately 48 kilometres south of KH's Koidu
mine. The license area comprises approximately 89 square kilometers with four
known parallel kimberlite dyke zones transversing the licence area. The dyke
zones contain a number of known small kimberlite pipes or blows.
Alluvial diamonds were discovered in the Tongo area in 1953 and alluvial
diamond mining since then has reportedly produced in excess of 4 million
carats from the area, the established kimberlite source of the alluvial
diamonds being the dyke zones on the Tongo fields.
KH was awarded the licence to explore for diamonds in the Tongo Fields
under an open tender held by the Sierra Leone Government. In terms of
legislation prevailing in Sierra Leone, the successful tenderer awarded the
licence is guaranteed a Mining Lease for the area upon successful completion
of an evaluation and development programme within two years.
The close proximity of existing Koidu Mine infrastructure, including its
50 ton per hour treatment plant, will facilitate the fast track evaluation and
development of the Tongo Fields, making KH uniquely capable of conducting this
programme.
In order to both ensure the obtaining of the necessary licence to the
Tongo Fields and to facilitate a rationalization of its interest in Sierra
Leone into a single vehicle which will allow the simultaneous fast track
evaluation and development potential of all the Company's Sierra Leone diamond
resource assets, DiamondWorks has introduced its remaining Sierra Leone assets
to KH and a third equity partner has been admitted to KH, BSG Resources
Limited ("BSG"). The assets introduced by DiamondWorks to KH comprise
exploration licenses held by its subsidiary, Branch Energy Ltd, in the upper
and middle Sewa and Matemu areas.
BSG have acquired a 25% interest in KH principally from Magma Diamond
Resources Limited ("Magma") in a private arrangement, with DiamondWorks and
Magma's interests reducing from 50% each to 40% and 35% respectively,
DiamondWorks remaining the largest shareholder and having received a
consideration of US$4 million for facilitation of the expansion arrangements.
James Campbell has been appointed by the parties as Executive Chairman of KH
to manage all mining and development activities in Sierra Leone. James
Campbell is a former executive director of Anglo American PLC and former
director of De Beers. The equity partners in KH are required to immediately
begin funding, in proportion to their shareholding in KH, the simultaneous
fast track evaluation and development of all diamond resource assets in Sierra
Leone.

DiamondWorks Chairman, Brian Menell, in commenting on the award of the
Tongo Fields licence said:-

"The award of the Tongo Fields licence to our joint venture in Sierra
Leone is a major expression of confidence in our abilities by the Government
of Sierra Leone following the successful and fast re-development of the Koidu
Kimberlite mine, which is now in production. Pooling all our Sierra Leone
assets into a single vehicle with our partners in Sierra Leone and with their
considerable technical and financial resources underpinning our own, will
better serve the quickest possible bringing to account for DiamondWorks'
shareholders a return on their investment in Sierra Leone. Attempting to more
slowly do it ourselves would have resulted in a reduced ability to bring
additional mines to the production stage and would have significantly raised
our investment risk profile in Sierra Leone. This rationalization, on the back
of the award of the Tongo fields, puts under one management a considerable
diamond resource asset, one of the best available anywhere and creates synergy
to ensure a better and faster return, with lower risk to shareholders."
DiamondWorks is a mining and mineral exploration company engaged in the
acquisition, exploration, development and mining of diamond and other mineral
properties. The Company's principal mineral properties are located in Sierra
Leone, Angola and Central African Republic. The company's wholly owned
subsidiaries, Otterbea International (Proprietary) Limited and Petroplus
Africa Limited, specialize in commodities trading, the supply and sale of
crude oil and refined petroleum products and procurement and logistics for the
mining industry in Africa.

This news release contains forward-looking statements that are subject to
various risks and uncertainties. The Company's actual results could differ
materially from those anticipated in such forward-looking statements as a
result of numerous factors that may be beyond the Company's control. Forward-
looking statements are based on the expectations and opinions of the Company's
management on the date the statements are made.

For further information: please contact Rob Rainey in Johannesburg at
telephone [phone], Fax [phone], or email:
[e-mail]; Hill & Knowlton: contact Boyd Neil in Toronto at
telephone +[phone], Fax+ [phone],
[e-mail]