Company Information for North Australian Diamonds Ltd

ASX-NAD

www.nadl.com.au

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ASX; NAD

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Company Statement

North Australian Diamonds Limited (NADL) has embarked on a strategic repositioning designed to capture the potential of the 100% owned Merlin diamond deposit in the Northern Territory and the company's extensive exploration holdings in the north of Australia.

The transition of North Australian Diamonds from a successful junior explorer to an emerging diamond producer is under way, with production from Merlin now making NADL the third diamond producer in Australia. This is a significant development in NADL's history and bodes well for both the short and longer-term value of NADL.

Current Operations

Merlin Diamond Project
North Australian Diamonds Limited acquired 100% of Mining Lease 1154 covering the former Merlin Diamond Mine operations in the Northern Territory from Ashton Mining Limited (a wholly owned subsidiary of the Rio Tinto Group) in 2004. This acquisition built on the Merlin Orbit exploration tenements which had been previously acquired from Rio Tinto.

The project is situated approximately 75km SSE by road from McArthur River, 80km due south by air from the town of Borroloola and 720km SE of Darwin in the Gulf Region of the Northern Territory.

The Merlin diamond field comprises 14 kimberlite pipes, grouped into four clusters. Twelve of the pipes, all subject to either open pit mining or testing, are located within the mineral lease MLN1154, which was granted on 15th June 1998.

Merlin diamonds are known for the brilliant white colour and large size. The largest diamond ever found in Australia, a 104.73 carat white gem quality stone, was recovered from Merlin and was valued at approximately US$525,000 in 2002. Recently NADL sold a 10.60ct gem stone for A$201,672.

In line with world increases in diamond prices a recent revaluation of Merlin goods indicates a 30% increase in price to approximately US$140 per carat. The prognosis for rough diamond prices over the next 10 years is very favorable with annual increases of 5% predicted due to declining production from current world reserves and demand for diamonds increasing.

Seppelt Project
The Seppelt Project comprises a number of related kimberlite dykes, blows and pipes constrained within a narrow corridor over a strike length of some 6km.

Seppelt 2 is a kimberlite pipe comprised of both weathered kimberlite and infill gravels. The gravels have a variable grade and persist to a depth of 36m. Beneath the gravels is weathered kimberlite with a grade of 211cpht. The Seppelt 2 pipe has an inferred resource of 200,000t to 200m depth. The largest diamonds recovered to date includes one 8.5ct and one 6.3ct diamond. The 8.5ct diamond being a clear, white and of gem quality and valued at US$1,500 per carat (US$12,600). The Seppelt pipes continue to have economic potential, but this can not be realized at current diamond price levels.

Ongoing exploration at Seppelt is focused on the discovery of kimberlites within the already identified Seppelt structural corridor as well as the orbit area. Exploration to date has identified a number of areas where both indicator minerals and commercially sized diamond occurrences remain unresolved. These include the Coolabah, Collison, and Collison North areas.

Arnhem Land
North Australian Diamonds entered into a farm-in agreement with De Beers Exploration Australia Limited (DBAE) to earn 100% interest in tenements covering 13,000sq km. In 2007, North Australian Diamonds acquired the contractual right to obtain an 80% interest in 4 new tenements covering approximately 5,300sq km in the western region of Arnhem Land. When combined with tenements held 100% by NADL, the total project area covers in excess of 27,000sq km in the Arnhem Land region of the Northern Territory. The project area covers thirty-nine separate tenements of which thirteen are currently held under veto status. These tenements have in part been held by DBAE since 1979, however due to veto restrictions imposed by Aboriginal groups, no exploration has been conducted. Four of the tenements, totaling 1,800sq km, are available for immediate exploration.

The Arnhem Land project is located within an Aboriginal Reserve Area and consequently has only been subjected to sporadic and limited exploration efforts. In recent times the sentiment within aboriginal communities towards exploration and mining activities has been positively changing and access is being obtained for areas which were previously deemed inaccessible. The company continues to actively engage with the traditional owners in Arnhem Land to progress tenement applications to grant. In the past 12 month period NADL has made significant progress in accessing its Arnhem Land tenements including receiving ‘consent to negotiate’ status for 11 tenements. NADL is confident that access to most tenements is possible in a reasonable timeframe.

These tenements represent one of the few remaining un-explored areas of Australia and are considered to be prime targets for a number of commodities, including uranium, base metals and diamonds.

Geographical Spread

Northern Australia

Board of Directors and Key Management

Mr John David Hopkins	(Chairman)
Mr Tom Reddicliffe	(Director, CEO)
Mr Glenister Lamont	(Non Exec. Director)
Mr Richard Dickson	(Non Exec. Director)
Mr Ian Richer	(Non Exec. Director)

Company Address

Level 1, 30 Terrace Road
EAST PERTH, Australia 6004


Telephone:	61 8 9221 3355
Facsimile:	61 8 9221 1730
Email:	info[at]nadl.com.au
Website:	http://www.nadl.com.au

Capital

1,070M - Ordinary fully paid shares

Annual General Meeting

November

Year End

30th June

Most Recent Statement

29/04/08 - Quarterly Report
28/04/08 - PalSac Diamond Resource Extended to 752m depth
14/04/08 - PalSac Pipe Resource Increased
10/03/08 - Drilling Results
24/01/08 - Quarterly Report
04/09/07 - HIGH GRADE KIMBERLITE PHASE IN PALSAC PIPE

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