Company Information for African Diamonds Plc

AIM-AFD

www.afdiamonds.com

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AIM; AFD

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Company Statement

African Diamonds plc is incorporated in England. The Company was established to develop diamond mines in Botswana and West Africa. The target is to have a producing mine within three years. Having a balanced portfolio of projects will help reach the objective. The current portfolio of the Company consists of:

JV in Botswana with De Beers to fast track the development of our licences to our goal of large gem stone quality diamond mine;
late stage exploration projects which are known to contain diamonds or diamond indicator minerals; and
early stage high potential concessions, both alluvial and hardrock.

Corporate History

The company came into existence in 2000 as Zinquest plc, an unlisted UK plc set-up to explore and exploit mineral reserves. In Febuary 2002 it changed its name to African Diamonds plc.
June 2002 - African Diamonds acquired Grampian Resources which holds two licenses to explore Guinea, and subsequently obtained an exploration license in its own name for the same region.
July 2002 - African Diamonds acquired Kukama, which holds three licenses in Botswana.
August 2002 - African Diamonds acquired from a local Sierra Leone company three highly prospective licences in Sierra Leone
14th July 2003 - African Diamonds successfully lists on the Alternative Investment Market (AIM).
15th December 2003 - First diamond found in Botswana.
1st March 2004 - Awarded mining licence in SL to diamondiferous tailing of old Plant 11 in Sierra Leone.
26th February - Became the first Diamond Exploration company to listed on the Botswana Stock Exchange
April 2004 - Entered in a JV with De Beers to explore and develop African Diamonds Botswana kimberlites and licences.
Dec 2004 - Discovery of kimberlite pipe AK6 in Orapa Botswana.

Current Operations

Boteti Joint Venture

Boteti Joint Venture formed 2004. The AK6 discovery was in October 2004
Share 49/51. AFD/ DB changing to 30/70 on completion of the first Bankable Feasibility Study (BFS).
De Beers pay 100 % of all costs until bankable feasibility thereafter each side pays its way.
All diamond production contracted to the Diamond Trading Company (DTC).
Mines with annual revenue of less than $70m will be operated by African Diamonds who will receive 70% of the gross profit. Diamonds still go to the DTC.

To date:

c.500 holes totalling c.50 kms have been drilled
1 significant economic discovery made
1 kimberlite is being evaluated
6 kimberlites are being bulk sampled
c.100 anomalies remain to be assessed

Ownership of the joint venture will initially be 49% African Diamonds and 51% De Beers with De Beers funding the joint venture through to bankable feasibility study. De Beers' shareholding will rise to 70% upon completion of the first bankable feasibility study. The size of any mine resulting from the joint venture will decide whether it is managed by De Beers or African Diamonds with larger mines operated by De Beers and those below an agreed threshold operated by African Diamonds, who will receive a preferential profit share in those operations of Newco.

AK6
AK6 is one of 30 known kimberlites which are part of the Boteti joint venture in which African Diamonds holds 49% and De Beers holds 51%.
The highlights of the first phase of advanced exploration were:

An average grade of 25 carats per 100 tonnes.
Estimated value per carat of US $138.
A kimberlite pipe size of approximately 10 hectares from drilling to date.
The Mineral Resource Management Department (MRM) of De Beers carried out a modelling exercise on these carats. The modelling involves the prediction of the assortment profile of AK6 goods; diamond assortment includes model (shape), quality and colour.

AK8
AK8 is one of 30 known kimberlites being explored by De Beers as part of the Boteti Exploration Joint Venture between African Diamonds and De Beers. Pipe AK8 is now estimated from ground geophysics at around 6 hectares in size. Fifty-four stones weighing a total of 6.33 carats including one 2.26-carat stone, were recovered from the 98 tonnes extracted from four holes in the kimberlite using 12-inch drilling. Two of the four holes were negative and two were positive for macrodiamonds. The negative holes drilled into significant intersections of basalt and basalt breccia, despite the fact that their adjacent pilot holes intersected kimberlite. Of the three positive holes, one sampled 154m of kimberlite, of which 80m was highly diluted (80%) by basalt breccia. One hole which sampled some 151m of consistent kimberlite yielded 4.395 carats from 26.44 tonnes of.sample.

The AK8 recovery comprises 54 stones weighing 6.33 carats. There are some interesting features of the data:

Two samples had nil recoveries
About half the caratage recovered from sample DCD 175 is from one stone (2.26cts)
Generally the sample results vary significantly, the raw sample grade estimates range from 0 to 16cpht.

Mini-Bulk Sampling – BK3, BK6, BK7 (PL36 ‘Folio 12’), BK13, AK10, AK9.
SEROWE LICENCE
The Boteti Exploration joint venture holds four prospecting licences covering 2,483 square kilometers to the north-west of the regional centre of Serowe in central Botswana (Map 4). The original prospecting licence held by Kukama in this area, 3/2004, was in 2004 augmented by four additional licences, 8- and 9/2004, 49/2004 and 50/2004. All but 50/2004 are included in the Boteti joint venture with De Beers.

The project area is covered by geologically recent Kalahari sediments some 20-40 metres in thickness. These are underlain by upper Karoo basalts (~190Ma) and sandstones. The sandstone can be found where the basalt has thinned out or was removed by weathering, the latter process assisted by a complex system of block faulting during the late-Cretaceous (98-65mya) that resulted in uneven bedrock topography. The identification of these underlying formations has been facilitated by regional aeromagnetic surveys.

The company is pursuing programmes to explore this area for both kimberlite and alluvial diamond deposits.

PL 3/2000 Alluvials Project
The present day Letlhakane River is a remnant of a formerly much larger system which has drained the Orapa kimberlite field, 100 km to the north-west, for millions of years. Most of the Orapa kimberlites have suffered significant erosion and the liberated diamonds, which should amount to tens of millions of carats, have never been found.

To date, over 900 samples have been analysed in this manner and many samples have yielded kimberlitic indicator minerals. Over 500 kimberltic mineral grains have been recovered to date. Most are kimberlitic ilmenite, but significant numbers of kimberlitic garnets, spinels and diopsides have also been recovered. Map 5 summarises these results. As can be seen, a few holes have yielded significant numbers of kimberlitic indicators. For instance, Hole 6 on Line 3, at the lowest point of the profile shown in Figure 2, yielded large numbers of KIMs.

These results strengthen the hypothesis that these channels may contain pockets of alluvial diamonds. The potential of the area will be further investigated by high resolution geophysical surveys to be carried out during 2005.

Exploration Projects

    * Large scale exploration programme continues
    * 8 kimberlites are currently being assessed

PL36

    * 10 known kimberlites -> 14.5Ha in size
    * Several new potential targets to be drilled

Geographical Spread

Botswana

Congo

Board of Directors and Key Management

John Teeling	Executive Chairman

James Campbell	Managing Director

James Finn	Non-Executive Director

David Horgan	Non - Executive Director

Alex van Zyl	Executive Techincal Director

Company Address

162 Clontarf Road
Dublin, Ireland


Telephone:	353 1 8332833
Facsimile:	+353 1 8333505
Email:	info[at]afdiamonds.com
Website:	http://www.afdiamonds.com

Additional Address/Key Contact

Registered Office
20-22 Bedford Row,
London
WC1R 4JS

Principal Places of Business
SIERRA LEONE
1a Old Railway Line
Brookfields
PO Box 337
Freetown
Sierra Leone

Capital

76 million shares outstanding (79 million fully diluted)

Annual General Meeting

January

Year End

June 30

Nominated Brokers

RBC Capital Markets
71 Queen Victoria Street
London
EC4V 4DE

Nominated Advisors