Salvador 1 Update
             



                     BRAZILIAN DIAMONDS LIMITED

                      Salvador 1 Project Update

Highlights:

*         Salvador 1 kimberlite confirmed diamondiferous with
  recovery of 12.44 carats from 603.5 tonnes in Pit 1
*         Possibly enriched foliated phases yielded 10.44 carats from
  preliminary processing of 402 tonnes of kimberlite, as well as
  higher microdiamond counts, and are being further examined now at
  the Company's mineral processing laboratory in Patos de Minas,
  Brazil
*         Overlying shallow alluvial deposits enriched compared to
  kimberlite

Brazilian Diamonds Limited  ("Brazilian Diamonds"  or "the  Company")
reports that field  operations are  now completed at  its pit  sample
evaluation of the Salvador 1 kimberlite pipe in central Bahia  State,
Brazil.  The Company  excavated three pits  from 8 to  11m deep,  and
processed the  extracted kimberlite  in a  plant built  on-site.   In
addition, the  Company  completed  three drill  holes  and  conducted
microdiamond tests  to  identify  potentially  higher  grade  zones.
Kimberlite weighing  603.5 tonnes  yielded 12.44  carats of  diamonds
from Pit 1, demonstrating that  the pipe is diamondiferous,  although
with a low abundance in the portion tested.  Preliminary results from
402 tonnes of kimberlite extracted  from Pit 3 returned 10.44  carats
of diamonds.  Additional kimberlite, mostly from the second and third
pits has been shipped to the Company's mineral processing  laboratory
in Patos de Minas, Brazil,  for final diamond processing and  quality
control tests following initial processing steps on-site.

The pipe is  overlain by  alluvial sands and  gravels from  0 to  10m
thick that  have  been  mined  historically  for  diamonds,  and  the
underlying kimberlite has been postulated  as the source for some  or
most of those  diamonds.  The evaluation  program confirmed that  the
Salvador 1 kimberlite has significant  areal extent of more than  six
hectares at the surface, and  established that it extends  vertically
in a pipe-like shape  to more than 200m  depth.  Mapping, logging  of
drill core,  and  examination  of pit  walls  demonstrated  that  the
kimberlite contains  both  strongly foliated  and  non-foliated  rock
units (or "phases"), suggesting multiple ages of emplacement.

Caustic Microdiamond Results

The occurrence of  strongly foliated and  non-foliated phases  within
the Salvador  1 kimberlite  suggests the  possibility that  intrusion
occurred in two  events widely  separated in time.   The older  event
would  have  been  before  regional  metamorphism,  which  leads   to
foliation,  and  the   younger  event  would   have  intruded   after
metamorphism, simply  exploiting  the same  emplacement  structures.
Such widely separated  intrusive events  might be  expected to  carry
very different mantle samples, including diamond content.

Microdiamond tests  were  completed  to  determine  whether  strongly
foliated phases  carry a  different abundance  of diamonds  than  the
non-foliated phases.   Samples  were processed  by  SGS-Geosol  using
their  new   laboratory   in   Brasilia.   The   process   began   by
disaggregation of  each  sample  at  the  Company's  Patos  de  Minas
laboratory, under the direction  of a representative of  SGS-Geosol.
This disaggregation stage  used a 0.075mm  screen, with all  material
finer than  that  being discarded.   The  reduced samples  were  then
transported to SGS-Geosol's Brasilia  laboratory for caustic  fusion,
again using a 0.075mm bottom sized screen.

A total of 768kg  of kimberlite were  treated for microdiamonds  with
half being  from  the  strongly  foliated  phases.   A  total  of  28
microdiamonds remaining on a 0.075mm screen were recovered, with  90%
(25 of 28) being recovered  from the strongly foliated phases  (Table
1), which comprised 448kg of sample weight.

Table 1: Results of microdiamond tests comparing non-foliated phases
in Pit 1 to the strongly foliated phases in Pits 2 and 3.



+-------------------------------------------------------------------+
| Square Mesh   | Caustic        | Caustic Sample      | All sample |
| screen        | Foliated       | Non-foliated totals | totals     |
| openings      | Sample totals  |                     |            |
|---------------+----------------+---------------------+------------|
|               |                |                     |            |
|---------------+----------------+---------------------+------------|
|               | Pit 1, 2 and 3 | Pit 1               | Pit 1, 2   |
|               |                |                     | and 3      |
|---------------+----------------+---------------------+------------|
|               |                |                     |            |
|---------------+----------------+---------------------+------------|
| Sample #      |                |                     |            |
|---------------+----------------+---------------------+------------|
| Start weight  |      448       |         320         |    768     |
| kg            |                |                     |            |
|---------------+----------------+---------------------+------------|
|      0.600 mm |       1        |          0          |     1      |
|---------------+----------------+---------------------+------------|
|      0.425 mm |       1        |          0          |     1      |
|---------------+----------------+---------------------+------------|
|      0.300 mm |       3        |          0          |     3      |
|---------------+----------------+---------------------+------------|
|      0.212 mm |       6        |          0          |     6      |
|---------------+----------------+---------------------+------------|
|      0.150 mm |       3        |          3          |     6      |
|---------------+----------------+---------------------+------------|
|      0.105 mm |       4        |          0          |     4      |
|---------------+----------------+---------------------+------------|
|      0.075 mm |       12       |          0          |     12     |
|---------------+----------------+---------------------+------------|
|    
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