DIAMOND EXPLORATION – Timiskaming Diamond Values Encouraging

ONTARIO Just west of Cobalt, CONTACT DIAMOND CORP. of Toronto is drilling its Timiskaming diamond project. And the valuation of the latest mini-bulk sample has the company hoping to be the first commercial diamond producer in Ontario.

The sample was taken from kimberlite 95-2 and given to WWW INTERNATIONAL DIAMOND CONSULTANT for valuation. The consultants reported that stones recovered from LDD program are valued at US$38/carat. The current best estimate value model is US$66/carat with a low of US$52/carat and a high of US$98/carat. The WWW report also made positive comments on the proportion of sawable and makeable goods, as well as the colour of the 95-2 parcel.

Contact Diamond is pleased with this initial assessment of stones from Timiskaming. It says they compare favourably with those from the Fort a la Corne region of Saskatchewan. Consequently, the company has committed Cdn$4 million to its regional exploration program. One drill is already coring kimberlite pipe KL-22 and a second is on its way to kimberlite KL-01. A total of 7,000 metres of mostly HQ core will be drilled from the two pipes, and Contact expects the first new microdiamond results by the end of 2004. The goal is to advance several kimberlites to the mini-bulk sampling stage by the second half of next year.

A property location map may be viewed at www.ContactDiamond.com. See also the "Diamonds 101" link for comprehensive facts.