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22 September 2008

AK06 Diamond Discovery, Orapa, Botswana

• Mining Licence negotiations at an advanced stage -  30 September completion targeted

• Retention Licence application not considered by Botswana Government

• Diamond marketing terms agreed between De Beers and the Botswana Government

African Diamonds plc, ('African Diamonds') the AIM and Botswana listed diamond explorer (AIM: AFD), is pleased to announce progress towards the development of the AK06 discovery in Botswana. African Diamonds holds a 28.38% interest in the project.

The Director of Mines of Botswana has informed the parties that the Retention Licence applied for by De Beers was not considered and in his view was not formally lodged, as a Mining Licence application was still pending. This was the advice given by African Diamonds to De Beers prior to the submission of the Retention Licence. The rejection of this advice, amongst other matters, started the court and arbitration proceedings against De Beers and Boteti.

African Diamonds has been notified by De Beers that agreement has been reached between De Beers and the Botswana Government on the marketing of AK06 diamonds. The diamonds will be marketed through the Diamond Trading Company Botswana in a similar fashion to current Debswana production. Debswana is an equal joint venture between De Beers and the Botswana government. 

 Of greater significance is the strong encouragement given by the Botswana government to the three parties involved in the AK06 discovery to complete Mining Licence negotiations by 30 September 2008, so that a Mining Licence can be awarded. Detailed discussions between the parties and the State officials make African Diamonds' directors optimistic that this deadline can be reached.

In the light of the progress being made toward a Mining Licence, the directors of African Diamonds have agreed to seek deferment of a court case scheduled for the Botswana High Court on 22 September 2008.

John Teeling, Chairman of African Diamonds commented:

'Significant progress has been made toward agreement on the terms of a Mining Licence for the AK06 diamond discovery in Orapa. Earlier attempts by De Beers to defer the project were rejected by the Botswana government. Difficulties with the marketing of the diamonds have been ironed out. African Diamonds is satisfied with the new agreement. Final details are now being worked out to enable agreement on the terms of a Mining Licence to be completed by 30 September. Our court case is on hold.'

This release has been approved by Alex van Zyl, Technical Director, African Diamonds. Alex van Zyl (B.Sc. Stellenbosch, B.Sc. Hons. Pretoria) spent a long career in Anglo American in the diamond division, ending up 1990 to 1997 with worldwide responsibility for diamond exploration and evaluation. He was a consultant to De Beers from 1997 to 2002.

Further information:

African Diamonds Plc 

John Teeling                                 Tel: +353 1 8332833

Alex van Zyl                                  Tel: +27 83 261 2956

James AH Campbell                      Tel: +27 83 457 3724

RBC Capital Markets

Andrew Smith                               Tel: +44 20 7029 7882

Martin Eales                                 Tel: +44 20 7029 7881  

College Hill

Paddy Blewer                               Tel: +44 (0) 20 7457 2020

Nick Elwes                                   Tel: +44 (0) 20 7457 2020

www.afdiamonds.com

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