Important developments affecting Kopane’s Diamond assets in Lesotho and Finland

Kopane Diamond Developments Plc, formerly European Diamonds Plc, has announced a number of important developments affecting its diamond assets in Lesotho and Finland. In summary these are:-The signing of the definitive Joint Venture Agreement (”JVA”) with Mantle Diamonds Limited (”Mantle”) to establish a new joint venture to operate and finance Kopane’s Finnish assets.

Diamond sales by Liqhobong Mining and Development Company (Pty) Ltd (”LMDC”), Kopane’s 75% owned operating company in Lesotho, for the second half of calendar 2007, totalling 77,575 carats with a value of US$3.81 million.

The signing by LMDC of a contract with Bauer Technologies South Africa (Pty) Ltd (”Bauer”) to complete a minimum 20 wide-diameter hole drilling programme on the Company’s Main Pipe at Liqhobong. This programme is scheduled to commence in early February 2008 and to take up to six months to complete. It is a significant element of Liqhobong’s Definitive Feasibility Study (”DFS”), which is itself expected to be completed by end 2008.

Finland

Kopane and Mantle (together “the Parties”) have signed the JVA to establish a new joint venture to operate, finance and develop the Company’s diamond exploration assets in Finland (the “Properties”). This definitive agreement replaces the non-legally binding heads of agreement between the Parties announced on 7th November 2007.

Kopane currently holds 28 mineral claims and reservations in Finland, including its assets at Lahtojoki, Kuusumo and Lentiira. Under the JVA, Mantle will be able to earn up to a 70% interest in the Properties as follows:by spending US$5 million on exploration and evaluation on the Properties. As part of this sum, Mantle has specifically agreed to commission, fully fund and complete a bankable feasibility study in respect of the Company’s Lahtojoki property; and by paying Kopane 10 million Mantle shares, with an attributed value of 20 pence per share, as follows:
One-sixth on completion of the JVA;
One-sixth on satisfaction of certain conditions precedent;
One-third within 24 months of completion of the JVA or on publication of a bankable feasibility study in respect of the Company’s Lahtojoki property, whichever is earlier; and One-third 12 months thereafter.

Tim Read, Executive Chairman of the Company said, that the creation of this Finnish joint venture is the final and fundamentally important component in the restructuring of Kopane. Mantle has a strong diamond exploration team with a good understanding of Finland’s potential. We are confident that they will be able to add considerable value to the joint venture. It allows us to concentrate Kopane’s managerial, technical and financial resources on the development of our assets in Lesotho, whilst continuing to benefit from the exploitation of the Finnish assets. It furthermore provides a look-through value on our Finnish assets of some £3.6 million.

Mantle is a privately-owned UK company with diamond exploration interests in Canada, Liberia, Mali, the DRC, Angola and Zimbabwe as well as Finland. Mantle plans to list on AIM within the next six months.

Lesotho

Production and Sales

Progress is continuing to be achieved at the Liqhobong operations despite interruptions caused by unusually heavy seasonal rainfall. The successful recruitment of senior technical and management personnel has begun to make an impact on operating results and we continue to seek additional experienced people.

LMDC has started limited mining of the Main Pipe, which is exposed at surface, in order to facilitate the DFS. The soft weathered kimberlite is being removed to gain access to the unaltered kimberlite, so that representative bulk sampling and other geotechnical testwork required for final design may proceed. This weathered material is currently being blended with Satellite Pipe kimberlite and processed through the Satellite Pipe plant. Ore from the K4 zone of the Main Pipe is, as expected, higher than average grade and yielding some large stones.

During the second half of calendar 2007, LMDC, through its sales agent BHP Billiton, sold a total of 77,575 carats of diamonds from its Liqhobong Diamond Mine. These sales realised total revenue of approximately US$3.81 million with an average sales value of US$49.09 per carat. This compares with 47,286 carats (+ 64 %) and US$2.28 million (+ 67%) for the first half of 2007. In the second half of 2006, LMDC sold 29,947 carats of run-of-mine production for a value of US$1.73 million (US$57.77 per carat) plus an additional 78 carats contained in four large stones which sold for US$1.43 million, equivalent to US$18,333 per carat.

In addition, a parcel of boart (low quality industrial diamonds), totalling 13,321 carats, was sold in December 2007. Boart stones are accumulated separately and sold periodically.

Since diamond sales began in March 2006, a total of 180,268 carats, excluding the boart stones, have been sold for a total value of US$10.37 million, equivalent to US$57.54 per carat. At December 31st, LMDC was holding an inventory of diamonds, totalling 22,392 carats, excluding boart stones.

Kopane Diamond Developments Plc is a growing diamond mining company with substantial production and development assets in Lesotho. The Liqhobong Satellite plant is now producing at a rate of over 150,000 carats per annum. A Definitive Feasibility Study has commenced on the Liqhobong Main Pipe, to demonstrate a viable project, capable of producing up to one million carats per annum. Kopane is also committed to bringing its exploration assets in Finland to full value for its shareholders.

Kopane Diamond Developments Plc (formerly European Diamonds Plc) is listed on the AIM Market of the London Stock Exchange and its shares trade under the symbol KDD.

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