Pimenta Bueno bulk sample underway

Vaaldiam Resources Ltd. has started processing a mini-bulk sample from its 2.3 hectare Cosmos 1 kimberlite pipe, one of 38 kimberlite pipes and 3 kimberlite dike systems that have been discovered on its 100%-owned Pimenta Bueno property in Rondonia, Brazil. Eighteen of the pipes discovered to date are diamond bearing based on sampling completed. Only four of the 38 pipes have been mini-bulk sampled to date. This current 191 (wet) tonne sample from the Cosmos 1 pipe represents the largest single sample extracted from its Pimenta Bueno property.

The 191 tonne sample was extracted from three vertical shafts that were excavated into the Cosmos 1 kimberlite to depths ranging from approximately 7 to 14 metres. The goal of this sampling effort is to provide an indication of the diamond grade and diamond distribution in the Cosmos 1 pipe, and to compare the results generated in this sampling program to the results generated from a 62 tonne sample collected in 2006.

Jose Ricardo Pisani, Vice President, Exploration for Vaaldiam said that the extraction of samples through shafting provides the maximum sample coarseness in order to minimize diamond breakage. This form of excavation is also a more cost effective method of bulk sampling than using a drill to recover bulk sample material.

During 2006 Rio Tinto Desenvolvimentos Minerais Ltda. (”Rio Tinto”), in Joint Venture with Vaaldiam, sampled the Cosmos 1 pipe using a 51/2 inch reverse circulation drill, testing the pipe with 13 holes to a vertical depth of approximately 200 metres. A total of 62.2 dry tonnes of kimberlite was collected from the pipe resulting in the recovery of 117 macro diamonds ( greater than 0.850 mm) with a total weight of 2.45 carats. The two largest diamonds recovered weighed 0.14 carats and 0.12 carats. Vaaldiam’s three sample shafts were excavated next to three of the 13 drill holes completed by Rio Tinto, to provide a comparison of the diamond recoveries generated from the two different styles of sampling.

Vaaldiam’s geologists and technicians implemented a strict chain-of-custody procedure during the extraction of the sample to ensure the security of the sample. The mini-bulk sample was excavated and placed in 384 sample bags each with a capacity of approximately 1/2 tonne. The sample bags were sealed with a tamper-proof closure, which was inspected by representatives of the Brazilian Department of Mines prior to the samples being shipped to Vaaldiam’s dense media plant in Bahia State. Vaaldiam’s mini-bulk sample processing facility, situated in the Town of Nordestina, consists of a crushing and feed circuit, a 300 kilogram per hour dense media separation module and a secure diamond recovery circuit capable of recovering diamonds larger than 0.85 mm using a square mesh screen. Simulated diamond tracers with a density similar to diamond are used to measure the efficiency of the plant. The plant tailings generated during processing of the sample will be subject to reprocessing to ensure the highest diamond recovery is achieved.

The Cosmos 1 kimberlite is situated in the 208,000 hectare Southern Block of the Pimenta Bueno property. Rio Tinto retains an option to back-in to a 60% interest in any kimberlite pipe found that meets Rio Tinto’s development criteria within the Southern Block. Rio Tinto’s back in rights are triggered when Vaaldiam recovers at least 200 carats of commercial sized diamonds from a bulk sample on any kimberlite in the Southern Block. In the event Rio Tinto decide to develop one of these kimberlite pipes they will complete and fully fund a feasibility study. Should the feasibility study meet their criteria and Rio Tinto decide to develop a mine they would fully fund the construction of the mine and Vaaldiam would retain a 40% equity interest in cash flow from the mine. In such a case, Vaaldiam would not need to raise development equity funding.

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