Alluvial exploration update

RNS Number:8140Y
Xceldiam Limited
23 February 2006

                                Xceldiam Limited
                         ("Xceldiam" or the "Company")

Alluvial exploration update

Xceldiam, the Angolan diamond exploration and mining company, with its
operations focused on alluvial and kimberlite exploration on the Luangue
Concession in North East Angola, is pleased to announce a further update on its
alluvial exploration programme.

Xceldiam can confirm the arrival on site of its Volvo earthmoving equipment
fleet.  The fleet, which includes front end loaders, graders, articulated dump
trucks, an excavator and a bulldozer, was procured at a cost of #1.1m and will
be maintained by Volvo's Luanda office.  The equipment will initially be used
for bulk sampling of two identified alluvial features in the Luangue River
corridor, which Xceldiam's geologists consider the most prospective alluvial
deposits discovered to date.

Pre-shipment commissioning of the front end of the 70 tonne per hour alluvial
processing plant has been successfully completed by Alluvial Diamond Plants
Metco (Pty) Limited ('ADP') in Cape Town.  Fabrication of the associated 20
tonne per hour DMS (Dense Medium Separator) and recovery plant, also by ADP, is
also substantially complete and the site for the first processing plant has been
identified.

In preparation of the arrival of the plant on site in March, Xceldiam has
initiated the geological mapping of gravel occurrences; identifying the two
alluvial features mentioned above.  The observation pitting on these gravel
bodies will provide a greater understanding of the depth, breadth and volume of
the deposits.  A second six tonne per hour alluvial sampling plant will process
material from the observation pits, and should generate accurate sampling data
towards the middle of the year.


Tim George, Chief Executive Officer and Chairman, commented:

"The arrival of this equipment is a significant step forward in the development
of our alluvial exploration programme; providing us with the means to further
develop our two most prospective alluvial discoveries and progress Xceldiam to a
more mature exploration company.  I look forward to receiving the results of our
sampling programme over the next few months."

                                                                23 February 2006

For further information, please contact:

WH Ireland                                                                                Tel: 0161 832 2174
David Youngman
College Hill                                                                              Tel: 0207 457 2020
Ben Brewerton / Nick Elwes

www.xceldiamgroup.com


Notes to Editors:

About Xceldiam
     
*    Xceldiam was admitted to AIM in November 2005 at 45p per share under
     the share code XLD.

*    The Company's current activities are concentrated on primary source
     projects; specifically an exploration programme for diamondiferous 
     kimberlites in the Luangue Concession. This concession, which is 
     approximately 3,000 km(2), is located within the diamond bearing kimberlite 
     belt known as Lucapa Graben and is the Company's most advanced exploration 
     interest. In addition, a separate but concurrent exploration programme, on 
     the same concession, to identify alluvial diamond deposits is underway. The 
     valuable Catoca mine is situated some 70 km north east of the Luangue 
     Concession and the highly prospective Alto Cuilo Concession, operated by 
     Petra Diamonds Limited and BHP Billiton plc, lies immediately south of the 
     Luangue Concession.

*    Previous exploration in the area by Condiama in the early 1970s identified 
     eight kimberlites, at least four of which are diamondiferous, which were 
     under evaluation at the time Angola's civil war commenced and curtailed
     further activities.

*    In May 2005, Xceldiam completed a low level 22,000 line kilometre airborne 
     magnetic, radiometric and topographic survey over the Luangue Concession, 
     which identified over 70 kimberlitic type anomalies, adding to the eight 
     kimberlites originally identified in the early 1970s.

*    Xceldiam has a management team with practical diamond mining industry
     experience, the depth of which will allow growth potential in a variety of
     projects over the long term.  The team also has extensive logistical,
     development and operating experience in Angola.

*    The Company aims to entrench and progress the opportunities available to it 
     within the Luangue Concession to create significant value for all
     shareholders whilst contributing to the communities within which it 
     operates.


                      This information is provided by RNS
            The company news service from the London Stock Exchange
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