Alluvial exploration update

RNS Number:4024D
Xceldiam Limited
23 May 2006



                                Xceldiam Limited
                         ("Xceldiam" or the "Company")
                                 AIM: XLD/ XLDW


Further alluvial exploration update


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


The front end scrubber section of the 70 tonne per hour (tph) MB70 alluvial
treatment plant and the six tph G6000 mobile alluvial prospecting plant sourced
from Alluvial Diamond Plants Metco (Pty) Limited in Cape Town have both arrived
at the concession.  Erection of the plant has commenced.  The initial sites for
these two facilities are in the N'Gombo area and have been prepared in advance
using the new Volvo earth moving fleet.  The 20 tph DMS and Flow Sort diamond
recovery sections of the plant have arrived in Luanda and will be commissioned
following commissioning of the MB70.  The initial alluvial sampling activities
will focus on a five kilometre terrace along the Luangue River between the
Sampoio and N'Gombo tributaries.  This area has been the focus of exploration to
date and is associated with the kimberlitic anomalies identified as priority
drilling targets.


Additional garimpeiro (artisanal miners) excavations on the west bank of the
Canguvo River some twenty kilometres north east of the main N'Gombo Camp have
also been inspected and undergone mineralogical assessment.  Initial mineralogy
is positive and the target gravel beds extend over several square kilometres.
Access tracks to this area are being prepared to allow an observation pit
sampling programme to commence shortly.



Tim George, Chief Executive Officer and Chairman, commented:



"It is pleasing to see that the months of planning that have gone into the
mobilisation of this treatment plant are delivering working structures on the
ground.  The extent of the alluvial gravels look more promising than we
previously anticipated and we are now eagerly awaiting the results of the
processing of the gravel samples."


                                                                    23 May 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'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 surveys 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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