African Diamonds PLC
23 January 2004

AFRICAN DIAMONDS plc

Contacts:

John Teeling, Chairman Tel: +353 87 2581178

Jim Finn, Director Tel: +353 86 2581178

Redleaf Communications

Nick Lambert Tel: +44 (0) 7811 358 764

www.afdiamonds.com
23rd January 2004

AGM STATEMENT AND TRADING UPDATE

The following highlights will be announced by the Chairman of African Diamonds
plc, John Teeling, at the company's Annual General Meeting, which is due to be
held at 12.30 pm today.

Production

African Diamonds will be producing gem quality diamonds within 8 weeks.

The 240 ton a day pilot mining plant on Pipe 3 in Koidu, Sierra Leone will
be operational in March. Initially we will process 10,000 tons to establish
the grades.

We have high hopes for this plant. The new DiamondWorks mine on Pipes 1
and 2, three kilometres away, is reporting outstanding grades of 67 carats
per hundred tons, as well as finding 25 plus carat stones. Koidu produces
some of the highest quality diamonds in the world. Pipe 3 has every chance
of becoming a high grade commercial mine.

At Kolo, in Lesotho, production will commence on our 55% owned joint
venture, in the 2nd quarter of this year. Initially a total of 30,000 tons
will be mined, from which we expect to recover 5,000 carats including some
large stones. This too is expected to continue into full commercial
production.

Drilling results

We are getting spectacular results from our kimberlite dyke mapping
and sampling programme in Sierra Leone. So far we have mapped 11.5 kilometres of
dykes averaging 1 metre wide. Early stage analysis suggests grades of 1 carat
per cubic metre. Our neighbour, Mano River Resources is finding similar results
on an adjacent licence. If confirmed we have the potential for a mine of high
quality.

In March we will report detailed results from our drilling programme
on 5 kimberlites on our Orapa Licence. We already reported the discovery of two
high quality diamonds from pipe BK10. More will emerge from the detailed
analysis. Expectations at this time are to move to trial mining on BK10.

The search for the lost Orapa alluvial diamonds continues. The 42 holes drilled
in Serowe Botswana are being analysed. We know that we have found river
channels. We are now looking for Orapa gravels and diamond indicators in the
channels. Follow up work will continue during the year to look for Plunge Pools,
which may hold large, gem quality stones. This project has the potential to be a
company maker.

An extensive sampling programme is underway on our three Guinea alluvial
licences. By midyear we will have a resource estimate on the Bomboko and Seria
licences. We have already recovered diamonds from this area.

Corporate

We are at an advanced stage in negotiating an exploration joint
venture on certain of our properties. I hope to make an announcement shortly.

We are also at an early stage in discussing possible joint activities
with a diamond-mining partner.

The funds we received last year will last until June. We have been
offered funding for our on going work but we are reluctant to issue shares at
present prices given the expected flow of good news.

Conclusion

We have had a very good first year as a listed company. It is difficult to
rank the prospectivity and value of our various properties but the
spectacular grades being obtained around us in Sierra Leone offer massive
upside.

We are very well placed with an excellent portfolio and growing interest
in our company.

African Diamonds is a diamond exploration company traded on the AIM market.
Ticker symbol (AFD)

Ateeq...............
Most things African seem to be flavour of the week, at the moment.
Since you opted for AFG, and hopefully you're in profit, perhaps you can give us your views on that.
If you don't mind me asking.....what sort of quantity of stock do you go for on these more speculative types?
All the best.

African Diamonds and Mano River Poised for Growth argues Charles Wyatt of www.minesite.com

Most of 2003's winners in London's junior mining sector were mine development stories, but 2004 looks like being different. The sector is now at an interesting stage with lots to go for. Now, for the first time in nearly a decade, investors are anticipating drilling results, and for those few companies which actually know how to direct these drills, the rewards may be very large indeed. But, as always, there is scope for the lucky adventurer to make good and that, fundamentally, is why mining investment is so fascinating. African Diamonds


One company that has come a long way in a short time is African Diamonds. This company listed on AIM last summer at 7p with interest focused on the drilling due to be carried out on its Serowe licence in Botswana in a search for alluvial diamonds. This licence is some 100 kilometres south east of De Beers' prolific Orapa kimberlite diamond mine and is thought to cover ancient palaeo alluvial channels which drained this primary source. So far no alluvials have ever been found which could have originated from Orapa, but this is probably because the covering of Kalahari sediment is so thick. In the meantime the company has found some diamonds while drilling kimberlites on its Orapa project.
African Diamonds also has kimberlite Pipe 3 at Koidu in Sierra Leone.. This Pipe has now been dewatered and the kimberlite exposed at a depth of 30 feet . A ramp has been completed to give access to what is effectively a quarry and a 240 tonne/day dense media separation plant has been shipped up from South Africa. The idea is to take a 10,000 tonne bulk sample and, if warranted by the results , enlarge the plant and continue mining.
At the time of its AGM last month John Teeling, chairman of African Diamonds, predicted that the company would be producing gem quality diamonds within 8 weeks. He drew attention to the fact that the new DiamondWorks mine on Pipes 1 and 2, three kilometres away, is reporting outstanding grades of 67 carats per hundred tonnes, as well as finding gemstones weighing more than 25 carats. .He also forecast that production would commence on the 55 per cent owned joint venture at Kolo in Lesotho, in the 2nd quarter of this year. Initially a total of 30,000 tons will be mined, from which African Diamonds expects to recover 5,000 carats including some large stones. This too is expected to continue into full commercial production.
John Teeling concluded by saying that spectacular results were being obtained from the kimberlite dyke mapping and sampling programme in Sierra Leone Early stage analysis suggested grades of 1 carat per cubic metre and Mano River Resources is finding similar results on an adjacent licence. Mano River Resources


In fact Mano River is a company well worth considering by investors if they feel that African Diamonds has soared far enough for the time being. In the time that the share price of African Diamonds has risen from 7p to over 50p, that of Mano River has advanced more sedately from 4p to 10.5p. It is exploring for world class gold and diamond deposits and already has close to one million ounces of gold in estimated resources, a cluster of diamondiferous kimberlites and a number of highly attractive early stage diamond and gold targets in Sierra Leone, Liberia and Guinea. There is now an increasing market recognition of the recent positive evolution in the regional, political and economic landscapes of these countries, and the rating of Mano River is starting to reflect this.
The company has recently been rewarded by the Ministry of Natural Resources for its loyalty to Sierra Leone with the award of a 9,700 sq km licence. This licence covers the whole of the south eastern quadrant of the country and is underlain by the ancient Archaean Man Craton, which is highly prospective for diamonds, gold and base metals. It extends from the world-renowned Kono Diamond Fields, where Mano already has licences, to the Liberian border. In the west of Liberia Mano discovered the first ever known diamond-bearing kimberlite pipes, now under Joint Venture with Trans Hex Group of South Africa. This is quite a track record and Mano is already discussing a possible joint venture over the new licence to include an airborne geophysical survey.
Tom Elder the CEO, was at Minesite's Forum on Tuesday and confirmed that the licence actually covers nearly 15 per cent of the whole of Sierra Leone and consists of highly prospective, under-explored, diamond bearing terrain. He has a good team and will make the most of this opportunity. Why diamonds, you may ask, when base and precious metal prices are performing so well? James Picton, one of the world's leading diamond analysts, is best qualified to answer this as he has devised a chart which shows that diamonds are outpacing gold in price and should continue to do so. He reckons that we are facing a decade during which production of rough diamonds will be insufficient to meet demand. Last year , according to Picton, rough prices rose by 20 per cent and he expects something similar in 2004. In such a situation there is bound to be investor interest in the most successful explorers and these are more likely to be in Africa than Canada or Australia. Key Data


African Diamonds (AFD)
Market: AIM
Spread: 80p-82p
Market Cap: 43.5 million pounds
NMS: 3,000

Mano River Resources (MANA)
Market: AIM
Spread: 12.5p-13p
Market Cap: 20.4 million pounds
NMS: 1,000
Veteran mining writer, Charles Wyatt edits www.minesite.com the definitive source of information about small cap mining stocks. The site is free to register with and members gain access to regular forums where they can meet the men behind the stories. To find out more click here [links to http://www.minesite.com].

any comment on MANA company?

Don't ignore the diamond miner, FDI Firestone Diamonds - the senior of the exploration miners in Africa. FDI mkt cap around 14M: has 2 working mines producing large and small gems, and a share of a south african mine, plus the possibility of a JV in another territory ( Mopipi). FDI is a more mature company, and actual growth and gains are much more likely in the short to medium term. I hold at 42p.

What is the consensus for AFD's near future? They seem to have a strong position and plenty of potential, but now they have risen to 70odd pence are they over valued or just about right?

From UK Analyst posted on another board.

African Diamonds

Zak: African Diamonds (AFD) is perhaps the star of the African show in the sense that this is the stock that I have been receiving the emails about. It has also been something of a standout technically in the sense that post October we saw a very tight 20p - 25p range, with the breakout from this being particularly powerful as one would expect after such a log jam. The magic number to conquer was 25p and if anything, the pace of the rally seems to be accelerating.

It does not appear to be too much to suggest that the next month or so will see the target projected by the October resistance line at 115p hit quite easily. The only problem is of course where to place the stop loss. At this point the answer looks to be either a two day close below the Thursday low at 55p or the intraday February support at 45p for those who do not want to trade the stock too tightly.
From UK Analyst posted on another board

Tom: This is a John Teeling stock which at 73.5p is valued at 40 million. I remember laughing at broker research valuing this one at almost 100p a share when the stock traded at 7p. Amazingly that research now looks sensible. The company's exploration activities at Orapa in Botswana have located not only kimberlites but also actual gem quality diamonds (4 so far). No-one is saying that this is definitely a commercial find but the evidence that it may be is mounting. If it is not 20p here we come. But if it is commercial then the shares could multiply again from here. This really is a "glory play" for total gamblers. For what it is worth, and the stockmarket reporter on UK-Analyst reported this yesterday, the word in Dublin is that a fund raising at 50p is on the cards once the shares hit 100p which is expected soon. If you are tempted, go in with your eyes wide open.

DOES ANY ONE THINK TODAY WAS A PROFIT TAKING DAY FOR AFD,OR IS IT OVER VALUED AT PRESENT?

Profit taking and may be over overvalued until actual production results are announced.

Botswana devalued its currency 7.5%. Impact on AFD good or bad? Lots of punters reportedly took profits and switched into MANA ahead of this week's big African Mining Conference (Feb 10-12).

Isn't it March that AFD expect results from their drilling samples. Anyone have any ideas as to the share price direction 'till then? I regret not having profit taken last week. I've got to wait for the next rise now!

Two things to consider Highride, either the MM's have been very short of stock and are tree shaking or investors are begining to take profit, hence the drop in price.

If the drop in share price has triggered your stop loss limit then perhaps close your long position and short with a spread bet or CFD and then buy back in later as once further news the price will inevitably leap back up. Only an opinion but LOL.

Will this go to a pound,with more news expected,looks that way but any input from fellow investors will be appreciated as i am looking to buy some,but the question is .is it too late?

I'm looking for a 1 plus and given more good news could easily rise to that but thats my opinion! The MMs seem to like playing with this one and IC recomend a sell this morning so you pays your money and takes your chance

AFRICAN DIAMONDS (AFD)

61p - aim: diamond exploration - The bubble in small-company mining stocks may have further to run, but some companies are already showing signs of overvaluation and increased volatility. African Diamonds is one such company. Listed at a lowly 7p, its shares touched a high of 76p after the company released a string of positive results relating to its Orapa diamond licences in Botswana, and the tentative beginnings of operations on a series of dykes in Sierra Leone.

The company also announced a deal in which Kalahari Diamonds will fly over the company's grounds using the new Falcon ground-surveying technology to look for new kimberlite pipes. That process will shave three years off the exploration process, although Kalahari earns 60 per cent of anything found.

But it may not find anything at all - most exploration activity doesn't - and although African has found diamonds in the past and has plenty of indications on its licences that there may be more, it still needs to find a 'company maker' before it can justify a market capitalisation of nearly 30m. Firestone Diamonds, an established South African alluvial diamond producer - which also has significant interests in Botswana - is profitable and cash-flow positive, but has a market capitalisation of just 17m. Other companies that offer diamond exploration upside at a cheaper price include Petra Diamonds, which already has plenty of known kimberlite pipes in Angola to investigate and doesn't need Falcon to find any more, and Mano River, active near African Diamonds in Sierra Leone.

What African does well is manage the market. Its management includes many old hands in the business, and the projects they have put together may well pay off massively for investors who got in early. But, at current levels, there is better value elsewhere in the sector, and it's worth taking profits before the bubble bursts. Sell.

Thanks for the reply Legins. I have not tried CFD's yet. I'm trying to get the hang of short to medium term penny shares. I screwed up well Thursday though, bought more when I should have sold. Doh!!!
Despite IC's cautionary notes on AFD, fact is, AFD generates much interest, as Thursday 5th showed. Many investors obviously react very quickly on AFD news releases.

AFD said they expect the results back from one of their sites (I forget which one now)in March. So I wouldn't mind betting the prices will go crazy that day again, presuming,I say again, presuming the results are favourable! Perhaps another 50% spike on the day. Maybe even pass the 1.0 barrier if the present price can hold within the 0.70's or perhaps 0.60's.
I don't know, I'm just guessing and trying to read the market, but AFD's share price reflects the interest people have in it, not cold hard statistics!

Highride, Its easy to make trading decisions at the wrong timing I've made the same mistake in the past but atleast have learned from it and try not to repeat it. Do you have any charting / technical analysis software, if so which? I have programmed an alarm in my software which precisely warns me of the peaks and troughs based upon a 10% change in direction of short term bullish or bearish trends. In conjunction with RSI & MACD indicatios, so far it has given me sufficient accuracy to decide whether to trade long or short. This type of trading tool is of immense help.

Legins .............
Very interested to read about your charting techniques.
I too try and make use of these;with some success.
However, since the New Year, I have adopted a more high risk strategy,
and wonder how successful your indicators are for such volatile stocks?
eg. I bought AFD last week and sold the following day with a 38% gain.
So my point is.... was I just lucky with my gut reaction,or would your indicators have helped to achieve either a greater profit or minimise a potential loss. (which I could quite easily hace suffered, given the volatility of this stock}.
Regards to all holders.

From the Independent

Shares in African Diamonds traded at just 6.75p as recently as October. But those days seem to be long gone. Yesterday, African Diamonds gave up 1.5p to 71.5p as investors locked in profits from the company's meteoric rise. Dealers hear the group will soon, possibly as early as next week, unveil a joint venture with Kalahari Diamonds, a company backed by mining giant BHP Billiton. The link-up will help African Diamonds with the development of its assets in Botswana and word has it the agreement is already written and merely requires the signatures of the two management teams.

amardev,

In my view providing that the bid/offer spread is not to great the more volatile the better. Word of caution tho - for EOD data your charting signal of a peak or trough is the on day after the top or bottom so you then buy or short on open the next day - if the average interval between peaks and troughs is to short i.e. less than 5days then it is difficult to make any gains infact more likely to lose.

Legins. Sorry about replying so late. Re.your question: Do you have any charting / technical analysis software, if so which?
No I haven't at the moment. I've been doing this for about 14 months or so. I saw increase of 17% last year, but really I want to see more success before investing in equipment, plus my learning curve is steep enough right now, any more data inputs might give me a bad headache!!.
However, I use my Broker online site as well as Motley Fool for (basic probably)chart analysis and background data and leads/rumours. I am interested in getting some screening/analysis software sometime, but when???
All suggestions/advice however greatfully recieved.

Have anyone heard of 'Red Hot Penny Shares' by Fleet Street Publications. They claim to be very good at recommending shares that soar. Introductory 12month price is 57, then 97 thereafter. They say pay no money now, first 28 days free plus free gifts, yet request Bank details straightaway. I am vary wary due to the number of scams going on. These people also produce 'Money Weekly'.
"http://www.fsponline-recommends.co.uk/page.aspx?

I'm still holding a lot of AFD's, I am a little anxious with the price in a downward trend, but, I'm hoping there will be a good news release soon that should push the price up. That will then neutralise my timing error of the 5th.

African Diamonds PLC
17 February 2004

Botswana Joint Venture

Highlights

Joint venture agreed between Kalahari Diamonds (60%), and African
Diamonds (40%), on Botswana licences.

Revolutionary Falcon exploration technique to be used on the licences.

Primary targets are undiscovered kimberlite pipes in the area north of
Orapa, a new kimberlite field in Serowe and plunge pools / river
channels which drained Orapa through the Serowe licence.

All existing kimberlites identified by African Diamonds are not part
of the joint venture.

Orapa to be 'flown' during the second quarter of 2004.

African Diamonds is pleased to announce that they are finalizing a joint venture
agreement with Kalahari Diamonds Ltd. to explore the 4,000 sq km of diamond
licences in Botswana held by African Diamonds.

The objective of the joint venture is to use the Falcon exploration technique to
identify new kimberlite pipes on the Orapa and Serowe licences held by African
Diamonds. The joint venture agreement excludes the 21 kimberlites already known
to African Diamonds.

The Falcon airborne exploration technology is revolutionizing diamond
prospecting particularly in areas of deep cover such as the Kalahari sands and
the salt pans north of the Orapa diamond mine. The technique can identify the
signature of kimberlite pipes in a collection of geological anomalies. Kalahari
Diamonds Ltd, which has exclusive use of the technique in Botswana, will earn a
60 per cent interest in new discoveries on our licences by flying the ground,
analyzing the data and identifying targets. African Diamonds can elect to
maintain their 40 per cent interest in all follow up work or agree to be diluted
to a royalty interest.

It is intended to fly the Orapa ground as soon as it is practicable in 2004,
probably late in Q2. The Serowe licences are expected to be flown in early 2005.

The potential in the Orapa ground, a 1,000 sq km block north of the Orapa
diamond mine, is enormous. The Makgadikgadi salt pans make conventional
exploration in the area virtually worthless. Some 80 plus kimberlite pipes have
been discovered to date around the Orapa mine area but only two have been found
in the vast area of the Makgadikgadi, Kimberlite BK15, which is to be mined by
Debswana and Kimberlite K15, both of which outcrop on the southern shoreline of
the Magkadikadi pans.

Many geologists believe that further pipes exist under the salt and sand.

The potential on Serowe is equally good. African Diamonds has produced evidence
of a new kimberlite field. Drilling has also identified the existence of river
channels which may have drained the Orapa diamond fields. Using existing
techniques would take three years and a substantial investment to discover what
Falcon is likely to reveal by the end 2004.

John Teeling, the chairman of African Diamonds said, 'This is a very important
step for our company. We are trading 60 per cent of potential new discoveries on
our licences to save three years and to obtain the results of using this
wonderful new technique. Falcon sees through sand and salt.

We believe that we have at least three potential revenue streams of significance
in Botswana;

the lost alluvial diamonds of Orapa which we are chasing in Serowe
the new kimberlite field in Serowe where our work has narrowed the
area down to 150 sq km, and, most vitally
the untapped potential of our ground north of the Orapa mine

We are particularly excited about what lies beneath the sand and salt north of
Orapa. By year end we should have targets, some of which are likely to have
significant value to African Diamonds.'


Contacts:

African Diamonds Plc
John Teeling Tel: +353 87 2581178
Mark Scowcroft Tel: +27 (11) 447 4997

Redleaf Communications
Nick Lambert Tel: +44 (0) 7811 358 764

Rowan Dartington
Ian Rice Tel: +44 (0) 117 933 0020