Cape Diamonds PLC



26 / 05 / 2006 - Commenced dealings on AIM.

Cape Diamonds PLC (Cape or the Company; stock code: CAPE), the South African kimberlite diamond mining company, announced on the 26th may 2006 the start of dealings in its Ordinary Shares on AIM.

The Company has raised 13 million before expenses, via a placing with institutional and other investors of 5.2 million Ordinary Shares at 2.50 per share. A further 3 million has been raised via a vendor placing, although these proceeds will go to the selling shareholders, not the Company.

Capes prime asset is a 74% interest in the Elandslaagte property, an existing mining operation located some 75km from Kimberley, the heart of South Africaa mining industry. Elandslaagte has a history of producing quality gem stones; between 1896 and 1992 over 30,000 carats of diamonds were recovered and individual diamonds have ranged in size up to 400 carats. The remaining shares are held by Wheatfields, a Black Economic Empowerment (BEE) group.

The Company intends to invest in modern processing equipment to increase the current output to about 250,000 carats of diamonds per annum. Since July 2004, Cape has invested in developing the infrastructure and open pit operation at the mine. Ten distinct areas of diamonds resources have been identified to date.

The funds raised will also be used to repay creditors, to make final payments due as part of the acquisition agreement for Elandslaagte and to provide working capital.

Cape also has access to other projects, principally in the Republic of South Africa, that the Board believes may offer attractive opportunities for the acquisition of additional diamond mining assets.

W.H. Ireland is the nominated adviser and broker to the Company.

Manie Silver, Chief Executive Officer of Cape Diamonds PLC, commented:

We are delighted that UK investors clearly appreciate both the world-class nature of the resource at Elandslaagte and its long-term potential. Following the successful placing, we now have the funds needed to boost diamond production to the levels required for the project to become self-financing.


For further information, please contact:

Cape Diamonds PLC - Masoud Alikhani, Executive Chairman 020 7408 1181

W.H. Ireland - Tim Cofman / Katy Birkin 0121 616 2101

Bankside Consultants - Susan Scott / Michael Spriggs 020 7367 8888



Number of Ordinary Shares in issue immediately following Admission = 32,821,053

whats caused this rise today anyone.

This seems to be rising again gradually........last time this started to rise it reached 8p ...be nice if this could do this again this week......diamonds definitely in favour again ..............bring it on baby!