São Luis River Basin Diamond Project- Brazil

The São Luis River Basin diamond project consists of two properties totaling 2,778.51 hectares (6,863 acres).  It is located in Mato Grosso, Brazil, approximately 30 kilometers (19 miles) from the town of Juina. The first concession consists of 1,889 hectares (4,666 acres) and began production in 2000.  It has produced over 175,000 carats. The National Department of Mineral Production (DNPM) has documented 119,334 carats of diamonds produced from this property in 2004 and 2005. 

The Company's investment in the joint venture of $4.5 million will be used for additional mining equipment and the improvements to the mine’s infrastructure. Of this amount, about $2 million will be used to improve the existing facility and to acquire two additional diamond sorters for the processing plant. The mine currently has one diamond sorter working at full capacity. This limits the quantity of diamonds that are produced. São Luis Mining believes that the addition of two more diamond sorters and the other planned improvements to the mining operation will increase production of the mine three-fold within six months.