Anglo Deal Enhances Etruscan Diamonds' South African Holdings.

Business Editors

WINDSOR, Nova Scotia--(BUSINESS WIRE)--May 25, 2004

Etruscan Resources Inc. (TSX:EET) and Mountain Lake Resources Inc. (TSX Venture:MOA) announced today that their jointly owned subsidiary, Etruscan Diamonds (Pty) Limited has concluded an option agreement with Anglo Operations Limited ("Anglo") a division of Anglo American Corporation of South Africa, for 17 properties in the Lichtenburg and Ventersdorp alluvial diamond districts. This increases Etruscan Diamonds' South African land holdings from 31 to 48 properties. The majority of the Anglo properties are located immediately south of the Lichtenburg District, 100 kilometers west of the Tirisano Diamond Mine, which is located in the Ventersdorp District.

Diamond Potential of the Anglo Properties

Three (3) of the Anglo properties will add to the Etruscan Diamonds' holdings in the Venetrsdorp District and the remaining fourteen (14) properties are located 100 kilometers to the west situated between two historic alluvial diamond districts: the Lichtenburg District to the north and the Schweizer-Reneke District to the south (see accompanying map). Recorded diamond production for the period 1904-1984 from these two districts was 11.8 million carats - 9.8 million carats from Lichtenburg and 2.0 million carats from Schweizer-Reneke. While there are no surface exposures of diamondiferous gravels on the intervening Anglo properties, historic drill records indicate that gravels are present but are covered by a thin layer of hard calcrete. Geological interpretations indicate that the ancient river systems responsible for the deposition of the diamondiferous gravels flowed from north to south - from the Lichtenburg District to the Schweizer-Renke District. Etruscan Diamonds believes that the gravel runs may therefore be continuous between the two proven districts and that the Anglo properties therefore have a high potential to host significant volumes of diamondiferous gravels.

Details of the Anglo Agreement

Under the terms of the Anglo agreement, Etruscan Diamonds has the right to carry out prospecting activities on the properties for a 5-year period upon payment of yearly option fees ranging from R4 50 (Cdn$0.92) per hectare during the first year of the option period escalating to R10 (Cdn$2.05) per hectare in the fifth year of the option period. The 17 properties cover approximately 50,600 hectares (506 km2). At any time during the option period Etruscan Diamonds can elect to acquire all or any part of the properties from Anglo for R2 500 (Cdn$512) per hectare (escalated annually at the rate of 10% compounded) and payment of a royalty equal to 2% of the gross sales revenue received by Etruscan Diamonds from selling minerals mined from the property after deduction of value added tax and state royalties. The Anglo agreement does not impose any minimum work programs nor exploration expenditure commitments. Etruscan Diamonds is entitled to abandon any of the properties on one month's written notice to Anglo.

At such time as Etruscan Diamonds has sufficient information to prepare a bankable feasibility study or has produced 5,000 carats from one of the farms or has applied for a mining license, Anglo will be entitled to re-acquire up to a 36% interest in the property purchased by Etruscan Diamonds by reimbursing Etruscan Diamonds for its proportionate share of costs incurred by Etruscan Diamonds on the property. If Anglo exercises its back-in right, any interest in the property transferred to a black economic empowerment group as contemplated under the new South African mineral legislation will reduce Anglo's interest in the property thereby maintaining Etruscan Diamonds interest at 64%. Upon exercise of the back-in right, the parties will enter into a joint venture arrangement that will be governed by a management committee having equal representation from Etruscan Diamonds and Anglo.

Exploration Methodology for the Anglo Properties

Etruscan Diamonds has successfully applied ground and leading edge airborne geophysical techniques to delineate diamondiferous gravel runs in the Ventersdorp District where the Company operates the Tirisano Diamond Mine. Gravity surveying has been effectively used to trace the gravel runs at the Tirisano Diamond Mine in areas with in excess of 10 meters of cover and to determine the exact location of the deep "sinkholes" along the gravel runs. Recently, Etruscan Diamonds engaged Bell Geospace, of Aberdeen, Scotland to carry out this leading edge 5,000 km2 airborne gravity survey over the entire Ventersdorp District with excellent results.

The thin cover of calcrete over the Anglo properties presents an opportune application for this same exploration methodology. Etruscan Diamonds will initially conduct orientation ground geophysical surveys and drilling to confirm the presence of the gravel runs on the Anglo properties. An airborne geophysical survey will then be carried out to map the gravel systems on a regional scale and to determine the areas of highest potential for bulk sampling.

Etruscan Diamonds Will Continue to Expand

Etruscan Diamonds is aggressively pursuing the exploration and development of alluvial diamond deposits in South Africa. The Company is securing strategic properties in a number of ways - through direct negotiations with mineral rights holders, by application to the Department of Mines, and through option and/or joint venture agreements.

The Company recently announced that an agreement had been reached with Mvelaphanda Exploration (Pty) Limited (owned jointly by Trans Hex Group Limited and Mvelaphanda Resources Limited) whereby Mvelaphanda can earn a 50% interest in three of Etruscan Diamonds's properties in the Ventersdorp District. Mvelaphanda can earn a 50% interest in the Nooitgedacht 131 IP property by, among other things, funding an estimated R41,000,000 (Cdn$8,200,000) capital expansion of the plant at the Tirisano Diamond Mine to achieve a minimum design capacity of 300 metric tons per hour.

Mvelaphanda can also earn a 50% interest in the Hartbeestlaagte 146 IP and Zwartrand 145 IP properties on which the Blue Gum Diamond Deposit is located by funding and carrying out a bulk sampling program and a feasibility study, including a valuation of the Hartbeestlaagte and Zwartrand properties. Mvelaphanda will earn a 50% interest in these two properties by making capital expenditures on the properties equal to 50% of the valuation amount. Mvelaphanda's required expenditure to earn the 50% interest, based on available data at a rate of 2.8 carats per 100 cubic meters, is estimated at R190,000,000 (Cdn$38,000,000) which expenditures will include the construction of a plant on these properties with an anticipated design capacity of 600 metric tons per hour. Trans Hex Group will be the operator on these three properties.

Upon completion of the earn-in, Etruscan Diamonds and Mvelaphanda will enter into a 50/50 joint venture arrangement. Mvelaphanda will act as operator of joint venture and will report to a joint management committee consisting of equal representation from each of Etruscan Diamonds and Mvelaphanda. The Mvelaphanda agreement will expand the production from the Tirisano Diamond Mine on the Nooitgedacht property and will accelerate the development of the Blue Gum Diamond Deposit on the Hartbeestlaagte and Zwartrand properties. Etruscan Diamonds will now focus its resources on adding value to its substantial land holdings elsewhere in the Ventersdorp District and on the newly acquired Anglo properties.

The common shares of Etruscan are traded on The TSX Exchange under the symbol "EET". The common shares of Mountain Lake are traded on the TSX Venture Exchange under the symbol "MOA". More extensive information on Etruscan and Mountain Lake can be found on their respective websites at http://www.etruscan.com and http://www.mountain-lake.com.

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