Archangel Diamond Corporation Acquires Right to Major Stake in Australian Diamond Field. Project Areas Contain 23 Pipes, 13 of Which Contain Macro Diamonds.

VANCOUVER, BC--(BUSINESS WIRE)--Oct. 10, 1995--Archangel Diamond Corporation (VSE:AAD) is pleased to announce it has reached an agreement in principle to acquire an 80 per cent interest in Ellendale Resources NL (Ellendale), an Australian company, in return for the provision of a $400,000 convertible loan facility to Ellendale for immediate working capital, plus long term financial and project management.

Ellendale either owns or is earning an interest in approximately 770 square kilometres of prospective diamond exploration territory which contains approximately one half of the 48 publicly known lamproite bodies within the West Kimberley Province in Western Australia. The farm-in properties include a joint venture with Auridium Consolidated N.L., a 50 per cent owner of the River Ranch diamond mine in Zimbabwe.

Many of the pipes on the Ellendale properties are similar in composition to the Argyle Pipe, also located in the Kimberley Region, which is the world's richest diamond mine by number of carats produced. Of the diamonds recovered from previous work in the Ellendale field, about 60 per cent have been gem quality.

There are approximately 16 high priority targets, including known pipes for investigation. A program of soil sampling, geophysics, drilling and bulk sampling is expected to begin within 4 to 6 weeks, subject to the fulfillment of the conditions of the acquisition.

The deal is subject to the completion of a due diligence examination to the satisfaction of Archangel, and the approval of the Vancouver Stock Exchange.

RUSSIAN PROJECTS

The Company is now completing the processing of the last 35 per cent of the 100 tonne bulk sample from Pipe 401, one of seven diamondiferous kimberlite pipes located on its 40 per cent controlled Verkhotina property in Archangel, near Finland in north west Russia. Also underway is the processing of two 10 tonne bulk samples on Pipes 451 and 402. The Verkhotina is approximately 35 kms from the Lomonosova deposit, the third richest deposit in the world with an in situ resource estimated at approximately US$37 billion.

The Windy Ridge (ADC 50 per cent) is a joint venture with the St. Petersburg-based Research Institute Horizon.

Previous work on the property by State organizations has resulted in the recovery of large numbers of diamond indicator minerals in association with a series of exploration drilling results revealing an exceptionally high diamond count, including one hole with 452 diamonds from 118 kgs of material, equivalent to 7 carats per tonne. More recently a hole drilled by the joint venture recovered 1229 diamonds from 18 kg of material, equivalent to 10 carats per tonne and considered one of the highest grade exploration holes in diamond exploration history.

The Joint Venture is currently undertaking geophysical and drilling programs designed to locate the kimberlite source of the diamonds.

-0-

Note: The Vancouver Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

CONTACT: Bill Trenaman

Corporate Development

[phone]

[phone] (Fax)

(Vancouver Office)

or

Andrew F. de P Malim

Executive Director

[phone]

[phone] (Fax)

(London Office)

or

Skyline Capital Corp.

Public Relations 

[phone]

[phone] (Fax)

(Toronto Office)