Archangel Diamond Corporation announces first diatreme results: 160 carat per 100 tonnes.

VANCOUVER, British Columbia--(BUSINESS WIRE)--Sept. 3, 1996-- ARCHANGEL DIAMOND (VSE: AAD)--Archangel Diamond Corporation and their joint venture partner, Archangelskgeoldobycha, are pleased to announce continued high grade results from Pipe 441, Verkhotina Project, in NW Russia.

Results (by gravity processing) of the first hole (Hole 43, core diameter of 90mm) to intersect the diatreme have now been released by Archangelskgeoldobycha's processing facility:

PIPE 441 - HOLE 43 RESULTS (+0.5mm crystals)

Interval
(m)      Diamonds         Total  Sample   Grade      Comments
          (mm)1           weight weight  (carat/100t)
                           (mg)    (kg)
       -4+2  -2+1 -1+0.5

71.0-
198.0    -    4     12    43.55   1,052.3    21 Crater facies
            34.00  9.55                     comprising bedded
              mg    mg                         sandstones and
                                          tuffaceous breccias

198.0-   2   11     50   239.35    709.5    169    Kimberlite
283.0 127.90 71.45 40.00
        mg    mg    mg

71.0-    2   15     62   282.90   1,761.8    80       Average
283.0 127.90 105.45 49.55                            for hole
        mg    mg    mg

(1) Measured in one dimension

Two -4+2mm stones were recovered from the kimberlite, one of which weighed 108mg (0.54carat).

Since drill checking of geophysical anomalies identified the pipe, a delineation and sampling drill programme has been started. The first three holes (discovery hole, 40 and 42) only intersected crater facies before drilling country rock. However, hole 42 intersected at 172m what is thought to be a thin high grade (730 carat per 100t) weathered crust to the diatreme. The average grade of only the crater facies in these three holes is 33 carat per 100t (sample weight of 760kg).

The diatreme boundaries remain undefined in all but the east. Geophysical surveys suggest a pipe size of between 11ha and 15ha. Drilling is now progressing on an 80m grid system to establish the pipe shape. Holes 43 and 49, both 80m west of 40 and 42 respectively, and hole 48 (160m west of 40) all intersected similar crater facies at approximately 70m and then the diatreme at approximately 200m. Holes 48 and 49 were stopped in kimberlite at 301m and 307m, respectively, and the core is currently being processed. Dr Luc Rombouts states of the earlier results (holes 40 and 42);

"Indications are that the diatreme will be rich (100 to 150 carats per 100t), with a very rich, but thin (<1 metre) enrichment layer lying on top of the diatreme (500 carats per 100t). Promising also is the dominance of octahedra above dodecahedra diamond forms, pointing to little resorption."

On the basis of developments at Verkhotina, Archangel Diamond Corporation has now established a permanent presence at Arkhangel'sk with their own technical and liaison office. The Russian operations are being managed by Stephen Lay, a Fellow of the Institution of Mining and Metallurgy and a Chartered Engineer, who has worked closely with Archangelskgeoldobycha for the Company.

ON BEHALF OF THE BOARD

Franco Boulle, Chairman and CEO

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

CONTACT: Archangel Diamond Corporation

RKH Limited, Investor Relations, 416/861-3080

416/861-0418 (Fax)