Argosy Mining reports diamonds recovered from Pipe QK-3 in Zimbabwe.

VANCOUVER, British Columbia--(BUSINESS WIRE)--Jan. 25, 1995-- Argosy Mining Corp. (VSE:AGO) announced the recovery of three macrodiamonds from the QK-3 kimberlite pipe in the Quest area in northwestern Zimbabwe.

This discovery confirms the prospectivity of Argosy's exploration licences over the Zimbabwe extension of the Botswana kimberlite belt. The pipe, discovered in late 1994 by the Argosy/Reunion Joint Venture, is now believed to the likely source of two nearby alluvial diamonds (20 ct and 0.25 ct) reported in the 1950s.

The three macrodiamonds were recovered from 18 kilograms of eluvial material taken from 0 to 6.5 meters' depth in a 24-meter diamond drill hole. Core recovery was only 20-25 percent due to the unconsolidated nature of the material.

The diamonds, recovered in the Joint Venture's laboratory in Zimbabwe, have a total weight of 0.04 carats. The diamonds are clear and exhibit variably resorbed textures; two have relic octahedral shapes. The sizes of the diamonds are as follows: 1.0 X 0.9 x 0.9 mm; 1.5 x 1.0 x 1.0 mm; and 1.0 mm (round and broken).

Only a portion of the diamonds likely to have been present in the sample were recovered as the material was screened at -4.0 mm to +0.5mm, rejecting both microdiamonds and larger macrodiamonds (+4.0 mm). The stones were verified as diamonds by a commercial laboratory.

Core from 6.5 meters to 24 meters' depth in the drill hole is a weathered epiclastic kimberlite carrying a high proportion of non- kimberlitic material. No macrodiamonds were recovered from this section of core in the Joint Venture's laboratory. The material will be retested by a commercial laboratory.

As the QK-3 pipe has only been tested by a single drill hole the material recovered cannot be considered representative of the pipe. In addition, the small size of the diamond bearing sample, the low core recovery and the type of material drilled preclude any accurate estimation of grade for the interval sampled.

Follow-up drilling will commence immediately to recover a one-tonne sample for total diamond analysis. An extended drilling program will determine the size of the pipe, the phases of kimberlite present and the diamond distribution.

The Quest area covers 5,500 sq. km. on and to the southeast of Lake Kariba in northwestern Zimbabwe. Three pipes have been discovered to date in the Quest cluster. Exploration is continuing to test other kimberlite indicator mineral anomalies and airborne magnetic targets.

At Mlibizi, Zimbabwe, recent exploration has confirmed two new pipes (K18 and K19) in that cluster. Drilling on other targets is in progress with additional pipes likely to be confirmed as samples are recovered and analyzed. Results are still awaited on microdiamond analyses from K13.

Ten of the 31 confirmed kimberlites are presently under evaluation. Of these, five pipes have now been given a high priority and will be bulk sampled for diamonds.

In Tanzania,the first 18 aeromagnetic anomalies have now been located on the ground. The Joint Venture has purchased a multi- purpose drill that will enable Argosy to test kimberlite targets on a relatively continuous basis through 1995. Drilling will begin in mid-February.

Argosy is in Year 2 of a staged four-year diamond exploration program in Zimbabwe and Tanzania. A 1995 budget of $1.45 million (USDLR) has been allocated to explore the 7.2 million acres currently under licence. -0-

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CONTACT: Argosy Mining Corp., Vancouver

Yale R. Simpson, 604/689-5529

604/687-3797 (fax)