Canabrava - New Acquisition Rio Araquaia Project, Brazil.

VANCOUVER, BC--(BUSINESS WIRE)--Oct. 16, 1995--CANABRAVA DIAMOND CORP (VSE: CNB) Canabrava Diamond Corporation is pleased to announce the acquisition (in joint partnership with Teck Corporation) of two producing alluvial diamond properties in the Rio Araquaia region of Brazil.

The properties have long been mined on a small scale by local interests, and are known for their high quality diamonds and large stones (up to 40 carats) that have been recovered on a regular basis. Canabrava and Teck have initiated a 3 month program of bulk sampling to define reserves and grades. Preliminary estimates, based on existing workings, indicate a reserve potential in excess of 24 million cubic metres of gravels containing 2.4 million carats of diamonds (0.1 carat/cu.m).

Under the terms of a letter agreement, the vendors will retain an interest approximately equivalent to a 30 percent net profit and receive cash payments of $25,000, plus $5,000 per month until production commences. Included with the property are 14 jigs capable of treating 3,000 cu.m/day.

An early cash flow from this project is anticipated.

Canabrava Diamond Corporation is a 54 percent owned subsidiary of SOUTHWESTERN GOLD CORPORATION (SWG-T).

John G. Paterson President

-0- The Vancouver and Toronto Stock Exchanges have not reviewed and do not accept responsibility for the adequacy or accuracy of this release.

CONTACT: George H. Plewes

Chairman

Canabrava Diamond Corporation

[phone]

[phone] (Fax)