Canabrava Diamond Corp.: Progress Report on Company Activities.

VANCOUVER, B.C.--(BUSINESS WIRE)--Feb. 20, 1998--Canabrava Diamond Corp. (VSE:CNB) is pleased provide the following update on our exploration projects in Canada and Brazil.

Whitefish Lake Project, Ontario

Detailed petrologic studies have been completed on the two kimberlite bodies discovered on the company's 100 percent owned Whitefish Lake Project. This is the first discovery of kimberlite pipes in this part of the Superior Craton. A combination of mineralogical, petrographic, geochemical and isotopic characteristics confirm these bodies to be classical Group I kimberlites.

Abundant indicator minerals were recovered from both kimberlites, and include pyrope garnets, chromites, picroilmenites, Cr-diopside orthopyroxene and olivine. Five G10 garnets were identified in a total 27 Cr-pyropes analysed from Intrusion no. 115, and 5 of the 52 chromites analysed have diamond inclusion compositions. In addition, both megacryst and ecologite paragenesis garnets are well represented in this kimberlite.

Due to the small amount of sample material available for processing, only three G9 garnets and six chromites were recovered from Intrusion no. 121. However, it is significant that one of the chromites has a composition consistent with a diamond association.

Management considers this to be a very encouraging result since it implies that both kimberlites should be diamondiferous. Both targets will be drilled as soon as possible in order to determine the size of the bodies and to collect representative samples for microdiamond analyses.

Additional results have been received for the 726 regional geochemical samples collected last summer from the Whitefish Lake area. Kimberlite indicator minerals, including pyrope garnet, chromite, picro-ilmenite, chrome diopside and olivine were recovered from 356 samples.

Picro-ilmenite is the most abundant indicator mineral present and significant numbers of pyrope garnets (48 grains in 47 samples) and chromites (82 grains in 71 samples) were recovered. The results clearly define twelve localized indicator minerals dispersion haloes, with grain counts of up to several hundred grains per sample over the best targets.

Morphological characteristics and surface textures on the indicator minerals are consistent with a proximal source. The data also strongly suggests that one or more kimberlite bodies may be associated with each of the anomalies. In addition, the presence of significant numbers of G10 garnets (5 grains) and diamond inclusion chromites (13 grains) establishes a positive diamond potential for the targets.

Planning is now in progress for an intensive summer program that will include follow-up sampling, ground geophysics and drilling. A budget of $2 million has been approved for this program.

The Whitefish Lake Project is located 30 kilometers northeast of Wawa and is comprised of about 80,000 hectares of claims and leased land.

Kap Project, Ontario

An 8,600 line kilometer high resolution airborne magnetic and electromagnetic-VLF survey over all four claims blocks has been successfully completed by High Sense Geophysics. Data is being processed and the product will be delivered within the next few weeks. Planning for the summer exploration program has been completed and a $1.2 million budget has been approved.

The Kap Project is a 50:50 Joint Venture with Paramount Ventures and Finance Inc. Paramount has vested it's interest in the project by funding all property acquisition costs and the costs of the airborne geophysical survey. The partners will carry future funding on this project equally.

Superior Reconnaissance Project, Canada

Following the early success with the Whitefish Lake Project, Canabrava will undertake a regional reconnaissance program covering approximately 50,000 km2 within the Superior Craton. A helicopter supported program aimed at collected 500 reconnaissance samples is planned to commence on May 15, 1998.

Brazil

In Brazil, exploration on the Canabrava Project to the end of 1997 included over 11,000 m of drilling and resulted in the discovery of 130 kimberlite/lamproite pipes. A total of 207 targets were drill tested. A program of mini bulk sampling to test for diamond indicator minerals and diamonds was initiated and the samples treated at the project's field laboratory in Brazil.

Both micro- diamonds and macro-diamonds have been recovered from a number of the discovered pipes, however economic concentrations of diamonds have not as yet been found in the pipes tested to date. More than 300 first and second order targets remain to be tested.

A complete review of all of the results received to date is currently underway and will determine the next phase of exploration. Field work has been suspended until this review has been completed.

Trans Hex International Ltd. is continuing with its due diligence with respect to exploring the alluvial diamond potential within the Canabrava Project (see News Release dated Jan. 15, 1998).

Exploration on the company's Macapa and North Bahia diamond projects in Brazil will commence in March, 1998. Paramount Ventures and Finance Inc. is spending US$ 500,000 to earn a 50 percent interest in both of these properties (see News Release dated Sept. 30, 1997). -0- Canabrava Diamond Corp. is 52 percent owned by Southwestern Gold Corp. (SWG-T). -0- Rory O. Moore, President and C.E.O. Canabrava Diamond Corp. -0- The Vancouver Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

CONTACT: Canabrava Diamond Corp.

George H. Plewes, 604/ 669-2525

604/688-5175 (FAX)

Website: http://www.swgold.com

or

Canabrava Diamond Corp.

Rory O. Moore, 604/669-2525

604/688-5175 (FAX)

Website: http://www.swgold.com