Canabrava Diamond Joint Venture, Brazil Exploration Update -- 37.85 Carat Diamond Recovered.

VANCOUVER, British Columbia--(BUSINESS WIRE)--March 18, 1997-- Canabrava Diamond Co (VSE: CNB.) Canabrava Diamond Corporation (CNB-V) is pleased to announce that a 37.85 carat diamond has been recovered from a small stream draining five priority No. 1 magnetic targets in the Joint Venture's Quintinos property.

It is evident that this diamond is sourced within a cluster of targets within the Joint Venture's property. Recently, a garimpeiro mining on a small scale in the central portion of the Joint Venture's Patos property recovered a 24 carat gem quality diamond in a stream draining a cluster of priority No. 1 magnetic targets believed to be lamproites.

In the Lagamar area thousands of diamonds have been recovered in stream sediments and studies of these diamonds indicate that they are little transported. At least 30 priority No. 1 magnetic targets are situated within five kilometres of this prolific diamond depository and a program of testing bedrock will be initiated immediately.

In 1996, the Joint Venture drilled 108 magnetic targets and 84 new kimberlites/lamproites were discovered. Only five of these have been tested for microdiamonds and two were positive. One of the pipes containing microdiamonds was a lamproite. Over 1200 samples are awaiting processing and Teck Corporation, as operator, has built a heavy media separation plant to facilitate the treatment of this backlog of samples and to accommodate bulk sampling. ^There are over 1300 priority No. 1 and No. 2 airborne magnetic targets within the project area making this one of the most prolific areas in the world for kimberlite/lamproite pipes. ^The only indicator mineral useful in determining whether a lamproite pipe is diamondiferous is chrome spinel. There are 25 drainage areas where chrome spinels have been recovered with compositions in the diamond stability field. Most of these areas are related to lamproites and each magnetic target will be drill tested.

In the Paranaiba Area, the Joint Venture has discovered a kimberlite pipe of approximately 44 hectares. Five drill holes have been completed in this pipe and a 80 kilogram sample of various phases shipped to Canada for caustic dissolution. Samples from five other pipes drilled in late 1996 are currently being analyzed in Canada for micro/macro diamonds.

The Canabrava Diamond Joint Venture area is located about 400 kilometers southeast of Brasilia. It is comprised of 850,000 hectares of exploration concessions. Teck has a large exploration team based in Patos de Minas. The Joint Venture plans to drill test about 300 priority No. 1 targets in 1997.

Teck has an option to earn 60 percent interest in the Joint Venture by spending a minimum of US $10 million on exploration over five years, producing a positive bankable feasibility study, bringing a deposit into production and paying Canabrava Diamond Corporation US $20 million, including option payments of US $500,000 each April until 1999. Teck may obtain an additional 10 percent interest in the Joint Venture by paying the cash value of a 10 percent interest as determined by independent valuation based on the results defined in the positive feasibility study. -0- Canabrava Diamond Corporation 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: Canabrava Diamond Corporation

George H. Plewes, 604/669-2525