Progress Report On Canabrava Joint Venture, Brazil.

Business Editors

VANCOUVER, British Columbia--(BUSINESS WIRE)--May 30, 2000

Canabrava Diamond Corporation (CNDX:CNB) is pleased to provide the following progress report on its joint venture diamond exploration project located in Minas Gerais State, Brazil. This report is based on information supplied by the Project operator, SouthernEra Resources Ltd, which has an option to earn an equity interest in the Project by funding certain exploration expenditures.

The Canabrava Project continues to explore for the primary source rocks of the diamonds occurring in the rivers in the Coromandel - Patos de Minas region of Minas Gerais State. The concurrent alluvial diamond exploration program is designed to locate and exploit economic diamond-bearing paleo-gravels associated with the modern day drainage systems.

The primary diamond source rock exploration program has defined two high interest target areas. The first area is located to the south of Patos de Minas in the headwaters of the diamond bearing Sao Bento and Abaete rivers. Recent project samples from this area have produced some of the best subcalcic (G10) garnets discovered in Brazil. These high interest garnets have been recovered from both stream and volcaniclastic rock samples. To date no diamonds have been recovered from the coarse fractions of bulk samples of these volcaniclastic rocks, collected late last year. A small amount of the fine fractions of these bulk samples remains to be sorted for diamonds. It is considered likely that the volcaniclastic rocks are secondary collectors of indicator minerals that were originally derived from an earlier erupting diamondiferous kimberlite source.

It is believed that the G10 garnets from the volcaniclastic rocks and the diamonds found in the local drainages are derived from the same primary source. Detailed geologic mapping and careful analysis of the local stratigraphy and tectonic history has led to an understanding of the evolutionary history of the alkalic volcanism in the region. As a result, a well-constrained geological model has been developed for the intrusion of the local diamondiferous kimberlites. A program of intensive stream and rock sampling is underway in the priority areas, in an attempt to locate the diamond source rocks.

The second high interest area is located on the interfluves between the Santo Antonio do Bonito, Santo Inacio and Douradinho rivers, in the vicinity of the town of Coromandel. A number of the best diamonds in Brazil have been recovered from these three drainage systems. In this area a major G10-bearing garnet anomaly is being investigated. Detailed sampling has shown the garnet anomaly to be of limited extent and the elevated garnet abundance at this locality suggests that it is proximal to its primary kimberlite source. Anecdotal evidence gathered from local farmers suggests that diamonds have been recovered from the site being investigated. On-site testing of a bulk sample has recently commenced in order to test for the presence of diamonds at this locality.

In addition to testing of the garnet anomaly, a detailed sampling program has recently been initiated on a G10 garnet-bearing kimberlite pipe. This kimberlite has been sampled on a close spaced grid with the samples being collected below surface using a backhoe. The samples include a number of close-spaced 200 litre grid samples, in addition to seven mini-bulk samples each of approximately one cubic metre in size. All samples will be processed for diamonds at the Project's laboratory facility in Patos de Minas.

The recovery of high value alluvial diamonds from this part of Minas Gerais is well known. The alluvial diamond exploration program has made significant progress with a basin analysis of the drainage systems in the project area. As a result of this work, six sites have been located along the Abaete River which have potential to host diamond-bearing paleo-gravels. Significant diamond recoveries have been made by local miners along this stretch of the Abaete River. Considerable delays encountered in the environmental permitting procedure have now been overcome and alluvial gravel mapping and testing should commence next week. The occurrence and extent of gravels will be defined using a backhoe.

SouthernEra can earn a 50% interest in the Canabrava project by spending a total of US $20 million over seven years, with a firm commitment of US $1.5 million in the first two years. Approximately US $1 million has been spent to date. The agreement also provides SouthernEra with the option to reduce the US $20 million earn-in obligation to US $15 million by subscribing for US $1 million worth of Canabrava shares on or before June 10, 2000.

Canabrava Diamond Corporation is actively exploring for diamonds in Brazil and Canada both independently and through major joint ventures with Kennecott Canada Exploration Inc., SouthernEra Resources Limited and Paramount Ventures and Finance Inc. The Company is 52.5% owned by Southwestern Gold Corporation (SWG-T). For further information please visit our website at www.canabrava.com

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