Redaurum to develop new diamond mine in South Africa.

TORONTO--(BUSINESS WIRE)--March 17, 1997--Redaurum Limited (the "Company") (RRK-TSE) announced today that it has applied for a licence to proceed with the development of a new alluvial diamond mine on its 10,621 acre Rooiberg property in South Africa, where the Company has discovered large volumes of diamond-bearing alluvial gravels.

Bulk samples taken from six sites on Rooiberg have all yielded diamonds. More than 160 gem quality diamonds have been recovered. The largest diamond weighs 1.25 carats.

Most of the diamonds are similar in type to those mined by Redaurum at Quaggas Kop, six kilometres upstream, but a second distinct population of diamonds of a generally higher quality is becoming evident among the stones recovered on Rooiberg. The Quaggas Kop alluvial mine was producing diamonds averaging 85% gem quality, which in 1996 sold for prices averaging US$209 per carat.

Drilling on Rooiberg has delineated seven kilometres of the meandering course of a buried Miocene age palaeo channel of the Sout River, which runs through the property. An estimated 10,000,000 tonnes of potentially diamond-bearing Miocene alluvial gravel is contained within that length of the buried river valley, averaging 500 metres in width. The gravel filled palaeo channel extends beyond the Rooiberg boundary into an adjoining property, known as Arizona. Redaurum has acquired exclusive prospecting rights to the 14,779 acre Arizona property and a five year option to buy the freehold.

Drill intersections of the limestone bedrock of the Miocene river channel on Rooiberg provide evidence of sinkhole structures, or large solution cavities filled with gravel. One of the sinkholes is more than 20 metres deep. Similar gravel filled limestone solution cavities of Miocene age elsewhere in South Africa have proven to be trap sites for substantial grades of high value alluvial diamonds. It is therefore considered highly likely that Rooiberg sinkholes will contain diamonds of excellent quality, adding considerably to the property's total resource of diamond-bearing gravel.

The bulk testing program now in progress has been confined to the most accessible near surface gravel deposits, which represent an upper terrace of the Miocene river valley. Evidence from other alluvial diamond mines suggests that Rooiberg's best diamond recovery grades are likely to come from deeper lying gravel within bedrock scour channels, and in the sinkholes. Bulk samples of the basal and sinkhole gravels will be excavated and tested for diamond content over the next six months.

Mining of the high terrace gravels is expected to begin during the current quarter.

Redaurum is an international diamond mining and exploration company which owns and operates the only commercial producing diamond property in North America at Kelsey Lake, Colorado/Wyoming, USA. Redaurum also has producing mines in South Africa and, through a joint venture, in Zimbabwe.

CONTACT: Redaurum Limited - Toronto

Thomas Walden, 416/ 368-3553

or

Redaurum Limited - London

Anthony Hamilton, 44/171 610-6070

or

Bankside Consultants Ltd. - London

Keith Irons, 44/171 220-7477