Contact Diamond arranges and closes financing

Contact Diamond arranges and closes financing
Stock Symbol: CO (TSX) 


TORONTO, July 27  /PRNewswire-FirstCall/ -- Contact Diamond Corporation
announced today that it has agreed to and closed a private placement from
treasury of 3,700,000 shares to flow-through investors for total proceeds of
$2.035 million. Under the terms of the private placement, Contact Diamond will
renounce an equivalent amount of tax deductions from its exploration program
expenditures to the investors.

About Contact Diamond Corporation

Contact Diamond Corporation is an exploration and development company with
diamond properties in Ontario, Quebec, Northwest Territories and Nunavut.
Timiskaming, at the Ontario-Quebec border, is its leading project. Agnico-Eagle
Mines Limited (NYSE:AEMNYSE:TSX:NYSE:AGE) is currently the largest shareholder
of the corporation.

Cautionary Statement Regarding Forward-Looking Information

Except for statements of historical fact relating to the Corporation, certain
information contained herein constitutes forward-looking statements.
Forward-looking statements are frequently characterized by words such as
"potential", "estimate", "plan," "expect," "project," "intend," "believe,"
"anticipate" and other similar words, or statements that certain events or
conditions "may" or "will" occur. Forward-looking statements are based on the
opinions and estimates of management at the date the statements are made, and
are subject to a variety of risks and uncertainties and other factors that
could cause actual events or results to differ materially from those projected
in the forward-looking statements. These factors include the inherent risks
involved in the exploration and development of mineral properties, the
uncertainties involved in interpreting drilling results and other geological
data, the lack of a quoted market for diamonds, the possibility of project cost
overruns or unanticipated costs and expenses, a history of net losses,
dependence on the support of a significant shareholder, uncertainties relating
to the availability and costs of financing needed in the future and other
factors usual to the mining industry. The Corporation undertakes no obligation
to update forward-looking statements if circumstances or management's estimates
or opinions should change. The reader is cautioned not to place undue reliance
on forward-looking statements. 

DATASOURCE: Contact Diamond Corporation



CONTACT: Matt Manson, President & COO, David Smith, Investor Relations,

[phone]

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