Alluvial Update

RNS Number:8889K
Xceldiam Limited
24 October 2006

24 October 2006

                               Xceldiam Limited
                        ("Xceldiam" or the "Company")

                         Alluvial Exploration Update

  200,000 m3 of gravel resources identified and bulk sampling has commenced for
                   grade assessment and economic evaluation

  Trenching results reveal combined strike lengths of more than 8km, remaining
                              open at both ends


Xceldiam (AIM: XLD), the Angolan diamond exploration company announces further
progress on the delineation of alluvial deposits on the Luangue Concession in
north eastern Angola.

To date, two areas have been the focus of exploration for diamond bearing
alluvial gravel deposits in association with the Angolan parastatal Endiama and
local partner Bapsil. These are the Canguvo area in the central north, and the
Sampoio-Ngombo corridor along the Luangue river in the central areas of the 3
000 km2 Luangue concession.

In the Canguvo area, geological mapping of the trenching has revealed an average
1.16m gravel thickness occurring for over 3km along strike, open at both ends,
under overburden cover averaging only 5.7m. In the Sampoio-Ngombo area, earlier
pitting and drilling exercises have exposed two alluvial occurrences, a 0.5m
thick flood plain gravel as well as a 1m thick terrace gravel, over a 5 km
strike length. Trenching is underway and is being extended to sample both gravel
horizons along the entire strike length. A small section of this target area was
previously worked by small scale artisanal miners and is known to have produced
good value diamonds.

A mobile sampling plant has been commissioned and has commenced
pre-concentration of the stockpiled Canguvo gravels ahead of processing during
October and November for diamond recovery and grade assessment. The construction
of the main 70 tonne per hour sampling plant with associated dense media
separation and X-Ray and grease diamond recovery circuits is complete and
provides a secure and accurate environment for grade determinations. Processing
of the stockpiled samples from both areas, now that a meaningful gravel resource
has been established, has been initiated.

Tim George, Xceldiam's CEO, commented "It is encouraging to have some 200,000
cubic metres of alluvial gravel resource delineated to date with both deposits
being open-ended along strike. Work in the months ahead will define the full
extent of the resources and the economic mining potential with a view to a
production decision in early 2007. The information derived from the alluvials
will also be useful in the ongoing drilling programme of the kimberlite
occurrences around the alluvial deposits where we have completed over 1,000m of
core drilling."


Rolando Palaganas, Professional Certified Geologist, BSC- Geology Adamson
University Manila Philippines, with 23 years mining sector experience,
supervised the geological mapping of the Canguvo area and Sampoio- Ngombo
corridor.


                             www.xceldiamgroup.com


For further information, please contact:

Tim George, Xceldiam Limited                    [phone] / [phone]

Ed Portman/ Leesa Peters, Conduit PR            [phone] /[phone]

Adrian Kirk/ David Youngman, WH Ireland Limited                 [phone]



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