Drilling Report

RNS Number:4240M
Xceldiam Limited
21 November 2006





                                Xceldiam Limited



              KIMBERLITE UPDATE AT THE LUANGUE CONCESSION, ANGOLA



*         Highly prospective HS-1 kimberlite pipe larger than originally
estimated at 18 hectares



*         Additional shallow intersections achieved



Xceldiam Limited, (AIM: XLD) ("Xceldiam" or "the Company"), the Angolan diamond
exploration company in association with the Angolan parastatal Endiama and local
partner Bapsil announces further positive developments on its kimberlite
drilling programme in north eastern Angola.



With more than 16 holes of an ongoing core drilling programme completed on the
concession, Xceldiam is pleased to announce that the kimberlite discovery
(HS-1), which was reported on the 25th July 2006 to be 12 hectares in extent and
buried beneath 23m of overburden, has now been shown through additional drilling
to be 18 hectares in surface area.  Diatreme facies kimberlite is now known to
outcrop at surface in parts of the pipe.



Diatreme facies kimberlite was also intersected at a shallow depth (20m) in
target area HS-16, situated in the Nacavuri valley north of the base camp.  The
dimensions and character of this pipe are currently being determined by further
drilling.



Six other magnetic anomalies have been tested by drilling but they have been
downgraded due to excessive depth, or producing negative results.   The current
strategy of restricting drill-hole depth to a maximum of 100m will be continued
through the reconnaissance drilling phase.  Deeper drilling will at a later
stage be conducted on discoveries that yield favourable analytical results.



Core samples from the intersections of various kimberlite facies in each target
have been prepared for shipping to a laboratory for detailed mineralogical and
micro diamond analytical results. These are expected to be announced in the
first quarter of 2007.



To date approximately 1200 metres have been drilled on the concession with a
further 400 metres planned for drilling before the year end, on targets in the
south-central portion of the concession.



The Board is confident that important new discoveries will be made as the
remainder of the first-pass drilling targets are investigated and evaluated in
the course of the current drilling program.



Tim George, CEO Xceldiam commented "We are delighted to have hit a further
kimberlite at these shallow depths and look forward to assessing the mineralogy
results With our team committing to working through the Christmas period, and
access routes to further targets having been cleared we are confident that
further kimberlite intersections will be achieved in the near term"





                             www.xceldiamgroup.com



For further information, please contact:

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

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

David Youngman, WH Ireland Limited              [phone]









Notes:

Over 70 kimberlitic type anomalies were identified following completion in May
2005 of the 22,000 line kilometre total magnetic radiometric and topographic
aerial survey over the entire concession. Of these, 20 targets were prioritised
for immediate drilling with the remaining 50 earmarked for drilling pending the
results of this programme.



The Sullivan diamond core drilling rig, which was mobilised at the Luangue
Concession in the second quarter of 2006, is set up to recover two and half inch
diameter core up to depths of 400 metres and is operated by Gem Drill CC;
sub-contractors with several years of kimberlite drilling experience in Angola.




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END

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