Drilling Report

RNS Number:4929M
Xceldiam Limited
22 November 2006

22 November 2006

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


                          Alluvial Exploration Update


Initial Alluvial Processing at the Luangue Concession in Angola Confirms
Diamondiferous Nature


*  Both Canguvo and Sampoio- Ngombo bulk sampling programmes confirm
   diamondiferous nature of the alluvial deposits

*  18.21 carat high quality gem diamond discovered in Canguvo area


Xceldiam's wholly owned subsidiary, Frannor Investments & Finance Limited 
("Frannor") announced positive early signs from its alluvial diamond operations
today.


Frannor operates in association with the Angolan parastatal Endiama and local
partner Bapsil (the "Association").


To date, two areas have been the focus of exploration by the Association for
diamond bearing alluvial gravels on the 3000 km2 Luangue concession. These are
the Canguvo area in the central north, and the Sampoio-Ngombo corridor along the
Luangue River in the central area, where a combined 200 000 cubic metres of
alluvial gravels has been delineated. Initial sampling results here indicate
encouraging recoveries of gem quality diamonds, in particular, manifested by the
recovery of an 18.21 carat gem quality diamond from the Canguvo area.


Diamond recoveries from these gravels are yet to be confirmed as being
statistically representative in terms of defining an economic resource however
it is particularly encouraging at this early stage to see the quality of the
diamonds in the Canguvo area, and the concentrations of diamonds in the Ngombo
area.


Bulk sampling of the deposits will continue to be processed through the sampling
plants with a view to defining the economic potential of the areas in the early
half of 2007.


Tim George, Xceldiam's CEO, commented "These are early signs and further work is
being carried out - but it is highly encouraging to be able to confirm that our
alluvials are definitely diamondiferous and the 18 carat diamond recovered from
the Canguvo area indicates the potential for large, high quality stones from the
Luangue project."


                             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]



                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

DRLUUSWRNARAURA