Kimberlite Exploration Update

RNS Number:6501G
Xceldiam Limited
25 July 2006



                                Xceldiam Limited

                         ("Xceldiam" or "the Company")

                         Kimberlite Exploration Update

          Kimberlitic intersections found on first prioritised target


Xceldiam Limited (AIM: XLD), the specialist Angolan diamond exploration company,
today announces that core drilling has intersected sedimentary facies kimberlite
at 23 metres on the first of 20 prioritised targets.  Drilling has been underway
on the Company's Luangue Concession for less than a week and excellent progress
is being made.  The intersection is consistent with the Company's consulting
geophysicists' interpretation and geologists' expectations as significant
overlying crater facies is generally found above the Angolan kimberlite pipes.


The target (HS-1) was selected on the basis of its size (indicated by the
aeromagnetic survey to be in excess of 12 hectares), anticipated proximity to
surface and the occurrence of indicator minerals in the alluvial diamond
workings in the surrounding area, all of which showed potential for a nearby
kimberlite source.


Mineralogical analysis of indicator minerals from the recovered core will
confirm whether the kimberlite is potentially diamondiferous and hence whether
further delineation and large diameter drilling should be undertaken  Once
drilling on this initial target is completed , the remaining 19 priority targets
will be drilled for confirmation of their kimberlitic nature.  The Sullivan
drilling rig being used on the Luangue Concession is set up to recover two and
half inch diameter core up to depths of 400 metres and is operated by Gem Drill
which has several years of kimberlite drilling experience in Angola.


Tim George, Chairman and Chief Executive Officer, commented: "It is particularly
promising to have intersected kimberlite at shallow depths on our first drill
hole.  There remain 19 prioritised targets to be drilled and undergo
mineralogical testing over the coming months with a view to initiating sampling
via large diameter drilling on those with positive outcomes.  With further
consideration still to be given to the first pass drill holes on the remaining
50 significant anomalies identified on the Luangue Concession, we are confident
the significant potential of Projecto Luangue will continue to emerge."


                             www.xceldiamgroup.com



For further information, please contact:

Xceldiam Limited
Tim George                                              [phone]


Conduit PR
Angus Prentice                                          [phone]
                                                        [phone]
Leesa Peters                                            [phone]

WH Ireland Limited
David Youngman                                          [phone]


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            The company news service from the London Stock Exchange
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