Everfor Diamonds plc - Progress Report

FIELD OPERATIONS

Fieldwork was complete in 2004 at the end of the first week in October, with approximately 3100 stream and soil samples having been collected in the summer sampling season. This figure was an approximately 50% increase on initially planned numbers and reflects the enthusiasm of the sampling teams.

Two airborne geophysical surveys were completed in 2004 – the 2000 km2 magnetic survey of the western half of the Tulomo-Teriberskaya licence and the approximately 600 km2 combined magnetic and electromagnetic survey in the Ermakovskaya licence. A planned survey in Pulongskaya required to be re-scheduled from both safety and weather points of view. This postponed survey re-started in early April 2005 and is almost complete.

SAMPLE TREATMENT and RESULTS

All of the samples were shipped as “grey” concentrates to the MSA Geosciences laboratories in South Africa. To date, approximately 1400 sample results have been returned, 200 of which are positive with one or more varieties of kimberlitic indicator minerals. Surface texture studies and microprobe analyses are underway.

GEOPHYSICAL RESULTS – ADDITIONAL FIELDWORK

In the Ermakovskaya area, approximately 50 EM/Magnetic anomalies were interpreted from the dataset. Initial quality control checks on the Tulomo-Teriberskaya data revealed fifteen anomalies. Those anomalies either near the known kimberlites or with coincident positive indicator mineral results have been examined in greater detail and a very limited number were proposed for drilling before the spring 2005 thaw. No results are yet reported from the current drilling, although a number of anomalies in the Ermakovskaya area were drilled during previous prospecting programmes. There appear to be olivine melilitites in western Ermakovskaya, with kimberlite-like geophysical signatures. This is not unexpected and is not seen as a downgrading factor, given the presence of similar rock types to the west of the Archangel kimberlite province.

SUMMARY

In Everfor’s first year of field operations, work targets were largely met or exceeded. Data has been received on a continuous basis in the “off” season, allowing focused programmes for the succeeding years to be formulated. Drilling is taking place on selected anomalies, approximately one year ahead of schedule.