Everfor Diamonds plc - Start of Trading on OFEX

THE COMPANY:
Everfor Diamonds PLC ("the Company") was incorporated in the United Kingdom on 26th January 2004. The Company's principal activity is Diamond exploration in the Kola Peninsula, in the northwest of the Russian Federation. To date the Company has raised approximately GBP3 million, by way of a private placing, the vast majority of this was priced at 15 pence per share. The Company currently has working capital of GBP1.8 million.

There are 55,413,334 shares outstanding and 6,200,000 options over the Company's ordinary shares have been issued at an exercise price of 15 pence per share.

The Directors hold 12,750,000 shares which represents 23.0% of the total ordinary shares in issue.

Other major shareholders are:
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Number of ordinary shares held ordinary as a percentage of shares held issued share capital
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Elcan Nominees Limited 6,000,000 10.83%
NRI Inc 4,500,000 8.12%
Pinnacle Trustees Limited a/c 4,500,000 8.12%
Pamir declaration of trust
RAB Special Situations LP 3,333,333 6.02%
Pinnacle Trustees Limited a/c 3,000,000 5.41%
Blesk declaration of trust
Willbro Nominees Ltd 2,766,667 4.99%
LOM Securities (Bermuda) Ltd 2,150,000 3.88%
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On 16 June 2004 the Company ultimately acquired an 80% interest in three Russian companies, for a consideration of US$500,000 and 30,000,000 ordinary shares in Everfor Diamonds PLC. These subsidiaries have 100% title to each of 4 prospecting licences (Pulongskaya, Varzugskaya, Ermakovskaya and Tulomo- Teriberskaya). The licence areas, totalling 12,700sq km, are located in the Kola Peninsula, south and southeast of the region's capital, Murmansk. Each licence was issued on 10th March 2004 and each is valid until 9th March 2009.

A minority interest in the licences is held by the Vendors of the three Russian companies and is non-contributory.

SYNOPSIS OF CONDITIONS FOR EACH LICENCE:
* An exploration programme must be prepared not later than December 2004, with the programme to be agreed with the Russian Federation Ministry of Natural Resources (the Ministry) and with State ecological experts;
* Geological exploration must commence not later than 30th June 2004;
* The first stage of work to be completed by December 2006, with a report on the results of diamond exploration;
* The second stage of work to be completed by 30th June 2009, being the evaluation of the production potential of any discovered kimberlite formations;
* Presentation of a report on the results of the work for review by State experts not later than 31st December 2008;
* The licence holder must provide all the finance necessary for the completion of the required work.

There is an additional obligation upon the licence holder to prepare an analysis of the ecological conditions within the licence territory not later than 9 months from the date of registration, and to agree with the relevant State authorities, not later than 12 months from such date, a programme of annual monitoring of ecological conditions within the licence.

STRATEGY:
The principal Company strategy is to advance exploration of the licence areas as fast as is feasible, using a multi-disciplinary approach. The availability of previous results of significant interest has enabled the selection of areas for detailed sampling and simultaneous airborne geophysical surveying. Where previous results are limited or unavailable, then sampling alone has been undertaken and geophysical surveying is targeted for Year 2 of the exploration programme. Climate considerations have been accounted for with work planned around the freeze-thaw cycle pertaining in the Arctic conditions. Ground geophysics and drilling, designed to test the results of aerial geophysical surveying and summer surface sampling, can and will take place during the winter.

A parallel strategy has been to spend only what is necessary on overheads and logistical services, and to channel funds into exploration on and in the ground. This is intended to achieve early results from exploration activities so that the typical diamond exploration cycle is shortened as far as is possible. In addition, laboratories and consultants specialising in diamond-related matters have been used to expedite sample analysis and geophysical surveying.

PROJECT FUNDING:
Funding for the project will be provided by the Company on a monthly cash call, based on approved budgeted spend. Provision has been made for the maintenance of a small office in the town of Monchegorsk, in the Murmansk Region, and for the payment of specialist laboratories outside of Russia.

DIAMOND GEOLOGY & EXPLORATION:
Diamond exploration is significantly unlike most other forms of mineral exploration in terms of its execution, the analytical methods used and the significant volumes of material required to obtain grades for any deposit. However, if certain basic conditions are met, such as:
* the area is underlain by Archaean-age (greater than 2.5 Billion years old) rocks;
* there is low crustal heat flow (less than 40mW/m2) and;
* there is a lithospheric "keel" in excess of approximately 150 kilometres;
then the area can be considered to be prospective for diamondiferous source rocks. Other indications would be the presence of known diamond-bearing rocks in or adjacent to the area being considered for exploration. All of these conditions are met in the Kola Peninsula. Details on these matters, the reasons behind the choice of licence area and general information concerning Everfor Diamonds PLC may be found on the Company website http://www.everfor.com.

REVIEW OF OPERATIONS:
An exploration programme was submitted in May 2004 and work was contracted in the same month to the Central Kola Expedition ("CKE"), a Russian joint-stock company with over 20 years of experience of diamond exploration in the region. CKE have identified several areas of interest in the search for diamondiferous source rocks within our licence areas. The ecological obligations incurred in each licence have been addressed, although final agreement is awaited. It is not expected that there will be unforeseen delays in reaching this agreement. The Company has met target dates relating to various conditions imposed by the licence grants, and has put processes in place to meet future deadline and obligations.

RESULTS TO DATE:
Sampling operations for 2004 within the four Everfor licence areas in the Kola Peninsula began on schedule; sampling in two of the licences is now complete for the year and work in the remaining two will be completed on or ahead of schedule. The numbers of samples planned were, in general, revised upwards during the course of a field visit made by Everfor's Chief Operating Officer in July. Sample quality is deemed to be high.

Laboratory sample treatment has commenced in South Africa; the first visual results are expected in mid to late October.

Airborne geophysical survey contracts have been agreed for three surveys although work to date has only begun on one magnetic survey in the most northerly licence area. Everfor's consulting geophysicist has been on-site from the third week of September to effect progress in these surveys.

DIRECTORS AND TECHNICAL MANAGEMENT:

DR. SERGEY V. KURZIN - Chairman and Chief Executive Officer Dr. Kurzin is a Russian born research engineer who moved to the United Kingdom in 1990 and has been instrumental in initiatives to secure and progress several important Former Soviet Union (FSU) mining assets including Julietta: a high grade gold deposit in Magadan, Russian Federation (Bema Gold); Kupol: a high grade epithermal gold deposit in Chukotka, Russian Federation (Bema Gold); and Varvarinskoye: gold & copper skarn deposit, Kazakhstan (European Minerals Corporation).
Dr. Kurzin has been an officer and consultant for the following companies' active in the FSU:
* Bema Gold - consultant on Kupol and Julietta gold developments
* Arian Resources Corp. (acquired by Bema) - ex. VP Corporate Development
* European Mineral Corporation - ex. VP Corporate Development
* Consolidated Puma Minerals Corp. - PGM in Kola Peninsula, Russia
* Zincox - Zinc project in Kazakhstan
* Eurasia Mining plc - PGM projects in Russia
* Executive Chairman and Chief Executive Officer of Oriel Resources Plc

STEPHEN R. DATTELS - Managing Director
Mr. Dattels has been active in the London and international junior mining markets for over twenty years and has experience in mining projects in North and South America, Indonesia, Malaysia, Philippines, China and the Former Soviet Union. He is:
* A founding partner of Barrick Gold and Executive, VP and Director during its formative years from 1982-1987, responsible for equity and debt financing and acquisitions
* Founder of International Gold Resource Corporation sold to Ashanti Goldfields for an all stock transaction valued @ approx. C$130M * Managing director of Oriel Resources Plc and Executive Chairman of Caledon Resources plc, AIM's number one performing gold stock for 2003.

DONALD JAMES DUNCAN - Director and Chief Operating Officer
Mr. Duncan worked with the Anglo American/De Beers Group of companies for 25 years, 22 of which were spent in diamond exploration and mining in three continents. His last position with De Beers was Exploration Manager for the countries of Botswana and Tanzania. He is a Member of the Australian Institute of Geoscientists, qualifying as a "Competent Person" under the requirements of various stock exchanges.

After leaving De Beers at the end of 2000, Mr. Duncan undertook independent consultancy work on a variety of projects. He was able in May 2004, with the assistance of a number of personal associates, to deliver two new kimberlite discoveries for an Australian client operating in Botswana.

GEOFFREY THOMAS BUSH, MSc, FCA, Non-Executive Director
Amongst other positions Mr. Bush is also the Director of Corporate Citizenship with Diageo plc, and has extensive knowledge in international corporate social responsibility matters, as well as earlier financial and general management experience. He is former chairman of the Corporate Responsibility Group and director of Business in the Community. He has also been an adviser to a wide range of networks including the UK Committee of Inquiry on a new vision for business and the World Economic Forum global corporate citizenship initiative.

VLADIMIR PETROVICH DUBYAGIN - Consultant
Mr Dubyagin's experience includes:
* 2000-2004 Director General, OJSC Centralno-Kolska Expedition (CKE)
* 1989-2000 Chief Engineer (Administration and Logistics Manager) OJSC CKE
* 1978-1989 Chief Manager - Geophysics OJSC CKE
* 1975-1978 Senior geophysicist, Chief Manager of prospecting project in Central Karelia
* 1972-1975 Senior Engineer at Leningrad (St Petersburg) State University
* 1970-1972 Military Officer
* 1969-1970 Geophysicist at "Lengiprotrans" Institute of Education
* 1964-1969 Leningrad (St Petersburg) State University, Faculty of Geology, qualification - geologist-physicist

RISK FACTORS:
The viability of Everfor Diamonds PLC is subject to a number of risks including, but not limited to:
* Risks inherent in exploration, including inter alia, the successful location of mineral resources;
* The mineralisation, by diamond, of such resources;
* Satisfactory performance of exploration activities by competent company management and contractors;
* Poor or adverse weather conditions causing delay to the start of various exploration activities;
* The risk of material adverse change in government policies or legislation affecting exploration activities.

SUMMARY:
Everfor Diamonds PLC is, in summary, a diamond exploration company with secure tenure of licences in a highly prospective region of Russia. It has successfully fulfilled the initial obligations of the licence conditions and has put in place strategies to take the company forward. Adequate funding for the initial stages of exploration has been raised. The Company intends to release exploration results on a progressive basis and to keep share holders fully informed via its website www.everfor.com


FOR FURTHER INFORMATION:
Stephen Dattels (Managing Director) / Donal Douglas (Investor Relation)
Everfor Diamonds plc
Phone +44 (20) 7514 0590
Fax +44 (20) 7514 0591

Jonathan Willis-Richards
Loeb Aron & Company Ltd.
Phone +44 (20) 7628 1128

The Directors of the issuer accept responsibility for this announcement. Loeb Aron & Company Ltd., ("Loeb Aron & Co.") which is authorised and regulated by the Financial Services Authority, has approved this announcement for release on Newstrack. Loeb Aron & Co is acting as corporate adviser to Everfor Diamonds Plc and to no-one else and will not be responsible to anyone other than Everfor Diamonds Plc for providing the protections afforded to customers of Loeb Aron & Co or for providing advice in relation to any investment made pursuant to this announcement.

No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.