Etruscan Diamonds regains control of the Tirisano Mine in South Africa



    HALIFAX, Sept. 19 /CNW/ - Etruscan Resources Inc. (EET.TSX) announced
today that Etruscan Diamonds (Pty) Ltd. ("Etruscan Diamonds") has reached an
agreement with Mvelaphanda Exploration (Pty) Ltd. ("Mvelaphanda Exploration")
to acquire Mvelaphanda Exploration's 50% interest in the Tirisano Diamond Mine
located in the Ventersdorp Alluvial Diamond District of South Africa. Etruscan
Diamonds owns the remaining 50%. The Tirisano Diamond Mine is located adjacent
to the Hartbeesglaate property where Etruscan Diamonds is presently
undertaking a pre-feasibility study. Etruscan Resources Inc. holds a 50.9%
ownership interest in Etruscan Diamonds and Mountain Lake Resources Inc.
(MOA.TSX-V) holds at 17.2% ownership interest in Etruscan Diamonds.

    Strategic Significance of the Acquisition of the Tirisano Diamond Mine
    ----------------------------------------------------------------------

    Having control of the Tirisano Diamond Mine operation and surrounding
Nooitgedacht property will allow Etruscan Diamonds to consolidate the
development of the significant diamond resources on the Nooitgedacht property
with those on the adjacent Hartbeestlaagte and Zwartrand properties. The
project on the combined properties will be known as the "Blue Gum Project" .
    A National Instrument 43-101 compliant independent technical report dated
January 29, 2007 prepared by Dr. Tania Marshall of Explorations Unlimited
estimated the in situ inferred diamond resources on the Hartbeestlaagte
property to be 16.2 million cubic meters at an average grade of 3.18 carats
per hundred cubic meters (approximately 500,000 carats). Contract mining, bulk
sampling and drilling activities are currently underway to upgrade this
National Instrument 43-101 inferred resource into the indicated category. A
National Instrument 43-101 compliant independent technical report dated August
13, 2003 by RSG Global estimated the in situ indicated diamond resources on
the Nooitgedacht property to be 12.3 million cubic meters at an average grade
of 2.8 carats per hundred cubic meters. As a result of this acquisition, the
resource calculations on the Nooitgedacht property, where the Tirisano Mine is
located, will now be updated and included as part of the pre-feasibility study
now underway.
    Work will commence immediately to restart the Tirisano plant to provide
additional processing capacity for the bulk samples from the Hartbeestlaagte
and Nooitgedacht properties as part of the pre-feasibility work. Upon
successful completion of the pre-feasibility study, a public offering is
planned together with an application for a stock exchange listing in order to
advance the Blue Gum Project to full scale production.
    Kevin MacNeill, the President of Etruscan Diamonds Limited. stated: "We
are delighted to have reached an agreement with Mvelaphanda Exploration to
acquire their interest in the Tirisano Diamond Mine and surrounding
Nooitgedacht property. Development of the three properties together as the
"Blue Gum Project" provides the economies of scale to deliver a very robust
project. The additional processing capacity provided by the Tirisano plant
over and above the newly purchased pan plant will allow us to double the
amount of bulk sample gravels being processed as part of the pre-feasibility
study to 100,000 cubic meters per month. This will be the first phase of the
project which we estimate will be completed by February 2008. The second
phase, to be funded with the proceeds from the planned initial public offering
by Etruscan Diamonds Limited in the spring of 2008, will incorporate the
existing DMS plant at Tirisano into a new plant that will increase processing
throughput to 260,000 cubic meters per month."

    Background on the Tirisano Diamond Mine
    ---------------------------------------

    Over the last five years, Etruscan Diamonds has been acquiring strategic
properties in the Ventersdorp and Lichtenburg alluvial diamond districts,
located approximately 150 kilometers and 200 kilometers respectively west of
Johannesburg, South Africa. The Tirisano Diamond Mine represented the first
phase of development for the Ventersdorp group of properties. A National
Instrument 43-101 compliant independent resource estimate for the Tirisano
Diamond Mine was completed in August 2003 by RSG Global (Pty) Limited of
Johannesburg, South Africa. RSG calculated the in situ indicated diamond
resources to be 12.3 million cubic meters at an average grade of 2.8 carats
per hundred cubic meters (350,000 carats). Total diamond production from the
Tirisano Diamond Mine up to the end of November 2005 was in excess of
23,000 carats.
    The Tirisano Diamond Mine was initially operated by Etruscan Diamonds. In
May 2004, Etruscan Diamonds entered into an agreement with Mvelaphanda
Exploration to facilitate the expansion of the Tirisano Diamond Mine and
Mvelaphanda Exploration became the operator of the Mine. In June 2005,
Mvelaphanda Exploration earned a 50% interest in the Tirisano Diamond Mine by
commissioning a plant with a design capacity of 300 cubic metric tons per hour
throughput and a 50/50 joint venture between Etruscan Diamonds and Mvelaphanda
Exploration was formed with Mvelaphanda Exploration continuing as operator.
The plant consists of a screening and scrubbing circuit with a dense media
separation plant. This plant, in its present configuration, can efficiently
treat 50,000 cubic meters per month. During its period of operatorship,
Mvelaphanda Exploration incurred capital and net operating expenditures of in
excess of CDN$13million.
    Until the fall of 2005, the recovered grade from operations was
consistently below the average forecast grade (2.8 carats per hundred cubic
meters) because a large volume of uneconomic gravel was processed. In the fall
of 2005 mining activities progressed into the deeper gravel packages. During
the month of November 2005 the grade of diamonds averaged 2.95 carats per
hundred cubic meters and the last 3,200 cubic meters of gravel processed
averaged 5.4 carats per hundred cubic meters. However, as a result of the
period over period operating losses and the low rand/dollar exchange rate the
operation was placed on care and maintenance at the end of November 2005.
During this period geological work was completed to better understand the
geological model. This work resulted in the identification of three distinct
gravel packages; the upper gravel package ("UGP"), the pebbly-clay package
("PCP") and the lower gravel package ("LGP").
    Past production results indicate that the PCP gravels are sub-economic
and should be treated as waste. Production records during the final month of
operation in November of 2005 showed a clear and significant increase in grade
as the mining progressed into the lower gravel package (the final feed graded
in excess of five carats per hundred cubic meters). The new geological model
generated through bulk sampling and drilling during this period demonstrated
that a large volume of the PCP gravels were sub-economic and should have been
classified as waste. In the last 10 months of operation, in excess of 80% of
the throughput consisted of the sub-economic PCP gravels. With the benefit of
the new geological model and recognition of ore versus waste in the gravel
packages, grade control can now be managed in the pits.
    Past mining operations at the Tirisano Diamond Mine provided consistent
and reliable data with respect to the value of the diamonds. Diamond sales
averaged US$489 per carat over the period 2003 to 2005 and during the last
year of operation averaged US$566 per carat. The high value of the diamonds is
attributable to the average stone size and the high quality of the stones.
    It is anticipated that mining operations at Tirisano will recommence in
early 2008 after the completion of the bulk sampling of the Hartbeestlaagte
gravels. The plant facility has remained in good condition and minimal capital
expenditures are expected in order to recommence operations. The pits have
continued to be dewatered for purposes of facilitating a subsequent restart of
operations. As a result of the prior mining, it is expected that limited
additional stripping will be required and better recovered grades are forecast
as a result of the exposure of the higher-grade diamondiferous LGP gravel
package at the lower levels.

    Hartbeestlaagte Property
    ------------------------

    The Hartbeestlaagte property is adjacent to the Nooitgedacht property
where the Tirisano Mine is located. An independent National Instrument 43-101
resource estimate for the Hartbeestlaagte property completed by Dr. Marshall
in January, 2007 estimated the inferred diamond resources to be 16.2 million
cubic meters of gravels at an average grade of 3.18 carats per hundred cubic
meters (approximately 500,000 carats) at an average sales value of USD$400 per
carat of actual sales of recovered diamonds. The National Instrument 43-101
report confirms that, in addition to the inferred resource, a large area of
exploration potential exists including an indefinable volume of material that
is located below the present drilling level in the large sink holes existing
on the property. Drilling to date has been limited to a vertical depth of
117 meters in these areas. Geophysical modeling is unable to identify the base
of the bedrock in these structures with any accuracy nor has the drill program
penetrated these thick gravels. As a result, it has not been possible to
estimate what volume of gravel might exist, though it is expected to be
substantial.
    In accordance with the recommendations in the National Instrument 43-101
report, Etruscan Diamonds is undertaking additional drilling and sampling to
upgrade the currently identified inferred resources to the indicated category.
Further drilling and bulk sampling is also being undertaken to identify
additional inferred resources and further exploration potential. Concurrently
with the indicated resource study, a preliminary feasibility study is being
completed to convert the indicated resources into probable reserves.
    Etruscan Diamonds has commissioned the construction and delivery of a new
50,000 cubic meter per month bulk sampling plant to assist with the
pre-feasibility study work. The plant consists of four 16 foot pans, two 
2.5 x 6 meter scrubbers and two X-ray units. The pans will do the primary
concentration and the pan concentrate will be conveyed to a DMS feed surge
bin. The pan concentrate will then be pumped from the bin to the existing
Bateman DMS located at the Tirisano Diamond Mine for secondary concentration.
The DMS concentrate will be sent to the final recovery units for final sorting
in a glove box. This configuration will upgrade the capacity of the plant to
handle more volume as compared to a conventional washing and screening/DMS set
up.

    Acquisition Agreement Terms
    ---------------------------

    Mvelaphanda Exploration has agreed to transfer its 50% interest in the
Tirisano Diamond Mine Joint Venture to Etruscan Diamonds in consideration for
the payment of R25 million (approximately CDN$ 3.7 million) and the delivery
to Mvelaphanda Exploration of R25 million worth of shares of Etruscan
Resources Inc., the exact number to be determined based on the 20 day volume
weighted average trading price of the shares of Etruscan on the Toronto Stock
Exchange immediately prior to closing. The acquisition is expected to close in
early October.

    BEE Partner
    -----------

    Etruscan Diamonds has also reached an agreement in principle with Mogopa
Minerals (Pty) Ltd. ("Mogopa") to transfer a 26% interest in the Tirisano
Diamond Mine to Mogopa in consideration for the payment of R26 million. Mogopa
will replace Mvelaphanda Exploration as the entity providing the black
economic empowerment for the project as required by South African mineral
legislation. Mogopa is also Etruscan Diamonds' Black Economic Empowerment
partner on the Hartbeestlaagte and Zwartrand properties. Mogopa has accepted
an indicative term sheet from the Industrial Development Corporation of South
Africa Limited ("IDC") to finance Mogopa's acquisition of the 26% interest in
the Tirisano Mine Joint Venture. Etruscan Diamonds has also accepted an
indicative term sheet from the IDC to provide an additional R25 million to
fund additional working capital requirements to reactivate the Tirisano Mine.
These financings are subject to approval by the IDC's credit committee. It is
anticipated that the Mvelaphanda Exploration acquisition and Mogopa sale will
be cash neutral to Etruscan Diamonds.

    Diamond Asset Restructuring
    ---------------------------

    Earlier this year Etruscan Resources and Mountain Lake Resources Inc.
(MOA.TSX-V) completed the formation of a new company named Etruscan Diamonds
Limited ("EDL") to hold their respective interests in their diamond assets in
South Africa. Each of Etruscan and Mountain Lake, together with other third
parties, transferred all of their interests (both debt and equity) in Etruscan
Diamonds for shares of EDL.
    In March of this year EDL successfully completed a CDN$11 million private
placement financing. The proceeds of the private placement are being used
primarily to continue the exploration program and undertake the
pre-feasibility study on the Hartbeestlaagte property.

    Ventersdorp Diamond District
    ----------------------------

    The Ventersdorp Diamond District covers approximately 5,000 km2 and
mining of alluvial diamonds has been carried out in the district since 1904.
Total reported production from the Ventersdorp District during the period 1926
to 1984 is estimated at 667,000 carats. Etruscan Diamonds holds the dominant
land position in the Ventersdorp District with two mining permits and
17 prospecting permits with applications for 5 additional prospecting permits
pending. Etruscan Diamond's efforts to prioritize its land holdings in the
Ventersdorp District have been assisted by the results of an airborne gravity
survey conducted over an area of approximately 4,000 km2. The survey was
conducted by Bell Geospace Ltd. of Aberdeen, Scotland and identified a number
of prospective sinkhole features. Large sinkhole features in the Ventersdorp
District are known to be associated with diamondiferous gravels.
    Robert Harris P. Eng and Vice President of Operations of Etruscan
Resources Inc. is the Qualified Person overseeing the diamond projects in
South Africa.

    About Etruscan Resources Inc.

    Etruscan Resources Inc. is a gold focused Canadian junior mining company
with dominant land positions in district scale gold belts covering more than
10,000 square kilometers in West Africa. Its principal properties include the
Youga Gold Project in Burkina Faso which has entered its final phase of
construction (Press release dated July 5, 2007), the Agbaou Gold Project in
Côte d'Ivoire with an 11,000 meter feasibility study diamond drilling program
in progress (Press release dated May 31, 2007), the Diba Gold Project in Mali
where a major drill program was recently completed (Press release dated July
26, 2007), the Finkolo Gold Project in Mali where an 8,200 meter reverse
circulation and diamond drilling program is being carried out (Press release
dated August 30, 2007) and the Banfora Gold Belt in Burkina Faso with eight
major gold targets identified and where a single sample auger drilling program
began in March 2007 (Press release dated November 27, 2006). Etruscan recently
announced a significant acquisition of strategic properties in Ghana (Press
release dated August 7, 2007). Etruscan also has a 52% interest in Etruscan
Diamonds Limited which has a dominant land position in the Ventersdorp Diamond
District located in South Africa. (Press release dated March 14, 2007). The
common shares of Etruscan are traded on The TSX Exchange under the symbol
"EET". More extensive information on Etruscan can be found on its home page at
http://www.etruscan.com.

    About the Mogopa Community

    The Mogopa community, through their trust, created the company Mogopa
Minerals (Pty) Ltd. to oversee all mining related interests for the community.
The community has about 350 families and is located in the vicinity of the
mining area. Etruscan Diamonds and the Mogopa community have shared a long
positive working relationship. This relationship made it possible for the
creation of the current sustainable farming projects on community land.

    This press release may contain certain forward-looking statements which
involve known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of the Company to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Forward-looking
statements may include statements regarding exploration results and budgets,
mineral reserve and resource estimates, work programs, capital expenditures,
mine operating costs, production targets and timetables, future commercial
production, strategic plans, market price of precious metals or other
statements that are not statements of fact. Although the Company believes the
expectations reflected in such forward-looking statements are reasonable, it
can give no assurance that such expectations will prove to have been correct.
Various factors that may affect future results include, but are not limited
to: fluctuations in market prices of precious metals; foreign currency
exchange fluctuations; risks relating to mining exploration and development
including reserve estimation and costs and timing of commercial production;
requirements for additional financing; political and regulatory risks, and
other risks and uncertainties described in the Company's annual information
form filed with the Canadian Securities regulators on SEDAR (www.sedar.com).
Accordingly, readers should not place undue reliance on forward-looking
statements.

    NO REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE CONTENT OF THIS
    RELEASE




For further information:

For further information: from Etruscan contact: Richard Gordon, Investor
Relations, (877) 465-3674, Fax: (902) 832-6702, rgordon@etruscan.com; Tony
Hayes, (866) 638-3338, Fax: (905) 468-8407, thayes@etruscan.com

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