Archangel Diamond Corporation negotiating a private placement of common shares

    TORONTO, June 4 /CNW/ - Archangel Diamond Corporation ("Archangel" or the
"Corporation") (TSXV: AAD) announces that it has entered into a non-binding
term sheet with an arms' length party in connection with a proposed
non-brokered private placement of common shares in the capital of the
Corporation at a price not to exceed CDN$0.05 per share for aggregate proceeds
of US$13.75 million.
    The funds made available through the private placement will be used to
settle current debts of the Corporation, provide funds to continue pursuit of
its legal claims in Stockholm and Colorado and necessary working capital.
    As the proposed non-brokered private placement will constitute a "change
of control" for the purposes of the policies of the TSX Venture Exchange the
transaction will be subject to the approval of a simple majority of the
current shareholders of the Corporation. Archangel anticipates obtaining, and
therefore the private placement is conditional upon, approval by way of the
written consent of its majority controlling shareholder, Cencan S.A., in lieu
of a special meeting of shareholders. Completion of this proposed private
placement will otherwise be subject to satisfactory due diligence by the
proposed subscriber; the negotiation, execution and delivery of definitive
agreements; and applicable regulatory approvals. Any securities to be issued
will be subject to a hold period of four months and one day from the closing
date in accordance with the rules and policies of the TSX Venture Exchange and
applicable Canadian securities laws.
    Subject to satisfaction of the applicable condition precedents, the
Corporation anticipates that the proposed private placement will be completed
on or before June 30, 2009.
    Management of the Corporation cannot comment on recent speculation
concerning its major shareholder Cencan S.A. and has no knowledge as to
whether Cencan S.A. has agreed to sell its controlling stake in Archangel
Diamond Corporation (ADC).

FINANCIAL PROJECTIONS - This news release contains "forward-looking
statements", within the meaning of applicable Canadian securities legislation.
Forward-looking statements include, but are not limited to, statements with
respect to the outcome of future negotiations, completion of the Transaction,
execution of definitive agreements, exercise of future call rights, success of
financing activities, identification or upgrade of mineral resources,
requirements for additional capital, government regulation, results of future
diamond exploration, results of diamond marketing, changes in legal
requirements, changes in the political environment, environmental liabilities
and title disputes. Generally, these forward-looking statements can be
identified by the use of forward-looking terminology such as "plans",
"expects" or "does not expect", "is expected", "budget", "scheduled",
"estimates", "forecasts", "intends", "anticipates" or "does not anticipate",
or "believes", or variations of such words and phrases or state that certain
actions, events or results "may", "could", "would", "might" or "will be
taken", "occur" or "be achieved". Forward-looking statements are subject to
known and unknown risks, uncertainties and other factors that may cause the
actual outcomes, results, level of activity, performance or achievements of
Archangel Diamond Corporation to be materially different from those expressed
or implied by such forward-looking statements, including but not limited to:
risks described in the above news release; those risks set out in Archangel's
disclosure documents and its annual, interim management discussion and
analysis and annual reports. Although Archangel has attempted to identify
important factors that could cause actual results to differ materially from
those contained in forward-looking statements, there may be other factors that
cause results not to be as anticipated, estimated or intended. There can be no
assurance that such statements will prove to be accurate, as actual results
and future events could differ materially from those anticipated in such
statements. Accordingly, readers should not place undue reliance on
forward-looking statements. Archangel does not undertake to update any
forward-looking statements or financial projections, except in accordance with
applicable securities laws.

    Neither the TSX Venture Exchange nor its Regulation Services Provider (as
    that term is defined in the policies of the TSX Venture Exchange) accepts
    responsibility for the adequacy or accuracy of this news release.

For further information:

For further information: Ms. Jocelyn Fraser, Archangel Diamond
Corporation - Media Enquiries, Vancouver, British Columbia, Canada, Tel: (604)
731-6164,; Mr. Steven Thomas, Chief
Financial Officer, Archangel Diamond Corporation, 65 Overlea Boulevard, Suite
400, Toronto, Ontario, M4H 1P1, Canada, Tel: (416) 423-1600,

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