Cencan S.A. increases existing loan to US$8.8 million

    TORONTO, July 25 /CNW/ - Archangel Diamond Corporation's major
shareholder, Cencan S.A., is increasing its unsecured non-convertible,
interest bearing loan to Archangel to US$8.8 million from US$4.5 million. The
additional funds provide Archangel Diamond Corporation with sufficient income
to meet short term working capital requirements.
    Archangel Diamond's Board of Directors consider the commercial terms of
the loan to be reasonable and not less advantageous to the Company than if the
loan was obtained from an arm's length party. The original terms and
conditions of the loan, as described in a news release issued November 28,
2007, remain unchanged and repayment shall be by April 30 2009.
    The amendment of the existing term loan constitutes a related party
transaction pursuant to Multilateral Instrument 61-101 - Protection of
Minority Security Holders In Special Transactions ("MI 61-101") and is exempt
from the minority approval requirement pursuant to Section 5.7(f) - Loan to
Issuer, No Voting or Equity Component of MI 61-101 and is otherwise exempt
from the requirement to obtain an independent valuation pursuant to Section
5.5(b) - Issuer Not Listing On Specified Markets of MI 61-101.

    About Archangel Diamond Corporation

    Archangel Diamond Corporation is a junior Canadian diamond company traded
on the Toronto Stock Venture Exchange under the symbol AAD. On April 15, 2008
Archangel signed definitive agreements with LUKOIL to acquire a 49.99% equity
interest in LUKOIL's subsidiary Arkhangelskoe Geologodobychnoe Predpriyatie
(AGD) which holds the license for Verkhotina, a property located approximately
115 km north, northeast of the city of Archangelsk, in northwest Russia.
Verkhotina is the site of the Grib pipe, one of the largest known undeveloped
kimberlites in the world.

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, execution of definitive
agreement, requirements for additional capital, government regulation, risks
associated with diamond exploration, risks associated with diamond marketing,
legal risks, political risks, environmental risks 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 press 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 that are incorporated by reference herein, except in accordance
with applicable securities laws.

    The TSX Venture Exchange does not accept responsibility of the adequacy
    or accuracy of this release.

For further information:

For further information: www.archangeldiamond.com, Jocelyn Fraser, (604)
731-6164, jocelyn.fraser@communicate-pa.ca

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