Etruscan and Mountain Lake complete restructuring of diamond assets and CDN$11 million private placement


    HALIFAX, March 14 /CNW/ - Etruscan Resources Inc. (EET.TSX) and Mountain
Lake Resources Inc. (MOA.TSX-V) announced today that they have completed the
formation of a new company named Etruscan Diamonds Limited ("Etruscan
Diamonds") 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 (Pty) Limited, the entity holding their interests in the South
African diamond assets, to Etruscan Diamonds in exchange for shares of
Etruscan Diamonds. Upon completion of the restructuring, Etruscan and Mountain
Lake owned 62% and 21% respectively of Etruscan Diamonds with the balance
being held by various third parties.
    Etruscan and Mountain Lake also announced today that Etruscan Diamonds
has successfully completed a CDN$11 million private placement financing. The
proceeds of the private placement will be primarily used to continue the
exploration program and undertake a pre-feasibility study on the
Hartbeestlaagte property described below. A 43-101 compliant independent
technical report dated January 29, 2007 prepared by Dr. Tania Marshall of
Explorations Unlimited estimates 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). Upon
successful completion of the pre-feasibility study on the Hartbeestlaagte
property, Etruscan Diamonds intends to undertake a public offering and apply
for a listing on the Toronto Stock Exchange and the Johannesburg Stock
Exchange to bring the Hartbeestlaagte property into production.
    The private placement offering consisted of common shares of Etruscan
Diamonds offered at a price of CDN$2.00 per share. As a result of completion
of the private placement financing Etruscan and Mountain Lake now own 50.8%
and 17.2% respectively of Etruscan Diamonds. CIBC World Markets Inc. acted as
the private placement agent in relation to the financing.
    The restructuring and financing were undertaken by Etruscan and Mountain
Lake in order to realize the value of the diamond assets and will allow
Etruscan Diamonds to more aggressively pursue the exploration and development
of the diamond assets while Etruscan Resources Inc. focuses on the exploration
and development of its gold properties in West Africa and Mountain Lake
focuses on exploration of its gold and base metals properties in Eastern

    Hartbeestlaagte Property

    The Hartbeestlaagte property covers approximately 4,000 hectares and is
located approximately 35 kilometers due north of the town of Ventersdorp in
the Ventersdorp Alluvial Diamond District. This District covers approximately
5,000 km(2) and mining of alluvial diamonds has been carried out in the
District since 1904. Total reported production from the District during the
period 1926 to 1984 is estimated at 667,000 carats.
    Three bulk samples have been completed on the Hartbeestlaagte property,
processing over 78,000 cubic meters of Lower Gravel Package ("LGP") gravels
and recovering approximately 2,500 carats at a global grade of 3.18 carats per
hundred cubic meters with a bottom cut-off size of 1.6 millimeters. A limited
amount of Upper Gravel Package ("UGP") was also processed (approximately
12,000 cubic meters) to recover 187.7 carats at an average grade of
1.53 carats per hundred cubic meters. The treatment of the bulk samples was by
a process of scrubbing and screening followed by pan concentration and x-ray
sorting. This process has proved feasible for the treatment of the various
gravel packages and will form the basis of the commercial plant flow sheet.
    The results from the bulk sampling program have indicated that a deep
karst system exists on the Hartbeestlaagte property trending from the
northwest down to the southeast which appears to comprise a number of deep
sink holes connected by incised channels. The gravel stratigraphy comprises an
upper gravel horizon and a lower gravel unit that are both economically
diamondiferous, separated by a sub-economic finer grained pebble clay unit.
Gravity surveys and drilling have indicated that the gravel filled sink holes
extend over 100 meters in depth and may be up to 200 meters in the deeper
parts of the karst system.
    The independent 43-101 resource estimate for the Hartbeestlaagte property
completed by Dr. Marshall estimated the inferred diamond resources to be
16.2 million cubic meters of LGP 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 43-101
report confirms that, in addition to the inferred resource, a large area of
exploration potential exists in both the lower gravel package and the upper
gravel package including an indefinable volume of material that is located
below the present drilling level in the sink holes. 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 the 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. The report recommends that the prospecting
phases be completed to upgrade the inferred resource to indicated resource and
converted to probable reserves through a preliminary feasibility study as a
precursor to the commencement of full mining production.
    Etruscan Diamonds will undertake additional drilling and sampling to
upgrade the currently identified inferred resources to the indicated category.
Further drilling and bulk sampling will also be undertaken to identify
additional inferred resources and further exploration potential. Concurrently
with the indicated resource study, a preliminary feasibility study will be
completed to convert the indicated resources into probable reserves. As part
of this exploration program, an upgrade of the exploration processing plant
will be completed to allow the processing of approximately 50,000 cubic meters
per month. This activity will be funded by the proceeds of the private
placement referred to above.
    Robert Harris P. Eng and Vice President of Operations of Etruscan
Resources Inc. is the Qualified Person overseeing the diamond projects in
South Africa.

    The common shares of Etruscan are traded on The TSX Exchange under the
symbol "EET". The common shares of Mountain Lake are traded on the TSX Venture
Exchange under the symbol "MOA". More extensive information on Etruscan and
Mountain Lake can be found on their respective websites at and

    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 Companies 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 Companies believe 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 Companies' annual information
forms filed with the Canadian Securities regulators on SEDAR (
Accordingly, readers should not place undue reliance on forward-looking


For further information:

For further information: Etruscan: Richard Gordon, Investor Relations,
(877) 465-3674, Fax: (902) 832-6702; Tony Hayes, Investor Relations, (866)
638-3338, Fax: (905) 468-8407; Mountain Lake: Greg Lytle, Communications
Manager, (866) 285-5817,

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