Perth, Mar 11, 2008 AEST (ABN Newswire) - Australian diamond explorer North Australian Diamonds Limited (ASX: NAD)(PNK: NADLF) has increased the total JORC compliant 'Indicated and Inferred Resource' at its 100 per cent owned Merlin Diamond Project in the Northern Territory of Australia, following successful drilling into the PalSac pipe as part of phase two of the resource definition drilling programme.

This drill hole, which was angled across the pipe at an inclination of 76*, provided a kimberlite intersection of 231m, entering the pipe at a vertical depth of 205m and exiting the pipe at a vertical depth of 430m. This intersection extends the known footprint of the pipe from 300m depth to 430m depth. The areal extent of the pipe at 300m below surface is 1.06ha.

An assessment of the PalSac resources based on this new drilling information has allowed the JORC compliant total 'Indicated and Inferred Resource' to be increased from 6.72M tonne to 7.88M tonne. This resource is from the base of open-pit at 108m depth to 430m below surface.

Forward Drilling Programme

The ongoing resource definition drilling and evaluation programme will continue to be focussed on PalSac pipe and intends to extend the PalSac pipe resources to 600m below surface. If the pipe continues to maintain its gauge at depth this would see the PalSac resource increase to approximately 10.5 M tonne.

Mini-Bulk and Drill Core Samples (see Note 1 and 2)

A total of 4 mini-bulk samples, each approximately 1m3 in volume, have been collected from the Gawain open pit, along with 100kg core samples collected from selected depth intervals within the pipe. The fine diamond results from all of these samples are similar and are consistent with diamond distributions established from bulk sampling and trial production completed in 2006. All of the samples are from similar kimberlite breccia (diatreme facies) material and provides strong evidence that the established pit grade of 96 carats per hundred bank cubic meter (42 carats per hundred tonne) continue at depth within the pipe.

Additional core samples from the initial drilling are being dispatched to the Company's Wangara laboratory for fine diamond recovery and analysis.
Note 1: 96cts per hundred bank cubic meter is equivalent to 42cpht at 2.3 bulk density.Note 2: The bulk density of the kimberlite in Gawain varies from 1.8 for the weathered near surface kimberlite to 2.5 for the deeper fresher kimberlite.
Tom Reddicliffe, a full time employee of the company, has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Tom Reddicliffe consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.


John Hopkins / Tom Reddicliffe
Chairman / CEO
Tel: +61 8 9221 3355
Fax: +61 8 9221 1730

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