Drilling Report

SouthernEra Diamonds 2006 Bulk Sample Averages 0.88 Carats per Tonne from Main Lobe Pyroclastic Kimberlite at DO-27 Pipe, WO Diamond Project, NWT, Canada Shares issued and outstanding: 160,054,229 TSX: SDM AIM: SRE - High-grade portion of pipe extends over an area three times larger than area tested in 2005 - 7.11, 3.91, 2.34, 2.11, 1.83, 1.56, and 1.55 carat diamonds recovered TORONTO, ON AND LONDON, UK, Sept. 5 /CNW/ - SouthernEra Diamonds Inc. (TSX: SDM; AIM: SRE) announced today that it has been advised by Peregrine Diamonds Ltd. ("Peregrine"), operating partner of the WO Project Joint Venture, that the average grade of the 2006 bulk sample from the Main Lobe pyroclastic kimberlite of the DO-27 pipe is 0.88 carats per tonne. These results corroborate the bulk sample results from last year and confirm that the grade is consistent over an area three times larger than the area which was tested in 2005. Furthermore, the pyroclastic kimberlite collected from the North East Lobe portion of the DO-27 pipe returned an average grade of 0.85 carats per tonne which is significantly higher than previously reported. The DO-27 pipe is located 23 kilometers southeast of the Diavik(TM) Diamond Mine, N.W.T., Canada, is over 9 hectares in size, and is comprised of a Main Lobe and a smaller contiguous North East Lobe. The joint venture partners drilled a total of 12 large diameter, reverse circulation ("RC") drill holes to a maximum depth of 403 metres during the winter of 2006 which resulted in the collection of 548 dry tonnes of kimberlite material (566 wet tonnes). A total of 8855 diamonds were recovered using a 1mm sieve size cut-off. Of this total, 49 diamonds larger than one-half carat and 13 diamonds greater than 1 carat were recovered, including 7.11, 3.91, 2.34, 2.11, 1.83, 1.56, and 1.55 carat stones, confirming that DO-27 contains a significant population of larger diamonds. The diamonds recovered from the 2006 program included a 7.11 carat, light brown, slightly distorted octahedral gem; a 1.83 carat, near white, complex octahedral gem; and an irregular white, 1.55 carat gem. This year's drill program was a follow up to an initial 6-hole, large diameter RC drill program, completed during the winter of 2005, which resulted in the collection of 151 dry tonnes of kimberlite. The initial 6 holes were drilled into the Main Lobe and the grades of these six holes ranged from 0.70 to 1.03 carats per tonne, averaging 0.90 carats per tonne. The average grade within the Main Lobe pyroclastic kimberlite that is Cr-diopside rich, was 0.98 carats per tonne (see press release dated 14th June 2005). The grades and tonnages were calculated using measured and estimated hole dimensions and measured specific gravities. All density measurements were performed at the Teck Cominco Global Discovery Laboratory in Vancouver. As with the 2005 sample, the 2006 sample was processed at the bulk sample test plant at BHP Billiton's Ekati(TM) Diamond Mine. Of the twelve holes drilled during 2006, one hole did not reach the target depth as it was stopped in overburden due to drilling complications. The remaining 11 holes reached depths ranging from 53 to 403 metres and all ended in kimberlite (see map showing drill hole locations on SouthernEra's website). The RC holes have been subdivided into three groups according to where they were drilled into the DO-27 pipe. These groups are: the Main Lobe-Pyroclastic Kimberlite, the North East Lobe-Pyroclastic Kimberlite and the North East Lobe-Other Lithologies (found below the pyroclastic kimberlite) which includes hypabyssal kimberlite and mixed lithologies. Despite the fact that these Other Lithologies form a volumetrically minor component at DO-27, diamonds weighing 2.34, 1.56, 0.81 and 0.51 carats were recovered from these lithologies. The individual grades and specific diamond information for the 2006 and previously announced 2005 RC holes in both the Main Lobe and North East Lobe are summarized below: 2006 Main Lobe - Pyroclastic Kimberlite ------------------------------------------------------------------------- No. stones (greater Largest RC Depth Interval Carats/ than)1/2 Stones Hole (m) (m) Tonnes(x) Carats Tonne carat (carats) ------------------------------------------------------------------------- L0602 52 - 403 351 79.89 72.78 0.91 11 1.12, 1.02, 0.73 ------------------------------------------------------------------------- L0605 42 - 53 11 1.96 2.12 1.08 - ------------------------------------------------------------------------- L0606 48 - 180 132 42.96 39.55 0.92 2 0.65, 0.61 ------------------------------------------------------------------------- L0607 56 - 314 258 56.62 48.00 0.85 3 1.13, 0.67, 0.61 ------------------------------------------------------------------------- L0608 51 - 240 189 44.04 41.94 0.95 8 1.83, 1.04, 0.91 ------------------------------------------------------------------------- L0609 50 - 382 332 83.83 71.21 0.85 7 1.52, 1.12, 1.00 ------------------------------------------------------------------------- L0610 57 - 145 88 20.13 16.38 0.81 1 0.63 ------------------------------------------------------------------------- L0612 56 - 109 53 10.89 8.84 0.81 - ------------------------------------------------------------------------- Total 340.33 300.82 0.88 32 ------------------------------------------------------------------------- (x) dry tonnes 2006 North East Lobe - Pyroclastic Kimberlite ------------------------------------------------------------------------- No. stones (greater Largest RC Depth Interval Carats/ than)1/2 Stones Hole (m) (m) Tonnes(x) Carats Tonne carat (carats) ------------------------------------------------------------------------- L0601 40 - 85 45 20.69 16.27 0.79 3 0.93, 0.68, 0.5 ------------------------------------------------------------------------- L0603 42 - 123 81 14.61 9.35 0.64 - ------------------------------------------------------------------------- L0604 39 - 147 108 69.09 63.45 0.92 8 7.11, 3.91, 2.11 ------------------------------------------------------------------------- Total 104.39 89.07 0.85 11 ------------------------------------------------------------------------- (x) dry tonnes 2006 North East Lobe - Other Lithologies including Hypabyssal Kimberlite& Intersections of Mixed Lithologies ------------------------------------------------------------------------- No. stones (greater Largest RC Depth Interval Carats/ than)1/2 Stones Hole (m) (m) Tonnes(x) Carats Tonne carat (carats) ------------------------------------------------------------------------- L0603 123 - 228 105 23.97 3.58 0.15 1 0.51 ------------------------------------------------------------------------- L0604 147 - 246 99 79.67 33.78 0.42 5 2.34, 1.56, 0.81 ------------------------------------------------------------------------- Total 103.64 37.36 0.36 6 ------------------------------------------------------------------------- (x) dry tonnes 2005 Main Lobe - Pyroclastic Kimberlite (previously released) No. stones (greater Largest RC Depth Interval Carats/ than)1/2 Stones Hole (m) (m) Tonnes(x) Carats Tonne carat (carats) ------------------------------------------------------------------------- RC1 56.5 - 196 139.5 45.74 47.32 1.03 4 2.93, 1.62 ------------------------------------------------------------------------- RC2 56.5 - 124 67.5 28.96 27.66 0.96 5 1.85, 0.96, 0.94 ------------------------------------------------------------------------- RC3 60 - 190.5 130.5 42.80 29.93 0.70 7 0.98 ------------------------------------------------------------------------- RC4 57 - 93.5 36.5 12.02 11.99 1.00 1 2.66 ------------------------------------------------------------------------- RC5 59 - 83 24 12.20 11.66 0.96 3 0.76 ------------------------------------------------------------------------- RC6 52 - 77 25 9.54 7.4 0.78 1 0.5 ------------------------------------------------------------------------- Total 151.26 135.96 0.90 21 ------------------------------------------------------------------------- (x) dry tonnes 2005 and 2006 Main Lobe - Pyroclastic Kimberlite Combined Results Interval Carats/ RC Hole No. Depth (m) (m) Tonnes(x) Carats Tonne ------------------------------------------------------------------------- RC1 (2005) 56.5 to 196 139.5 45.74 47.32 1.03 ------------------------------------------------------------------------- RC2 56.5 to 124 67.5 28.96 27.66 0.96 ------------------------------------------------------------------------- RC3 60 to 190.5 130.5 42.80 29.93 0.70 ------------------------------------------------------------------------- RC4 57 to 93.5 36.5 12.02 11.99 1.00 ------------------------------------------------------------------------- RC5 59 to 83 24 12.20 11.66 0.96 ------------------------------------------------------------------------- RC6 52 to 77 25 9.54 7.40 0.78 ------------------------------------------------------------------------- L0602 (2006) 52 to 403 351 79.89 72.78 0.91 ------------------------------------------------------------------------- L0605 42 to 53 11 1.96 2.12 1.08 ------------------------------------------------------------------------- L0606 48 to 180 132 42.96 39.55 0.92 ------------------------------------------------------------------------- L0607 56 to 314 258 56.62 48.00 0.85 ------------------------------------------------------------------------- L0608 51 to 240 189 44.04 41.94 0.95 ------------------------------------------------------------------------- L0609 50 to 382 332 83.83 71.21 0.85 ------------------------------------------------------------------------- L0610 57 to 145 88 20.13 16.38 0.81 ------------------------------------------------------------------------- L0612 56 to 109 53 10.89 8.84 0.81 ------------------------------------------------------------------------- TOTAL 491.59 436.78 0.89 ------------------------------------------------------------------------- (x) dry tonnes Five of the eight 2006 RC holes drilled within the Main Lobe returned significant sections with grades above 1 carat per tonne, including hole L0602 that reached a depth of 403 metres (twice as deep as the deepest RC hole completed in 2005), which intersected 112 metres at 1.02 carts per tonne, and hole L0606 which intersected 48 metres at 1.38 carats per tonne. In the North East Lobe, the three RC holes drilled within the pyroclastic kimberlite returned an average grade of 0.85 carats per tonne as compared to the grade of 0.36 carats/tonne Kennecott Canada Exploration Inc. obtained from their underground bulk sample of the North East Lobe in 1993. These new bulk sample grades from the North East Lobe are consistent with micro-diamond results obtained by the joint venture partners from core holes drilled into this part of the pipe (see press release dated 16th March 2006) and demonstrate that the higher grade pyroclastic kimberlite portion of DO-27 may be significantly larger than previously envisaged, as drilling has proven that it extends from the Main Lobe into the North East Lobe. The diamonds have been sent to WWW International Diamond Consultants Ltd. in Antwerp, Belgium for complete valuations and diamond value/size distribution modeling work. The results of this work are expected during October, 2006. Commenting on the results, Mr. Howard Coopersmith, an international diamond expert with over 30 years experience and the external Qualified Person to Peregrine said: "The 2006 grade results are consistent with those obtained from the 2005 bulk sample and confirm that the grade and the diamonds themselves are substantially better than those from the previous 1993 Kennecott sample. The 2006 drilling covers a larger portion of the pipe, both laterally and at depth, than did the 2005 work, and, combined with the 2005 results, gives an understanding of the overall grade. The uniformity in average grade over a large portion of the pipe is very encouraging." The joint venture partners are currently drilling at DO-27 with two core rigs with the objective of testing the area between DO-27 and the nearby DO-18 kimberlite pipe where previous drill holes have intersected significant intervals of kimberlite. Drilling is also further defining the outer limits to the DO-27 pipe and completing pilot drill holes into the land-based portion of the North East Lobe of DO-27 and the DO-18 kimberlite, located approximately 700 metres north of DO-27, in preparation for large diameter RC drilling, mini-bulk sampling of both of these areas later this year. Peregrine's Vice President Exploration , Dr. Jennifer Pell, P. Geo. (BC), P. Geo. (NT/NU) is a qualified person under NI 43-101 and is the internal Qualified Person working on the DO-27 project. Mr. Howard Coopersmith, P.Geo., of Coopersmith & Associates, Colorado, USA, is the external Qualified Person. The operating partner, Peregrine, will conduct a teleconference regarding this release. The teleconference begins at 9 a.m. Vancouver, Canada time (Pacific Time) on Wednesday, September 6, 2006. Members of the news media, investors and the general public are invited to access the conference call by dialing one of the following numbers and entering access code 55647 followed by the number sign when prompted: - North American Access: 1-888-458-1598 - Vancouver Access: 604-899-1159 - Toronto Access: 416-883-0139 - Overseas Access: + 1-403-232-6311 This teleconference will be archived on Peregrine's web site until the end of September, 2006. SouthernEra holds a 4.9% interest in the WO Diamond Project. SouthernEra Diamonds is one of Canada's fully integrated diamond companies with extensive alluvial and kimberlite diamond exploration in the DRC as well as other countries including Canada, Gabon, Zimbabwe and South Africa. The Company also holds the Klipspringer Diamond Mine in South Africa and maintains an 18 percent free-carried interest in the Camafuca Diamond Project in Angola. Some statements contained in this news release are forward-looking and, therefore, involve uncertainties or risks that could cause actual results to differ materially. Such forward-looking statements include comments regarding exploration work. Actual results could differ materially from those anticipated. The Company disclaims any obligation to update forward-looking statements. For further information: SouthernEra Diamonds Inc., Howard Bird, Senior Vice President Exploration, or Sharon Allan, Investor Relations, Telephone: (416) 359-9282, Fax: (416) 359-9141, E-mail: inbox(at)southernera.com, www.southernera.com; London: 4C-Burvale, Carina Corbett, Director, Telephone: ++44 (0) 207-907-4761, Fax: ++44 (0) 207-907-4769, Email: Corbett(at)4c-burvale.co.uk (SDM. SRE)

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