EDN Elkedra

    MEDIA RELEASE 5 April 2006                                                       

                              ELKEDRA DIAMONDS NL                              

                       CHAPADA DIAMOND PROJECT - BRAZIL                        

          PROCESS PLANT COMMISSIONING/FIRST SALES ANTICPATED MAY 2006          

Australian-based Elkedra Diamonds NL (ASX:EDN / AIM:EDN) today announced the
commencement of dry commissioning of it's 200 tonne per hour diamond recovery
processing plant at its Chapada diamond project in Brazil ahead of an imminent
start-up of production.

Initial mine pre-stripping operations by the mining contractor have been
underway for the past month, with mining of the first diamondiferous gravels
having commenced during the last week. These gravels are currently being
stockpiled at the processing plant site in readiness for the wet commissioning
process which is expected to commence in approximately three weeks.

Mr Don Best, Elkedra's Executive Chairman, said that, all going well with the
commissioning process, the Company is expected to recover its first diamonds by
the end of April or early May with first diamond sales anticipated towards the
end of May 2006.

"We experienced a bureaucratic delay in getting the necessary import and
operating licenses for the X-ray diamond sorting machine but this hurdle has
now been cleared and the machine is currently being airfreighted from South
Africa," he said.

The Company also said that an "Operating License" for the Chapada Project had
been issued by the Brazilian environmental authorities in February, completing
all the required mining and environmental permitting processes to enable the
project to commence operations. In addition, recruitment and training of
personnel for the management of the contract mining operations and processing
plant operation is now essentially complete.

"We are very pleased with the high level of skills and quality of employees we
have managed to recruit, with the majority of workers being sourced from the
local town of Chapada dos Guimar�es and the nearby city of Cuiaba," Mr Best
said. "Recruitment of the project security workforce is also well advanced."

"Elkedra has integrated well with the local community and its administrators,
with the benefits generated for the community since our construction activities
commenced and the permanent employment opportunities created by our ongoing
operations generating strong support," Mr Best said.

Elkedra has an off-take agreement for all its production with the Leviev
Diamond Group, the world's largest diamond cutter, which reduces operating risk
and offers significant benefits in terms of a reduced working capital
requirement.

The Company's initial production project is based on a Probable Reserve of 5.4
million bcm of gravels contained within the `Quilombo' and the adjacent `Peba
Lagoinha' tenements. This initial mining reserve underpins a forecast 9-year
mine life at the initial 30,000 carats per annum production level.

These two tenements cover an area of 17 km2, representing a relatively small
proportion of Elkedra's total tenement area of 291 km2, which offer significant
exploration upside. Historical artisan mining activity within this expanded
area has demonstrated the existence of numerous diamondiferous gravel deposits.

Elkedra's growth strategy includes an ongoing exploration program to develop
additional satellite mining operations to feed the centrally located diamond
recovery processing facility at Chapada. The Company's medium-term objective is
to expand production to over 100,000 carats per annum.

                                   - ENDS -                                    

Released by:                                          On behalf of:
                                                                   
Jan Hope / Nicholas Read                                Mr Don Best
                                                                   
Jan Hope & Partners                              Executive Chairman
                                                                   
Telephone: (08) 9388-1474                       Elkedra Diamonds NL
                                                                   
                                    For further information contact
                                                                   
                                                       Sam Randazzo
                                                                   
                                                 Executive Director
                                                                   
                                          Telephone: (08) 6380-2855
                                                                   
                                            Web: www.elkedra.com.au

CHAPADA PROJECT - BACKGROUND

Located near the town of Chapada dos Guimar�es in Mato Grosso State, the
Chapada tenements cover a total of around 291 km2 adjacent to existing
watercourses in the Casca Basin and are prospective for diamondiferous alluvial
gravel terraces. Mining activities will initially focus on the Quilombo and
Peba Lagoinha reserve areas which represent about 10% of the Company's total
tenement holding in the region.

The region is an established tourism and agribusiness centre, with good
infrastructure and excellent access from the regional centre of Cuiaba.

Gem quality diamonds have been recovered in the area by local miners for over
50 years. In the early 1980's Rio Tinto plc (Rio) conducted substantial
exploration in the area including drilling and bulk sampling of the current
Chapada Project resource area. However, Rio was seeking to establish a larger
project including dredging of the lower portions of the Casca Basin which was
subsequently restricted by construction of a new dam.

The project contains probable reserves of 5.4 million bcm of drill delineated
gravels at a grade of 0.05 carats per bcm giving the project a 9-year life
based on processing 600,000 bcm per annum. Independent sales assessment
indicates an average diamond value of over US$400/carat.

The diamondiferous gravels, which average 1.3 metres in thickness, are located
beneath an average of 4.5 metres of sand overburden - with extraction using
conventional excavator and truck mining techniques. The gravel is clearly
visible, with no blasting required and minimal dilution expected.

The diamond recovery processing plant comprises screening, heavy media
separation, magnetic separation and X-ray sorting in a secure area. Magnetic
separation machines have been installed to remove the high limonite content of
the gravels, which impeded economic exploitation in the past using traditional
gravity techniques.

                                   - ENDS -                                    

The resource information on the Brazilian Chapada Alluvial Diamond Project has
been prepared in accordance with the 2004 edition of the Australasian Code for
Reporting Exploration Results, Mineral Resources and Ore Reserves (the "JORC
Code"). The term "Probable Reserve" is used as per its definition in the JORC
Code (available at www.jorc.org). The information is based on data compiled by
and reported upon by Mr Hugh Durey of Hugh Durey & Associates Pty Ltd. Mr Durey
is a member of the Australasian Institute of Mining & Metallurgy and qualifies
as a competent person as defined in the JORC Code. Mr. Durey holds no interest
in the share capital of either Elkedra Diamonds NL or Chapada Diamonds Ltd.


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