Searchgold Resources Inc Diamond Production and Sales by 24hgold


SearchGold Resources Inc.
TSX VENTURE:	RSG
FRANKFURT:	S10

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May 28, 2009
SearchGold Resources Inc./Stellar Diamonds Operational Update : Diamond Production and Sales, 30 Carat Diamond Recovered on Mandala, Guinea
MONTREAL, QUEBEC--(Marketwire - May 28, 2009) - SearchGold Resources Inc. ("SearchGold") (TSX VENTURE:RSG) (FRANKFURT:S10) is pleased to announce an operational update for Stellar Diamonds Limited ("Stellar" or "the Company") in which it holds 2.7 million shares or an interest of 5.5%. HIGHLIGHTS - Mandala project entered commercial production in April 2009. Over 7,600 carats produced to date at an average grade of 44 carats per hundred tons, including gem and non-gem diamonds of: 31.33, 12.94, 10.93, 5.79, 4.92, 4.66, 4.22, 3.98 and 3.7 carats in size. - Kono underground trial mining produces 4,400 carats to date, the three largest diamonds being: 11.95, 11.40 and 10.55 carats in size. - Kono Diamond sales realise $125,000 at an average $46 per carat. - Temporary care and maintenance of the Kono project implemented due to weak Diamond market. OPERATIONAL UPDATE Mandala Mine (85% ownership), Guinea The Mandala alluvial Diamond mine, 85% owned by Stellar with 15% Net Profit Interest payable to local partners once past capital and operating costs have been recouped, is now in production following the successful commissioning of the plant on 20 April 2009. The project comprises an independently verified Diamond resource of 535,000 carats (NI 43-101 compliant). Since January, the 55km access road from Macenta to Mandala was rehabilitated and upgraded and the plant transported to site, where it was erected and commissioned within 8 weeks. The plant has a name plate head feed of 100 tons per hour and a DMS capacity of 30 tons per hour. Diamond recovery is by Flowsort X-Ray with a grease table back-up, all performed under strict security conditions. Commissioning and initial production material has come from numerous areas within the mining concession as the Company effectively embarked on a large-scale bulk sampling in order to test the resource and the plant's capability to handle the material. This has led to the recovery of some 7,670 carats at an average grade of 0.88 carats per cubic metre (approximately 44 carats per hundred tons). The largest diamonds produced to date weigh 31.33ct, 12.94ct, 10.93ct, though not believed to be of gem quality. However, some excellent quality gemstones of 4.66ct, 3.98ct, 3.73ct and 3.33ct have been recovered. These first diamonds have recently been exported to Antwerp for valuation and sale, to test market conditions. Modifications to the plant will see the daily production increase from the current average of 300 cubic meters per day to around 500 cubic meters per day (approximately 1,000 tons per day) in the near future. Kono Project (49% ownership), Sierra Leone Underground trial mining has continued at the Pol-K and Bardu kimberlites. Total diamonds produced to date is over 4,400 carats. The in-situ grade of the Pol-K kimberlite consistently averages 65 carats per hundred tons. However at Bardu, a new kimberlite intrusion has recently been intersected and sampled and has returned an average grade of 140 carats per hundred tons, with a large frequency of +1 carat stones. A parcel of 2,697 carats of diamonds was recently exported to Antwerp for sale. The parcel comprised mainly of Pol-K goods (80%) with Bardu goods (20%). The sale realised $125,000 at an average of $46.34 per carat. By means of comparison, in September 2008 a sale of 811 carats from Pol-K and 252 carats of Bardu realised average prices of $152 and $52 per carat respectively ($128/ct average). The difference between the two sales values clearly demonstrates the present adverse conditions in the Diamond market. On this basis the Company and its 51% joint venture partner, Petra Diamonds Limited, have agreed to place the Kono project onto temporary care and maintenance until the rough Diamond market improves sufficiently to achieve more reasonable sales values for what the partners consider to be good quality run of mine Diamond product. Karl Smithson, CEO of Stellar commented: "We are very pleased at the progress made in bringing the Mandala project into production and the team on the ground needs to be commended for their efforts. The initial grades at Mandala are high for an alluvial Diamond project and with the confirmed presence of some larger diamonds, including a single stone of 31 carats, this bodes well for the future economics of the project." "However, the Diamond market continues to be challenging as exhibited by the low average price realised for the Kono Diamond sales. The most recent sale in April was over 60% lower than the sale performed in September 2008, demonstrating the Diamond market still has a long way to go in terms of its recovery. Although the Diamond grades from Kono remain encouraging we realise that it is not sustainable to continue to trial mine at such prices. Therefore, with our partners Petra Diamonds, we have reluctantly decided to enter a temporary care and maintenance of the Kono project. This situation will be continually monitored as the Diamond market changes. We take a long term view on the Kono project and in an improved Diamond market the trial mining will be resumed with the objective of determining the economics of the project." Philippe Giaro, P. Geol., President and CEO of SearchGold Resources Inc. and Qualified Person for SearchGold, has reviewed and approved the content of this release. About SearchGold Resources Inc. SearchGold Resources is a Canadian-based mining company primarily focussed on gold deposits in Africa. Shares of SearchGold Resources Inc. are listed for trading on the TSX Venture Exchange as "RSG"; and the Frankfurt Stock Exchange as "S1O". Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

CONTACT INFORMATION:

SearchGold Resources Inc.
Philippe Giaro
President & CEO
32-473-52-30-29
phgiaro@skynet.be

or

SearchGold Resources Inc.
Denis Tremblay
Vice-President
1-514-866-4224
info@searchgold.ca
http://www.searchgold.ca

or

CHF Investor Relations
Alison Tullis
Senior Account Manager
1-416-868-1079 x233
alison@chfir.com

INDUSTRY: Manufacturing and Production - Mining and Metals

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