Vancouver, B.C., August 14, 2007. Brazilian Diamonds Limited (BDY: TSX/AIM), ("Brazilian Diamonds" or the "Company") is pleased to announce that it has received mining and environmental licenses from the relevant State authorities to begin the planned bulk testing of the Company's 100% owned Salvador 1 kimberlite in central Bahia State, Brazil.

The Environmental License was issued by the Bahia State Environmental Agency (CRA) and published in the Bahia State Official Gazette on 7 August 2007. This was followed on 10 August 2007 by the issue by the Brazilian Mines Department (DNPM) of a "Guia de Utilização" license which permits the excavation of trenches and processing of excavated material and authorizes the issue of a Kimberley Process Certificate required in connection with the sale of any diamonds recovered.

The Company has also completed construction of a mobile treatment plant which is now being transported from Patos de Minas to the project site in Bahia State, a distance of approximately 1,300 km.

Brazilian Diamonds plans to collect six large samples of approximately 650 m3 each from different parts of the Salvador 1 kimberlite in order to assess further its Diamond potential. The excavation of trenches is expected to commence at the end of August.

Plant installation on site is expected to be completed in September and the first results from the testing of material extracted from these trenches are expected during the fourth quarter of 2007.

A total of 120 diamonds, weighing 0.84 carats, have so far been recovered from 6.58 tonnes of kimberlite from seven samples collected by the Company. Those samples were processed using typical methods for indicator mineral recovery at the Company's mineral processing laboratory in Patos de Minas, Brazil which is ISO 17025 rated for recovery of indicator minerals including diamonds. The samples were processed using a bottom screen size of 0.250 mm following disaggregation using the Company's primary processing plant.

Dr. Harrison Cookenboo (P.Geo) and Consulting Geologist is the Qualified Person as defined under National Instrument 43-101 responsible for the technical disclosure in this release, and has reviewed and approved the contents of this release.

Editors' Note:

Brazilian Diamonds is a leading Brazil-based exploration company focused on the discovery of kimberlites on its extensive portfolio of properties in the States of Minas Gerais and Bahia, with the goal of becoming a significant producer of diamonds.

The Company is awaiting final approval before commencing the environmental licensing process for development of the Canastra 1 kimberlite body for which mine feasibility work has already been completed and the required Mines Department approvals are already in place. It is intended to bring Canastra 1 into production once the environmental licensing process is completed.

The Company's Salvador Diamond project in Bahia includes the diamondiferous Salvador 1 kimberlite. This project was acquired from De Beers which retains a right to reacquire up to 40% of any kimberlite found on the Salvador properties which is confirmed to contain more than 200 carats of diamonds.

The Company has a fully operational Diamond separation/analysis laboratory at Patos de Minas, Minas Gerais which is strategically located near its properties in the Santo Antônio and Coromandel areas. The Company has a highly experienced team including four geologists located at the Company's facilities in Brazil.

The Company's strategy for non-core activities on its properties is to form joint ventures. A Cdn$1,000,000 feasibility study is underway for a joint venture for the mining of alluvial diamonds on its properties in the Santo Antônio river drainage. The joint venture involves two important Brazilian companies: CODEMIG, the state owned mining development organization and Mineração Rio Novo Ltda., a wholly owned subsidiary of Andrade Gutierrez SA, one of Brazil's largest civil engineering firms and an existing large-scale, dredge based producer of alluvial diamonds.

For further information refer to the Company's website www.braziliandiamonds.com or contact: