Mr. Patrick Evans reports

KENNADY DIAMONDS ANNOUNCES KELVIN DIAMONDS RECOVERY RESULTS; KELVIN SOUTH LOBE "COMMERCIAL" SAMPLE GRADE 3.64 CARATS PER TONNE; KELVIN SHEET "COMMERCIAL" SAMPLE GRADE 5.95 CARATS PER TONNE

Kennady Diamonds Inc. has released further diamond recovery results from the Kelvin 2014 summer/fall core drilling program. Approximately 1.83 tonnes of kimberlite from the Kelvin South lobe and 47.62 kilograms from the Kelvin sheet were processed by caustic fusion at the geoanalytical laboratories diamond services of the Saskatchewan Research Council. The 1.83-tonne Kelvin South lobe sample was recovered by HQ diamond drilling and these core holes also served as pilot holes for the 2015 Kelvin bulk sample that was recovered using large-diameter reverse-circulation drill rigs.

Kennady Diamonds chief executive officer Patrick Evans commented: "We are very pleased with these excellent diamond recovery results, which returned a sample grade of 3.64 carats per tonne from the Kelvin South lobe and 5.95 carats per tonne from the Kelvin sheet for diamonds having commercial characteristics. These results support the potential for the Kelvin kimberlite to host a high-grade diamond resource. Based on drilling and sampling completed to date, we estimate that the Kelvin-Faraday kimberlite cluster has the potential to host between 10 and 13 million tonnes at a grade of between two and 2.5 carats per tonne."

                   KELVIN SOUTH LOBE 2014 CAUSTIC FUSION DIAMOND RECOVERY RESULTS
 
                             Number and weight of diamonds according to sieve size fraction (mm)                       
Sample weight +0.106  +0.150  +0.212  +0.300  +0.425  +0.600  +0.850  +1.180  +1.700  +2.360  +3.350  +4.750
(dry tonnes)  -0.150  -0.212  -0.300  -0.425  -0.600  -0.850  -1.180  -1.700  -2.360  -3.350  -4.750


1.8376         1,679   1,150     693     425     235     121      72      35      15       3       2       1     

Total     Carats (+0.85 mm 
diamonds        sieve size)

4,431                 6.68                       

* Sample grade of diamonds greater than 0.85 millimetre: 3.64 carats per tonne.

The four largest diamonds recovered from the Kelvin South Lobe sample are described as:

• 1.36 carats, off-white, transparent, macle with inclusions;
• 0.68 carat, off-white, transparent, broken tetra-hexahedron with inclusions;
• 0.44 carat, off-white, transparent, fragment with minor inclusions;
• 0.44 carat, off-white, transparent, octahedral with inclusions.

                        KELVIN SHEET 2014 CAUSTIC FUSION DIAMOND RECOVERY RESULTS

                             Number and weight of diamonds according to sieve size fraction (mm)                       
Sample weight   +0.106  +0.150  +0.212  +0.300  +0.425  +0.600  +0.850  +1.180  +1.700  +2.360  +3.350  +4.750
(dry kilograms) -0.150  -0.212  -0.300  -0.425  -0.600  -0.850  -1.180  -1.700  -2.360  -3.350  -4.750

47.62               53      46      25      15       5       2       3       1       2       0       0       0     

Total     Carats (+0.85 mm 
diamonds        sieve size)

152                 0.2835                     

* Sample grade of diamonds greater than 0.85 millimetre: 5.95 carats per tonne.

The largest diamond recovered from the Kelvin sheet sample is described as a 0.12-carat white/colourless, transparent octahedral with minor inclusions.

As with previous Kelvin samples the number of transparent white/colourless and off-white diamonds is very high. Of the 366 individual diamonds from the samples described by the SRC, 46 per cent are described as white/colourless and 51 per cent as off-white. Six are described as yellow and only five as brown. There are no grey diamonds in the sample. Mr. Evans noted, "Together with grade, diamond quality is a key indicator of value."

In addition to the above, Kennady Diamonds also has 2.73 tonnes of kimberlite from the Kelvin North Lobe that is now being processed by caustic fusion at the SRC. The diamond recovery results from this sample are expected by the end of the second quarter. Also, processing of the 436-tonne Kelvin bulk sample through the SRC dense-media separation plant will commence before the end of May and the diamond recovery results are expected before the end of the third quarter.

Qualified persons

This news release has been prepared under the supervision of Carl G. Verley, PGeo, who serves as the qualified person under National Instrument 43-101.

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