TORONTO, ONTARIO--(Marketwire - March 4, 2011) - Vaaldiam Mining Inc. ('Vaaldiam' or 'the Company') (News - Market indicators) is pleased to report that it has entered into an agreement to increase its interest in the joint venture company which holds the Braúna kimberlite diamond property ('the property'), in Bahia State, Brazil, from 20% to 51%. The property area is 5,000 hectares (12,700 acres) and it contains 22 known kimberlite occurrences, including the Braúna 3 ('B3') kimberlite pipe. Vaaldiam has tested nine of the 22 kimberlites and all contained diamonds. The property has excellent infrastructure and exploration potential for additional kimberlite diamond resources. The State of Bahia is an economically under-developed region with government incentives for investors.

The B3 pipe contains a National Instrument 43-101 ('NI 43-101') Indicated Resource of 0.63 million tonnes at a grade of 24.58 carats per hundred tonnes ('cpht') to a depth of approximately 40 metres in the south lobe, and 0.67 million tonnes at a grade of 4.72 cpht to a similar depth in the north lobe of the kimberlite. Inferred Resources to a depth of approximately 200 metres are estimated to contain 3.75 million tonnes at a grade of 24.58 cpht in the south lobe and 1.04 million tonnes at a grade of 4.72 cpht in the north lobe (as reported on January 20, 2011). Independent valuations of 1,013.75 carats of rough diamonds recovered from the south lobe returned an average value of US$339 per carat while the valuation of a small parcel of 34.74 carats from the north lobe returned an average value of US$98 per carat (as reported on December 2, 2010).

Vaaldiam plans to bring the B3 pipe to production as quickly as possible. Vaaldiam will be the operator and will develop the B3 project via a joint venture committee comprised of three Vaaldiam representatives and two representatives of the existing joint venture partners. The joint venture committee's objective will be to maximize shareholder value by rapidly developing the project to its full potential. The Company has commissioned Coffey Mining to prepare a Preliminary Economic Assessment ('PEA') that is anticipated to be completed during March 2011.

In 2011, the Company plans additional exploration work at B3 and a full feasibility study that is expected to be finished in 2012. Subject to a positive feasibility study, Vaaldiam plans to finance, build and operate the B3 mine.

The key terms of the acquisition of the additional 31% interest are:

1. Vaaldiam must make three payments totalling approximately US$6.5 million ('the Transaction Consideration') to the existing joint venture partners: approximately US$0.9 million paid upon execution of this acquisition agreement; US$1.5 million on August 4, 2011 and US$4.1 million on June 4, 2012;

2. Vaaldiam must finance the B3 project to production and will receive all profits until full recovery of the project development cost. Thereafter Vaaldiam will receive 51% of the profits. The cost of future production expansions at B3 and the development of mines at other kimberlite occurrences on the property will be paid pro-rata by all shareholders and not solely by Vaaldiam;

3. In the event that Vaaldiam fails to satisfy the terms of the agreement, including failing to complete certain milestones by pre-determined deadlines (where the reason for such failure was within the reasonable control of the Company) the remaining shareholders have the right to:

   1. terminate Vaaldiam's role as operator;

   2. repurchase the 31% interest by repaying Vaaldiam the full US$6.5 million transaction consideration within 60 days, thereby reducing Vaaldiam's interest to 20%; and

   3. in certain circumstances, compel Vaaldiam to sell its remaining 20% interest at fair market value as determined by a qualified and independent third party.

4. In the event that Vaaldiam is no longer operator and a third-party subsequently invests additional capital to bring the B3 pipe to production, Vaaldiam will still receive its pro-rata share of the capital repayments as originally contemplated until it has recovered all of its invested capital and will thereafter also receive its pro rata share of the profits from ongoing operations.

Robert Jackson, President and CEO, said "This is a game-changing deal for Vaaldiam. We plan to develop B3 as quickly as possible and expand the resource there and elsewhere on the property, where we know diamonds occur. We have more than one million carats of resources with high value stones and good exploration potential. Our partners are well-respected, long-term players in the diamond industry who have crafted an agreement designed to help us succeed, while limiting our downside risk".

Project Overview

The two-hectare B3 pipe is open vertically and laterally and is located in easily accessible terrain just 7 km south of the town of Nordestina. Nordestina has excellent infrastructure, grid power, services and a pool of skilled labour.

Vaaldiam has performed exploration work elsewhere on the property, including the Braúna 8 ('B8') kimberlite dike situated 5 km north of the B3 pipe. Mini-bulk samples from this 4.5 metre-wide dike produced 170 diamonds weighing 19.37 carats, including a 7.97 carat white octahedron stone, from approximately 46 dry tonnes, inferring a recovered grade of 42 cpht. The B8 occurrence is a vertically oriented kimberlite dike forming a 1,000 metre-long section of the northwest trending dike system. Recent exploration conducted in the vicinity of the B8 dike has confirmed that this dike is linked to the Braúna 21 occurrence. Mini-bulk sampling of the one hectare Braúna 7 pipe, situated 1 km to the east of the B3 pipe, resulted in the recovery of 30 diamonds with a total weight of 3.87 carats from approximately 87 tonnes of kimberlite with an estimated recovered diamond grade of 4.5 cpht.

Vaaldiam commissioned the NI 43-101 mineral resource estimate for the B3 kimberlite pursuant to its obligation under NI 43-101 to prepare and file technical reports and as such, the technical report is the sole responsibility of Vaaldiam.

This release has been reviewed by Katharine Masun P.Geo., who is a qualified person under NI 43- 101. For additional information regarding Vaaldiam please visit www.vaaldiam.com.

Certain of the information contained in this news release constitutes 'forward-looking statements' within the meaning of securities laws. Such forward-looking statements, including but not limited to those with respect to the prices of metals and minerals, purchase payments, royalty payments, estimated future production and estimated costs of future production involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any forecast results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the actual prices of metals and minerals, the actual results of current exploration, development and mining activities, changes in project parameters as plans continue to be evaluated, as well as those factors disclosed in the documents of the Company filed from time to time with the Ontario Securities Commission.