Vancouver, BC, October 17, 2007. Brazilian Diamonds Ltd (BDY: TSX & AIM) ("Brazilian Diamonds" or the "Company") is pleased to announce that drilling and pit testing has commenced on the Company's 100% owned Salvador 1 diamond bearing kimberlite in central Bahia State, Brazil. This bulk testing programme follows encouraging recovery of diamonds during small minibulk sampling earlier in the year.

The current activity focuses on a large mini-bulk sampling programme comprising six pits spaced across the Salvador 1 kimberlite which is approximately six hectares in surface area. Each pit is designed to recover approximately 1,300 tonnes of kimberlite. The pits will extend to depths of at least 11m below the kimberlite surface after overlying diamond-bearing sands and gravels have been removed to ensure that only kimberlite material is collected with each sample. Excavation of the first pit has commenced, with soft, clay-rich kimberlite now being delivered to the plant on site.

The plant was designed and built at the Company's facilities on the Santo Antonio do Bonito River in Minas Gerais State near the Company's field office in Patos de Minas. The plant has been designed specifically for the recovery of diamonds from the soft clay-rich kimberlite which comprises the upper 10 to 20m of the Salvador 1 body. After construction and testing of the plant, it was disassembled and transported to the Salvador 1 project site where it was reconstructed and is now undergoing final commissioning. It is expected to be ready to commence processing of kimberlite from the first test pit later this week. The Flowsort x-ray diamond recovery station has also been installed at the site and calibration tests will commence this week with the Company focusing on security issues as a priority throughout the entire treatment process.

While preparing for these pit tests, the Company has completed two diamond drill holes on the Salvador 1 body and is currently drilling a third. The two completed holes extended to their planned depths of 200m and terminated within kimberlite. The kimberlite is multi-phase including breccia rich in magma clasts, as well as intervals with textures suggestive of crystallization from an un-fragmented magma. Preliminary interpretations based on hand samples in the field suggest a uniform texture hypabyssal kimberlite. The third hole has intersected dark, blackish green kimberlitic rock and is currently at a depth of 40m. These drill holes have demonstrated that the Salvador 1 kimberlite continues to significant depths.

The Company has identified a number of additional drill targets in close proximity to the Salvador 1 kimberlite and these will be drill tested over the next few weeks.

Commenting on the work underway, Brazilian Diamonds Chairman, Kenneth Judge said "We are very encouraged by the progress made to date with our drill and pit testing programme. The plant mobilization and assembly, as well as the initial pit excavation have all been executed smoothly and efficiently following a straightforward and expedited permitting programme. The Company now has all permits in hand to complete the entire planned testing programme and we are expecting preliminary diamond results from the first test pits before the end of the year."

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. Dr. Cookenboo assisted in the design of the Salvador 1 testing programme and recently completed a site field visit which included inspection of the drill core referred to in this announcement.

Appointment of Investor Relations Manager

The Company is also pleased to announce that Mr. Jon Bey has been appointed to the position of Manager of Investor Relations and Corporate Communications. As Manager of Investor Relations and Corporate Communications, Mr. Bey will be developing and executing the Company's investor relations and communications strategy and assisting with future capital raising initiatives. Mr. Bey is a member of the Canadian Investor Relations Institute (CIRI) and most recently managed the investor relations functions for Vancouver's MetroBridge Networks.

In conjunction with this appointment and in accordance with the Company's Stock Option Plan, Mr. Bey will receive 100,000 incentive stock options exercisable on or before October 12, 2012 at a price of $0.25 per share.

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 that 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 six 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 Mineracao 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 including the full quarterly report, please refer to the Company's website www.braziliandiamonds.com or contact:

Brazilian Diamonds Limited
Brazilian Diamonds Limited + 44 7733 001 002

Stephen Fabian, CEO + 55 31 8814 5111

Investor Relations

Europe + 44 207 590 5503

North America 1-866-689-2599

Hanson Westhouse Limited (Nomad to the Company) + 44 113 246 2610
Tim Feather / Matthew Johnson

Landsbanki Securities (UK) Limited (Broker to the Company) + 44 207 426 9000
Tom Hulme