Woodbois Regulatory News (WBI)

4 May 2010

Obtala Resources plc

Update on Mining and Diamond Recovery, Sierra Leone

·; 1,000 carats recovered during start-up

·; 11.34 carat 'special' stone recovered

·; Community Mining Scheme now underway

·; Optimisation of DMS plant at Konoma continues

·; Diamonds recovered reported > 95% gem quality

Obtala Resources plc ("Obtala") (AIM:OBT), the UK resources investment and development company, is pleased to provide an update on its alluvial diamond mining operation at Konoma, Sierra Leone. The mining licences are held by the 100% owned Obtala subsidiary, Sierra Leone Hard Rock Limited ("SLHR").

Since acquiring SLHR in January 2010, Obtala has re-started the Dense Medium Separation ("DMS") plant, and is continuing with the optimisation process, while additional spares and components are on order. During this phase the DMS plant has recovered 1,000.54 carats from 1,540 stones contained in 19,800m3 of diamond bearing gravels and this includes an 11.34 carat stone. In addition to this special stone (defined as being greater than 10.8 carats) 5.04, 5.08, 5.57, 5.85, 5.92, 6.38, 7.20, 8.06 and 8.72 carat stones have been recovered. Diamonds recovered from the gravels treated during the optimisation process are reported at over 95% gem quality.

Obtala continues to increase its production capability and is awaiting delivery of spare parts for the mining fleets. The local Community Mining Scheme, which is fully endorsed by the Government of Sierra Leone (refer to press release dated 24th March, 2010) is now underway and should produce stones within the next two months.

Frank Scolaro, Chairman of Obtala, commented: "I am very pleased with the progress being made by our team on the mine site over the last month. We were fully aware when starting-up that it takes time to revive the operation, which had been sitting on care-and-maintenance since 2008. We have fully staffed the operation and intend to ensure that operating costs are kept to a minimum. We are currently operating at less than 40% capacity but will continue to ramp up production levels over the coming months. The volume of stones recovered against a low level of gravel feed is an achievement highlighting the strong upside growth potential of the project. In addition to our own operation we have worked at building relationships with the local community and I am delighted that the Community Mining Scheme has started."

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