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South America’s Largest Diamond Producer

South America’s Largest Diamond Producer. May 2008. Cautionary Statement. All monetary amounts in U.S. dollars unless otherwise stated.

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South America’s Largest Diamond Producer

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  1. South America’sLargest Diamond Producer May 2008

  2. Cautionary Statement All monetary amounts in U.S. dollars unless otherwise stated. This presentation contains “forward-looking statements”, within the meaning of the United States Private Securities Litigation Reform Act of 1995 and similar Canadian legislation, concerning the business, operations and financial performance and condition of Vaaldiam. Forward-looking statements include, but are not limited to, statements with respect to estimated production, synergies and financial impact of completed proposed acquisitions; benefits of the acquisitions and the development potential of Vaaldiam’s properties; the future price of diamonds; the estimation of mineral reserves and resources; the realization of mineral reserve estimates; the timing and amount of estimated future production; costs of production; capital expenditures, success of exploration activities; permitting time lines and permitting, mining or processing issues; currency exchange rate fluctuations; government regulation of mining operations; environmental risks; unanticipated reclamation expenses; title disputes or claims; and limitations on insurance coverage. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made, and they are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Vaaldiam to be materially different from those expressed or implied by such forward-looking statements, including but not limited to risks related to: unexpected events during construction, expansion and start-up; variations in ore grade, tones mined, crushed or milled; variations in relative amounts of refractory, non-refractory, non-refractory and transition ores; delay or failure to receive board or government approvals; timing and availability of external financing on acceptable terms; the businesses of acquisitions not being integrated successfully or such integration proving more difficult, time consuming or costly than expected; not realizing on the anticipated benefits from the acquisitions or not realizing on such anticipated benefits within the expected time frame; risks related to international operations; actual results of current exploration activities; actual results of current reclamation activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of diamonds and gold; possible variations in ore reserves, grade or recovery rates; failure of plant, equipment or processes to operate an anticipated; accidents, labour disputes and other risks of the mining industry; delays in the completion of development or construction activities, as well as those factors discussed in or referred to in the current annual Management’s Discussion and Analysis and current Annual Information Form of Vaaldiam filed with the securities regulatory authorities in Canada and available at www.sedar.com. Although management of Vaaldiam has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Vaaldiam does not undertake to update any forward-looking statements that are incorporated by reference herein, except in accordance with applicable securities laws.

  3. Vaaldiam Resources – Strategic Plan • South America’s largest diamond producer • Producer of high value diamonds - average value $280 per carat • Two debt free mines in production • Focused on low cost, low risk diamond production in Brazil • Investing cash flow in kimberlite development & exploration • Targeting 500,000 carats annual production by 2011 • Consolidator of the emerging diamond sector in Brazil • Increasing demand & prices for diamonds Vaaldiam’s Duas Barras Mine under the lights All Currency Figures US$ Unless Otherwise Noted

  4. Why Brazil? • Long history of high quality diamond production • Similar diamond geology to southern Africa and Canada • Under-explored for diamonds • Low mineral exploration and mine development costs • Excellent infrastructure • S&P Investment-grade credit rating • Low political risk • Stable mining and environmental legislation

  5. Exploration Expenditure ComparisonBrazil vs Canada Diamond Exploration Expenditures ($US Millions) Source: Trends in Cdn Mineral Exploration & Pers. Communication with Operating Companies in Brazil; Ontario Ministry of Northern Development and Mines

  6. Production & Advanced Exploration

  7. Producing Mines Chapada Duas Barras

  8. Producing Mines (cont’d) Chapada Duas Barras

  9. Chapada’s Productionis “Special” 30.95 Carat Diamond

  10. Key Partners in the Diamond Market Chapada Diamonds LEVIEV RETAIL STORES London New York Dubai Moscow & Other Clients Polished Diamonds Run of Mine Production Duas Barras Diamonds MANUFACTURERS Antwerp Israel India China Sorted Rough Diamonds Run of Mine Production

  11. Mine Capex & Resource Expansion Overhead & Other Braúna Feasibility Study Pimenta Bueno/Ariquemes Bulk Sampling Catalão Resource Definition Investing in Organic Growth $1.7 M $3.3 M $0.8 M $0.7 M $1.0 M C$7.5 M Invested In $ 10 Million Operating Cash Flow Projected for 2008 2008 Exploration & Development

  12. 2008 Exploration Targets Four-fold Increase of Diamond Resource To increase our resource base C$ 7.5 Million in 2008

  13. On-track to be South America’s first kimberlite diamond mine after +250 years of alluvial diamond production Feasibility study underway Production targeted for mid-2009 Targeting annual production of 300,000 carats per year High quality diamonds recovered from bulk samples including pink diamonds Diamond value estimated at US$125 to $165 per carat 1 Excellent potential for +20 million tonne resource and long-life U/G operation Excellent infrastructure = low capital & operating costs New Production Expected in 2009 Braúna Kimberlite Project N.B. Resource estimate is not yet 43-101 compliant Cpht = carats per 100 tonnes 1. Preliminary company estimate based on diamonds recovered from bulk samples

  14. Brauna Kimberlite System

  15. Braúna 3 Kimberlite Pipe View Facing Northeast

  16. Braúna Resource Potential 1 Note 1: Resources are not yet 43-101 compliant. Brauna 3 & Brauna 7 estimates were calculated from solid modelling by Wardrop Engineering Inc. of the detailed drilling completed by Vaaldiam in 2007. Volume estimates for Brauna 8, 11 and 21 are based on surface trenching, mini-bulk sampling and limited drilling. Density conversion factors ranging from 2.75 to 2.76 are based on actual rock density measurements.

  17. Braúna Chapada Duas Barras Diamond Production Profile 425 425 244 Total Carats Produced (000’s) 95 42 Source: Vaaldiam management estimates

  18. Braúna Chapada Duas Barras Operating Cash Flow Projection 45.7 44.9 26.6 Operating Cash Flow ($Millions) 10.8 2.5 Source: Vaaldiam management estimates

  19. 46 kimberlite pipes 24 pipes sampled & diamond bearing with grades up to 18 cpht Large tonnage potential : drilling outlined +200 Mt in 5 pipes Bulk sampling underway to define diamond grade in priority pipes Rio Tinto has back-in rights on Pimenta Bueno licences for 60% and VAA carried at 40% Excellent tin and base metal potential on Ariquemes 9 kimberlite pipes discovered to date High value alluvial production from district 23.6 cpht grade from Rio Tinto mini-bulk sample from 1 ha Catalão pipe Bulk sampling & resource definition drilling planned for 2008 Advanced stage development; approximately 1 year behind Braúna time-line Rio Tinto has back-in rights on Catalão licences for 60% and VAA carried at 40% Advanced Stage Exploration Catalão Kimberlite Project Pimenta Bueno/Ariquemes

  20. Candle Lake Kimberlite ProjectFort a la Corne, Saskatchewan • Two large diamond-bearing kimberlites - Fort a la Corne kimberlite trend • Macro-diamond grades up to 24 cpht • Large tonnage potential : > 100 Mt in C29/30 pipe alone • 503 tonne sample – results due in Q2 2008 • Conceptual Mine Study underway ahead of development of a 43-101 compliant resource • Excellent possibility for Joint Venture development or outright sale for value

  21. Our Goal :500,000 Carats Annual Production By 2011 500,000 carats / year in sight! • Projected Production by 2010: • Duas Barras 83,000 carats • Chapada 37,000 carats • Brauna 300,000 carats • Total 420,000 carats • 500,000 carats / annum in 2011 is a realistic target – achieved through organic growth from: • Chapada Mine expansion – short term, 90% of property holdings unexplored • Braúna Mine development – short term, feasibility underway • Catalão kimberlites – medium term • Duas Barras Mine – medium term, expansion through acquisitions in district • Pimenta Bueno/Ariquemes kimberlites – medium to long term

  22. Upcoming News • Q-2 2008: • Production results & Operational Update from Duas Barras and Chapada mines • Macro diamond results from Candle Lake mini-bulk sampling program • Update on Bulk Sampling program & Feasibility at Braúna • Bulk sampling results from Pimenta Bueno • Exploration update on Catalão kimberlite program

  23. Vaaldiam – Investment Highlights • South America’s largest diamond producer from two mines • Producer of high value diamonds - average value $280 per carat • Re-investing positive operating cash flow in low cost, low risk kimberlite development & exploration in Brazil • Strong treasury to support organic growth • Targeting 500,000 carats of annual production by 2011 • Undervalued - Trading at just two times 2010 operating cash flow • Consolidator of the emerging diamond sector in Brazil Vaaldiam’s Duas Barras Mine under the lights

  24. Corporate Information VAALDIAM 213.8 Million Shares Outstanding $6.3 Million Cash (C$M) $ 64.0 Million Fully Diluted Cash (C$M) 42.9 Million (20%) Largest Shareholder $96 M Market Capitalization (C$M) Debt (C$M) None 52 Week High/Low $1.10/$0.40 VAA - TSX Trading Symbol 27 carat diamond from the Chapada Mine

  25. South America’sLargest Diamond Producer

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