Canabrava Diamond Corporation and Paramount Ventures and Finance; KAP Diamond Project, Ontario - Update

Business Wire, Dec 1, 1997

VANCOUVER--(BUSINESS WIRE)--Dec. 1, 1997--Canabrava Diamond Co(VSE:CNB) Paramount Ventures & Finance Inc. (PVF-V) and Canabrava Diamond Corporation (CNB-V) are pleased to announce that the two companies have completed their ground acquisition program on the Joint Venture KAP Diamond Project, Ontario. The KAP Diamond Project is comprised of four property blocks totalling approximately 120,000 hectares of staked claims located in the Wawa Sub-Province of the Eastern Shield in north central Ontario. The properties are well positioned within a 250 kilometre northeast trending structural corridor which is believed to control the distribution of kimberlite intrusive centres.

In October 1997, Canabrava confirmed the discovery of the first kimberlite pipe cluster within this belt on the Company's 100 percent owned Whitefish Lake Project. The Whitefish Lake Project is located near Wawa, Ontario and is immediately southwest of the southernmost KAP Project claim block. The kimberlite pipes discovered by Canabrava are located in an area where sub-calcic G-10 Garnets have been recovered in modern alluvium samples. G-10 garnets were also recovered from modern alluvium samples collected in the extreme northeastern area of the Whitefish Lake Property and the source for these garnets is believed to be within the southernmost KAP Project claim block.

The Joint Venture will initiate a high resolution airborne magnetic and electromagnetic-VLF survey over all four KAP Project claim blocks immediately and the survey is expected to be completed by year-end. Kimberlite targets developed from the above survey will be identified for ground follow-up in 1998. A full program of geochemical sampling for kimberlite indicator minerals is also planned by the joint venture.

Paramount is funding all acquisition costs and the cost of the airborne magnetic/electromagnetic survey to earn a 50 percent interest in the KAP Diamond Project. Once these obligations are completed, Paramount and Canabrava will participate on a 50/50 basis to further evaluate the KAP Diamond Project.

Canabrava Diamond Corporation is actively exploring for diamonds in Brazil and Canada. The Company is 52 percent owned by Southwestern Gold Corporation (SWG-T). Paramount Ventures & Finance Inc. is a well financed junior exploration company with copper and gold projects located in Argentina and in Indonesia, and diamond projects located in Brazil. -0- The Vancouver Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

CONTACT: Canabrava Diamond Corporation

George H. Plewes, 604/669-2525

604/688-5175 (FAX)

or

Canabrava Diamond Corporation

Rory O. Moore, 604/669-2525

604/688-5175 (FAX)

Website: http://www.swgold.com

or

Paramount Ventures & Finance Inc.

Paul Conroy, 604/687-1334

604/687-1338 (FAX)

Website: http://www.paramountvf.com