Kennady Diamonds Announces Kennady North Diamond Recovery Results

Grade Potential Over 2 Carats Per Tonne

Shares Issued and Outstanding: 16,143,112
TSX-V: KDI

TORONTO, Oct. 22, 2012 /CNW/ - Kennady Diamonds Inc. ("Kennady Diamonds", the "Company") (TSX-V: KDI) is pleased to announce the diamond recovery results from samples of drill core from the Kelvin - Faraday kimberlite cluster following a successful drill program undertaken last summer. Recovery of diamonds from the kimberlite intersects was undertaken by caustic fusion methods performed at the Geoanalystical Laboratories Diamond Services of the Saskatchewan Research Council ("SRC").

Patrick Evans, Kennady Diamonds CEO, commented: "We are very pleased with the diamond recovery results, which confirm that the Kelvin-Faraday kimberlite cluster has a coarse diamond size distribution as well as the potential to host a high grade diamond resource."

Mr. Evans added: "Besides the high diamond count, approximately 70 percent of the recovered diamonds are classified as white and transparent. Almost all the white diamonds had either no inclusions or only minor inclusions. In addition, approximately 5 percent of the diamonds are classified as yellow and transparent with either no or only minor inclusions. Together with grade, these characteristics are key value drivers."

The combined caustic fusion diamond results for samples taken from the Faraday, Faraday South and Kelvin kimberlites are summarized below in Table 1.

Table 1

Diamond recoveries broken down for each of the three kimberlites are provided in Table 2 below.

Table 2

*Excludes approx. 35.5 kg's of country rock xenoliths
**Total carat weight of the sample is 0.92

The above results compare very favorably with results from earlier drilling at Kennady North when 444 diamonds were recovered from a 184 kg sample taken from Kelvin and 74 diamonds were recovered from a 40 kg sample taken from Faraday. After correcting for country rock xenoliths removed for cost efficiency purposes, all the diamond results to date indicate that the Kennady North kimberlites could have a grade of over 2 carats per tonne, which compares to the Hearne kimberlite (2.10 carats per tonne) at the Gahcho Kué diamond project located approximately 10 kilometers to the south of Kennady North.

Based on these encouraging results, Kennady Diamonds intends proceeding with a significantly larger 5,000 meter winter drill program at Kennady North expected to commence in March 2013. The program will focus on infill drilling at the Kelvin - Faraday kimberlite cluster as well as testing of approximately 20 newly discovered kimberlite targets. A successful winter drill program is expected to provide sufficient data to enable Kennady Diamonds to declare an initial resource for the Kevin - Faraday cluster.

****

About Kennady Diamonds

Kennady Diamonds controls 100 percent of the Kennady North project which comprises thirteen leases and claims located to the west and north of the four leases controlled by the Gahcho Kué Joint Venture between De Beers Canada (51%) and Mountain Province (49%) located in Canada's Northwest Territories.

Exploration at Kennady North commenced in the late 1990's and resulted in the discovery of the diamond-bearing Kelvin, Faraday and Hobbes kimberlites. The number of diamonds recovered from these kimberlites and the size-frequency distribution indicate that they may be of comparable grade to the 5034 (1.77 carats per tonne) and Hearne (2.10 carats per tonne) kimberlites at the Gahcho Kué JV. Exploration samples from Kelvin and Faraday returned a relatively large number of macro diamonds with the two largest being a 0.4 carat diamond from Faraday and a 0.09 carat diamond from Kelvin.

The known kimberlites at Kennady North do not explain all the kimberlitic indicators previously recovered from glacial till sampling. Exploration at Kennady North recommenced during 2011 with a 50-meter line-spacing airborne gravity gradiometry (AGG) survey over the entire 123.6 square kilometer project area. The survey identified 106 geophysical targets of which 39 are high priority targets identified through the AGG and MAG surveys. All these kimberlite targets will be drill tested.

****

Qualified Person

This news release has been prepared under the supervision of Carl G. Verley, P.Geo., who serves as the qualified person under National Instrument 43-101.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) has reviewed or accepts responsibility for the adequacy or accuracy of this release.

FORWARD LOOKING INFORMATION

This news release includes certain information that may constitute "forward-looking information" under applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, the Company's strategic plans, future operations, future work programs and objectives. Forward-looking information is necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking information. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. All forward-looking information contained in this press release is given as of the date hereof and is based upon the opinions and estimates of management and information available to management as at the date hereof. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.

SOURCE Kennady Diamonds Inc.