Kennady Diamonds Step-out Drilling Intersects over 70 meters of Kimberlite at Kelvin

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Step-out Drilling Continues to Intersect Kimberlite Approx. 300 meters from Main Kelvin

More than 3 tonnes of Kimberlite Recovered

TORONTO, Aug. 26, 2013 /CNW/ - Kennady Diamonds Inc. ("Kennady Diamonds", the "Company") (TSX-V: KDI) is pleased to announce that over 70 meters of kimberlite has been intersected in step-out drilling on strike to the north-west of the main Kelvin kimberlite. Delineation drilling, which is taking place approximately 100 meters from Kelvin Lake and more than 300 meters from the main Kelvin kimberlite, is increasing confidence in the tonnage potential of the Kelvin kimberlite.

Table 1 below details recent drill results.

Table 1

*Not true widths

Drill hole KDI-13-041, drilled from the same platform as KDI-13-042, but at an inclination of - 60 degrees (AZ 300 degrees) did not intersect kimberlite, thereby defining the north-easterly limit in this particular area of the Kelvin kimberlite. Drill hole KDI-13-042, drilled more steeply, intersected over 70 meters of kimberlite.

Patrick Evans, Kennady Diamonds CEO, commented: "We are particularly encouraged that the step-out drilling continues to intersect kimberlite more than 300 meter to the north-west of the main Kelvin kimberlite. This is the farthest to the north-west that kimberlite has been intersected and the kimberlite body continues to demonstrate substantial widths. Delineation drilling to determine the limits of the kimberlite emplacement is continuing."

Kennady Diamonds is also pleased to report that more than 3 tonnes of kimberlite has been recovered to date from approximately 3,000 meters of drilling, which is well in excess of the targets set for the program. This reflects the very high success rate of the current drill program. At the conclusion of the drill program within the next two weeks, the recovered kimberlite will be dispatched to the Geoanalytical Laboratories Diamond Services at the Saskatchewan Research Council for recovery of diamonds by caustic fusion.

Mr. Evans concluded: "We expect to release diamond recovery results early in the fourth quarter. The additional data will facilitate progress towards the first resource statement for the Kennady North project and also add significantly to our diamond data base".

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About Kennady Diamonds
Kennady Diamonds Inc. controls 100 percent of the Kennady North project which comprises thirteen leases and claims located immediately to the north and west 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.

A 5,000 meter drill program conducted during the winter of 2013 returned an exceptional sample grade of 8.44 carats per tonne. The largest three diamonds recovered were a 2.48 carat off-white transparent octahedral, a 0.90 carat off-white transparent irregular, and a 0.75 carat off-white transparent octahedral. The recovery of diamonds of this size and quality from a 1.1 tonne sample is very encouraging.

Kennady Diamonds aims to identify a resource along the Kelvin - Faraday kimberlite corridor of between 5 and 8 million tonnes, and also to identify new kimberlites outside of the corridor. This tonnage estimate is based on the drilling completed to date. The potential quantity is conceptual in nature as there has been insufficient drilling to define a mineral resource and it is uncertain if further exploration will result in the target being delineated as a mineral resource.

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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.

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.