Diamond producer and exploration company Pangea DiamondFields plc which is listed on the London Stock Exchange's Alternative Investment Market, has entered into a US$2 million short term loan facility, to be provided by Pangea Exploration (Proprietary) Limited.

Pangea has a stated target of developing three of its projects to commercial status by the end of 2009, including the Cassanguidi project where expansion to commercial status is ongoing at present. Achieving this objective whilst maintaining Pangea's existing portfolio of less developed projects, would require significant additional funding. Pangea continues to explore various opportunities to raise the funds required for the company to develop its assets to the stage where it is cash generative.

Upon the publication of its interim results, Pangea had cash resources of approximately $1.82 million, with unsold stock of diamonds in hand valued at approximately US$0.75 million. As a consequence of the limited cash reserves available to the company, a number of actions designed to conserve cash and reduce costs have been taken in all areas of the company's operations. These actions are focused on ‘fast-tracking' projects which are near to being cash generative (Cassanguidi and Bakerville) and slowing activities on projects that are likely to be consuming cash in the short term. Most significantly, as conversion of the current Exploration permit to a Mining licence at Dimbi may delay the expansion of operations to a scale which could be cash generative, a decision has been made to reduce materially operational activities at the Dimbi project in the Central African Republic.  Exploration activities on a significantly reduced budget will continue on site assuming that the funding situation improves and further progress is made with resource delineation.

The directors anticipate that the loan will provide the company with sufficient working capital to maintain its current activities for a period of two to three months with careful cash and operational management. During this time the directors will work towards finalising current ongoing discussions with regards to raising new equity finance. Any such equity fundraising is likely to target up to US$15 million of new funds and it is the director's current intention that all existing shareholders would be given an opportunity to participate. Such a fundraising would likely be priced to reflect the company's current financial circumstances and to attract the very limited funds available to small cap pre-production mining companies in existing capital market conditions. The company is also exploring various alternative strategies to maximize the value of its portfolio depending on the availability of funds.

The loan is to be provided to Pangea Diamonds (Pty) Ltd (PDL), the holding company for Pangea's interests in its South African projects including Bakerville and Harts River. Pangea has a 74 percent interest in PDL through is wholly owned subsidiary, Efidium Ltd. The remaining 26 percent interest is held by Panex.