Closes the Sale of the Canastra Project

#910-475 Howe Street Vancouver, British Columbia Canada V6C 2B3

Tel: (604) 689-2599 Fax: (604) 689-3609

[email protected] www.braziliandiamonds.com

BZD: TSX.V

BRAZILIAN DIAMONDS LIMITED

CLOSES THE SALE OF THE CANASTRA PROJECT

Vancouver, Canada – September 3, 2010 - (TSX.V: BZD) ("Brazilian Diamonds" or "the Company"). Further to its news release of August 10, 2010, the Company is pleased to announce that it has now closed the sale of the shares of Mineracao do Sul Ltda. (“MdS”), the Company’s wholly-owned subsidiary (which includes the assets of the Canastra Project). At closing the company received the sum of R$808.700 (US$466,700) being the previously announced consideration of R$1.100.000 less the previously received deposit of R$100.000 and agreed upon liabilities of the Company of R$191.300 (US$110,400).

With the completion of this transaction the Company is now focusing its efforts on identifying new opportunities.

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

For further information contact:

Stephen Fabian, President & CEO

Tel: + 33 6439 10649

Francis Johnstone, Chairman

Te: +44 7970 415 070

Jon Bey, Investor Relations

Tel: 1-866-689-2599 Email: [email protected]