News

September 18, 2007

Sanatana Undertakes $3 Million Common Share Unit and Flow-Through Unit Financing

Vancouver, British Columbia, Canada, September 18, 2007. Sanatana Diamonds Inc. ("Sanatana" or the "Company") (ticker symbol STA TSX-V or SAN London AIM) today announced that it intends to complete a brokered private placement of common share units and flow-through units to support the further exploration of its Mackenzie Diamond Project and for general working capital purposes.

Sanatana has entered into an engagement agreement with J.F. Mackie & Company Ltd. ("J.F. Mackie") pursuant to which J.F. Mackie will act as Sanatana's agent in connection with a private placement of common share units and flow-through units of Sanatana in the provinces of British Columbia, Alberta, Saskatchewan, Ontario and Nova Scotia and certain other jurisdictions outside Canada, other than the United States, as agreed by J.F. Mackie and the Company (the "Private Placement") to raise gross proceeds of up to $3 million with a broker's option to raise up to an additional $1 million. The Private Placement will consist of common share units issued at a price of $0.25 per unit and flow-through units issued a price of $0.30 per unit. Each common share unit shall be comprised of one common share of the Company (each, a "Common Share") and one-half of one 18-month warrant, each whole warrant entitling the holder thereof to purchase one Common Share at the price of $0.30 per share. Each flow-through unit shall be comprised of one Common Share issued as a "flow-through share" pursuant to the Income Tax Act (Canada) and one-half of one 18-month warrant, each whole warrant entitling the holder thereof to purchase one Common Share at the price of $0.35 per share. No more than $2 million of flow-through units may be issued. In addition, the Company has granted to J.F. Mackie an option to offer additional common share units for sale for gross proceeds of up to $1 million. The Private Placement is expected to close on or about September 28, 2007.

The proceeds of the sale of the flow-through units will be used for exploration expenditures, eligible for flow through share treatment under the Income Tax Act (Canada), on the Company's Mackenzie Diamond Project. The proceeds of the sale of the common share units will be used to fund further exploration on the Mackenzie Diamond Project and for general working capital purposes. It is anticipated that insiders of the Company may participate in the Private Placement.

All amounts referred to above are in Canadian dollars, unless otherwise stated.

For additional information on the company, please contact:

Sanatana:
Mr. Peter Miles, President and Chief Executive Officer, at 604-408-6680 or email investor@sanatanadiamonds.com.

Insinger de Beaufort (Nominated Adviser):
Nandita Sahgal, at tel: +44 207-190-7000

NEITHER THE AIM MARKET OF THE LONDON STOCK EXCHANGE PLC NOR THE TSX VENTURE EXCHANGE HAS REVIEWED, NOR ACCEPTS RESPONSIBILITY FOR, THE ADEQUACY OR ACCURACY OF THIS RELEASE.

Qualified Person

The Sanatana exploration programs are carried out under the supervision of Sanatana's Director and VP of Exploration, Mr. Buddy Doyle. Mr. Doyle meets the qualified person requirements (as defined by National Instrument 43-101) with 26 years of exploration experience, 16 years of which are in diamond exploration.

About the Company

Sanatana Diamonds Inc. is focused on the exploration of its Mackenzie Diamond Project, comprised of approximately 5.9 million acres of ground under claims and permits, located north of Great Bear Lake and approximately 700 kilometres northwest of Yellowknife in the Northwest Territories of Canada. The Sanatana Mackenzie project is a joint venture between Kennecott Canada Exploration Inc. and Sanatana Diamonds Inc., where Sanatana operates and Kennecott has a contributing 15% interest. As part of the joint venture arrangement Kennecott has made available one of their project geologists and a geophysicist from their pool of experienced staff. Sanatana, headquartered in Vancouver, is dual listed on the AIM Market of the London Stock Exchange plc and the TSX Venture Exchange (AIM: SAN, TSX.V: STA).