AAD Added Capital

Archangel Diamond Corporation ("Archangel" or the "Corporation") (TSX VENTURE: AAD) announces that, in connection with its proposed acquisition of a 49.99% equity interest in OAO Arkhangelskoe Geologodobychnoe Predpriyatie ("AGD") from OAO LUKOIL ("LUKOIL") (the "Transaction") described in the Corporation's news release dated April 16, 2008, Archangel has exercised its rights to terminate and has terminated the Share Purchase Agreement ("SPA") between LUKOIL, the Corporation and De Beers Societe Anonyme dated April 15 2008. As a result of such termination, the other agreements related to the Transaction described in the Corporation's news release dated April 16, 2008 will also be terminated.

The SPA is being terminated because two conditions precedent to the SPA have not been fulfilled by the long stop date of December 31 2008 and because of the material adverse change referred to in the Corporation's press release of December 8 2008.

The Board of Archangel is now considering future options for the Corporation including financing options and a potential resumption of the litigation currently suspended.

CAUTIONARY NOTE TO SHAREHOLDERS CONCERNING FORWARD LOOKING STATEMENTS AND FINANCIAL PROJECTIONS - This news release contains "forward-looking statements", within the meaning of applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to the outcome of future negotiations, completion of the Transaction, execution of definitive agreements, exercise of future call rights, success of financing activities, identification or upgrade of mineral resources, requirements for additional capital, government regulation, results of future diamond exploration, results of diamond marketing, changes in legal requirements, changes in the political environment, environmental liabilities and title disputes. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual outcomes, results, level of activity, performance or achievements of Archangel Diamond Corporation to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: risks described in the above news release; those risks set out in Archangel's disclosure documents and its annual, interim management discussion and analysis and annual reports. Although Archangel has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Archangel does not undertake to update any forward-looking statements or financial projections, except in accordance with applicable securities laws.

THE TSX VENTURE EXCHANGE DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

Contacts: Archangel Diamond Corporation - Media Enquiries Ms. Jocelyn Fraser (604) 731-6164 Email: jocelyn.fraser@archangeldiamond.com Archangel Diamond Corporation Mr. Steven Thomas Chief Financial Officer (416) 423-1600 Email: steve.thomas@ca.debeersgroup.com