Lydia Diamond Announces Results of Dissent Hearing and Satisfaction of Dissent Award

TORONTO, ONTARIO--(Marketwire - Oct. 17, 2011) - Further to its press release dated December 23, 2009, Lydia Diamond Exploration of Canada Ltd. ("Lydia Diamond") announces that a decision has been rendered in the previously announced dissent proceedings, and that a settlement has been approved by the Ontario Superior Court of Justice (the "Court") for the satisfaction of the dissent award.

On December 21, 2009, the Court denied a request by Emilia von Anhalt to permit her to vote the 22,315,875 shares of Lydia Diamond held by her at the December 23, 2009 shareholder meeting at which the shareholders approved a restructuring transaction whereby the 24,000 hectare exploration property located in Cashel, Effingham, Grimsthorpe and Tudor townships in southeastern Ontario near Madoc (the "Madoc Project") would be sold to Crown William Mining Corporation ("Crown William"). The Court did however permit Ms. von Anhalt to exercise rights of dissent whereby she would be paid fair value for her shares of Lydia Diamond. Lydia Diamond was ordered to pay $400,000 into court as security for any fair value award. For this purpose, Crown William and Lydia Diamond entered into a Dissent Rights Support Agreement, the terms of which required Crown William to lend $400,000 to Lydia Diamond to make such payment. If additional funds were required to pay a dissent award, Crown William agreed to repurchase shares issued to Lydia Diamond on the restructuring transaction at the court determined fair value to provide Lydia Diamond funds to meet its dissent obligations.

Unable to reach agreement on the fair value of the Lydia Diamond shares held by Ms. von Anhalt, Lydia Diamond commenced an application to the Court seeking an order fixing the value of her Lydia Diamond shares. On January 5, 2011 the Court determined that the fair value of the Lydia Diamond shares was $0.048 per share and ordered that a total of $1,071,162 be deposited into court including the $400,000 previously deposited by Lydia Diamond.

On May 19, 2011 the Court approved a series of transactions designed to settle various outstanding claims agains Emilia von Anhalt with the proceeds of the dissent award. These transactions are summarized below.

Crown William Purchases Shares of Crown William from Lydia Diamond for Cancellation

Pursuant to the Dissent Rights Support Agreement the following transactions were undertaken:

1. Crown William repurchased 3,718,512 (approximately 37% representing all of Ms. von Anhalt's portion) of the 10,022,943 Crown William shares issued on the purchase of the Madoc Project for the sum of $1,071,162; and

2. Crown William paid that amount by converting the $400,000 loan to Lydia Diamond into a portion of the purchase price, and by delivering a promissory note in the amount of $671,162 (the "Crown William Note").

The Crown William Note was ultimately returned to Crown William in recognition of its having satisfied the claims of Litigation Creditors against Lydia Diamond and Emilia von Anhalt as discussed below.

Funding of Fair Value Payment to Emilia von Anhalt

As noted above, the fair value of the Lydia Diamond shares was $0.048 per share for a total of $1,071,162. However, both Lydia Diamond and Emilia von Anhalt owed certain amounts to creditors as follows:

1. Lydia Diamond and Emilia von Anhalt were jointly liable for two judgments aggregating approximately $982,000 (the "Judgments") owed to separate groups of litigants (the "Litigation Creditors") arising from legal proceedings relating to fraudulent misrepresentations. Crown William purchased these Judgments from the Litigation Creditors for $982,000, payable by way of two promissory notes (one for $260,000 payable out of funds in court for the benefit of Lydia Diamond; one for $322,000 payable on November 1, 2011) and $400,000 payable by Crown William issuing 200,000 common shares at an ascribed value of $2.00 per share;

2. Emilia von Anhalt owed the Ontario Securities Commission a total of $100,000 pursuant to an outstanding fine (the "Fine"); and

3. Emilia von Anhalt owed professional fees as a result of her dissent action (the "Fees");

The foregoing items were partially satisfied by payments out of the cash held in court for the benefit of Lydia Diamond, being $413,372.83 (the original $400,000 deposit plus interest):

1. $260,000 was paid out of court at the direction of Crown William to the Litigation Creditors in satisfaction of one promissory note, $100,000 was paid out of court to the OSC with respect to the Fine, and the remaining $53,372.83 was paid out of court in partial satisfaction of the Fees;

2. Crown William paid the remaining Fees plus further amounts necessary to satisfy Lydia Diamond's obligations to pay costs of the applications to the Court; and

3. Lydia Diamond returned to Crown William the Crown William Note in full and final satisfaction of the Judgments (leaving Crown William with a shortfall of $51,000 plus the remaining Fees).

As a result of these transactions, Lydia Diamond's obligations to Emilia von Anhalt were satisfied in full, and her obligations to the creditors noted above were also satisfied in full. Her shares in Lydia Diamond have been cancelled. In addition, the purchase price for the 3,718,512 shares of Crown William purchased from Lydia Diamond by Crown William for cancellation was satisfied in full.

Now that the dissent action has been resolved, Crown William will focus on its continuing efforts to raise financing for exploration on the Madoc Project, to prepare and clear a prospectus for its shares to allow the distribution of shares held by Lydia Diamond to its shareholders, and to conclude the winding up of Lydia Diamond, as approved by its shareholders at the meeting on December 23, 2009.

Additional Information

This news release contains forward-looking statements. These statements are based on information currently available to Lydia Diamond and Lydia Diamond provides no assurance that actual results will meet management's expectations. Forward-looking statements include estimates and statements that describe Lydia Diamond's future plans, objectives or goals, including words to the effect that Lydia Diamond or management expects a stated condition or result to occur. Forward-looking statements may be identified by such terms as "believes", "anticipates", "expects", "estimates", "may", "could", "would", "will", or "plan". Since forward-looking statements are based on assumptions and address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results relating to, among other things, the completion of the dissent payment arrangement as disclosed in this press release, could differ materially from those currently anticipated in such statements for many reasons such as: changes in general economic conditions and conditions in the financial markets; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments; and other matters discussed in this news release. This list is not exhaustive of the factors that may affect any of Lydia Diamond's forward-looking statements. These and other factors should be considered carefully and readers should not place undue reliance on Lydia Diamond's forward-looking statements. Lydia Diamond does not undertake to update any forward-looking statement that may be made from time to time by Lydia Diamond or on its behalf, except in accordance with applicable securities laws.