Archangel Diamond Corporation Terminates Transaction for Purchase of Shares in AGD

TORONTO, ONTARIO, Jan 12 (MARKET WIRE) --
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

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