TORONTO, ONTARIO - Oct. 18, 2004 - Tsodilo Resources Limited ("Tsodilo") (TSX Venture Exchange: TSD) is pleased to announce the discovery of a new kimberlite on its Newdico (Pty) Limited license block in Botswana.

Drill target 1821 - C12 is a coincident magnetic and gravity anomaly with an indicated diameter of approximately 800 meters. The magnetic anomaly is dipolar and roughly circular, indicative of a pipe-like intrusive body. The target was tested with a vertical reverse circulation drill hole. Highly altered, fine-grained crater sediments were intersected at a depth of 48 meters, underlying sandy overburden of the Kalahari Formation. The drillhole was stopped at 150m depth still in crater sediment.

Drill cuttings will be sent to Mineral-Logic in Cape Town, South Africa, for integrated petrographic and indicator-mineral analysis and if warranted to the Saskatchewan Research Council for micro-diamond analysis and interpretation. The results will be released on completion of the processing.

Target 1821 - C12 is located approximately 20km east of the Namibia / Botswana border in the Company's Newdico licence block. The kimberlite lies within the Nxau Nxau kimberlite field where 21 kimberlites have been identified to date. Previous geochemical sampling work by the Company identified a discrete kimberlite indicator mineral anomaly in this portion of the Nxau Nxau field. Several additional anomalies within this cluster will also be tested in the current drill program. Please visit the website, www.TsodiloResources.com, for additional information and background on our projects.

Mr. James M. Bruchs, President and CEO of Tsodilo Resources Limited, states that "Drilling of kimberlite at 1821 - C12 represents another achievement for Tsodilo's exploration program in northwest Botswana. In our Newdico licence block we have numerous kimberlites, some of which have already been proven to be diamondiferous. This discovery validates the approach we have used for target selection and provides improved criteria for prioritization of future drill targets. I am confident that additional kimberlite discoveries will follow."

Tsodilo Resources is an international diamond exploration company engaged in the search for economic kimberlites at its Newdico and Gcwihaba projects in northwest Botswana. Tsodilo has a 75% stake in Newdico while Trans Hex Group, a South African diamond mining and marketing company, holds the remaining 25%. The southern Gcwihaba Project area is 100% held by Tsodilo subsidiary Gcwihaba Resources. Tsodilo manages the exploration of both license areas. The design and conduct of the Company's exploration program is the responsibility of Peter Walker, a professional geologist registered with the South African Council for Natural Scientific Professions.

This news release may contain assumptions, estimates, and other forward-looking statements regarding future events. Such forward-looking statements involve inherent risks and uncertainties and are subject to factors, many of which are beyond the Company's control, which may cause actual results or performance to differ materially from those currently anticipated in such statements.

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FOR FURTHER INFORMATION PLEASE CONTACT:
Tsodilo Resources Limited
James M. Bruchs
President and Chief Executive Officer
(416) 800-4214
(416) 572-4164 (FAX)
JBruchs@TsodiloResources.com
or
Tsodilo Resources Limited
Peter W.A. Walker
Vice President, Exploration
(416) 800-4214
(416) 572-4164 (FAX)
PWalker@TsodiloResources.com
www.TsodiloResources.com

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.