Diagem Inc.
TSX VENTURE : DGE

Diagem Inc.

March 26, 2008 11:50 ET

Diagem: Drilling Confirms Crater Facies Kimberlite on Two Targets at Chapadao

MONTREAL, QUEBEC--(Marketwire - March 26, 2008) - Diagem Inc. (TSX VENTURE:DGE) ("Diagem" or "the Company") is pleased to report that drilling has confirmed crater facies kimberlitic rocks on two targets on its Chapadao project located in the Juina diamond district of Mato Grosso, Brazil.

As of March 21, 2008, 780.5 metres of core drilling have been completed in 12 holes to depths ranging between 47 and 100 metres. The holes are being drilled using a 100 metre grid pattern. Drill holes 01, 03, 05, 07 and 09 (in progress) are testing target Pandrea 02 with an interpreted surface area of 31 hectares. Holes 02, 04, 06, 08, 11 and 12 (in progress) are drilling the 11 hectare Pandrea 05 target. Crater facies kimberlitic rocks have been intersected in every hole. Hole 05 recorded crater facies kimberlitic rocks down to a depth of 98.86 metres.

Denis Francoeur, CEO of Diagem commented: "The purpose of the 7,500 metre drill program is primarily to define the shape and composition of preserved kimberlite craters while attempting to intersect the underlying carrot-shaped portion of the kimberlite bodies referred to as the "diatreme". Geological observations suggest that diatreme material may also outcrop in certain localities. The shape and size of the kimberlite craters and of the underlying kimberlite diatremes are a function of several factors including the nature of the host-rock. Kimberlite explosions in less-competent host rocks will have a tendency to create craters much larger than the underlying diatreme. It is early in the drill program and the Chapadao kimberlite emplacement environment is still not fully understood. We are confident, however, about the potential of the Chapadao to host a significant primary diamond deposit."

Crater-facies kimberlitic rocks are identified on the basis of volcanoclastic and/or tuffisitic layers with abundant picro-ilmenites exhibiting pristine grain surface features characteristic of primary source rocks. These units alternate with volcaniclastic rocks and/or reworked sedimentary units both with relatively few diamond indicators. The latter are partly filling the kimberlite craters but form an integral dilutive part of the crater-facies rocks. Crater facies-rocks have been encountered in all the drill holes constituting the larger portion of the drill core. The "Tuffisitic Kimberlitic Ring" deposit, described in more detail under the "Bulk Sampling" section of the press release below, has been identified in drill holes 01 and 05 at depths of less than 10 metres. Silicified reworked breccias, mostly epiclastic in nature (i.e. with sedimentary clasts), occur in six of the drill holes (04, 05, 06, 08, and 09) just before hitting basement rocks. Heterogeneous, non-consolidated and pervasively oxidized sedimentary rocks, interpreted to be Permo-Carboniferous Casa Branca Formation host rocks, have been encountered below crater-facies kimberlitic rocks in three of the diamond drill holes (01, 02, and 07). Eight of the 10 drill holes (02, 03, 04, 05, 06, 07, 08, and 10) have been terminated within competent crystalline basement rocks.

Surface Bulk Sampling to Resume with Two Moveable Plants

A near-surface non-consolidated "ashfall diamondiferous kimberlitic" layer(s) is also present, associated to the crater-facies kimberlitic rocks. This particular unit also referred to as "Tuff-Ring Deposit" varies in thickness between 0.5 and 2.0 metres (0.6 metres on average) occurs over an extensive area and could be mined with the same economic parameters of a gravel deposit. Auger drilling is being conducted and current results are extending the deposit beyond earlier results. Two moveable plants capable of processing 10 m3 per hour of the non-consolidated surface diamondiferous layers outlined by auger drilling will resume the bulk sampling of 200 to 300 cubic metre samples of this material in early April. The resulting heavy mineral concentrates will be processed at the Company's X-Ray Separator facility for the recovery of commercial-sized diamonds.

About the Chapadao Discovery

Previous field work by Diagem has identified seven kimberlite targets as crater facies kimberlitic rocks suggesting the presence of pipe-like kimberlitic bodies forming a tight cluster. The interpretation was based on ground magnetic anomalies and field observations. Independent petrographic, mineralogical and geochemical studies have been conducted on the surface exposures in 2007 and have confirmed Diagem's geological interpretation (press releases of October 10th and November 27th, 2007). Preliminary bulk sampling, conducted in November and December of 2006, indicated diamond grades ranging between 0.28 and 1.26 carats per cubic metre (see press release dated January 11, 2007). A total of 849 diamonds coarser than 1.7 millimetres weighing in total 155 carats were recovered, including a 4.67 carat diamond and eight diamonds ranging between 1.20 and 1.34 carats. Six other kimberlite targets have been identified but need to be confirmed by drilling. The Chapadao area is also known for the occurrence of a valuable rare type of diamonds often harboring a fancy pink color (see press release dated November 13, 2007). The Chapadao area is accessible year round and parts of the potential deposits would be amenable to open pit mining which translates into low extraction costs.

Quality Control Measures

The material collected to date using HQ/NQ drill core tubes is primarily oxidized unconsolidated material. Diagem's trained technicians are posted at the drill site 24 hours per day to systematically hand pan a quarter of the core along 30 cm intervals for the identification of kimberlite indicators. The core is logged at the on-site core shack facility by Diagem's geologists where more systematic hand panning for heavy minerals is conducted. Binocular microscopes are used to aid identification of the kimberlitic indicators. A portion of the indicators and their host rock will be subjected to chemical, microprobe and petrographic analyses at reputable Canadian laboratories to confirm the field observations. The program is under the supervision of Chief Geologist Paulo Andreazza, who has more than 15 years of diamond exploration experience in Brazil and Africa. Diagem is using the services of Brazil-based and ISO certified diamond drill contractor Geosol. The drills operate with two 12 hour work shifts five and a half days per week.

This press release has been reviewed by Christophe Le Noan, M.Sc, Geo., Diagem's qualified person under National Instrument 43-101.

About Diagem

Diagem Inc. is a publicly listed Canadian exploration-stage company focused on primary diamondiferous resources in the Juina Diamond Province of Mato Grosso, Brazil, where it controls a large portfolio of mineral properties. The Company has one advanced development stage project and two recently discovered clusters of kimberlite pipes believed to be significant sources of Juina's historical alluvial diamond production.

Forward-looking statements: Except for statements of historical fact, all statements in this news release, without limitation, regarding new projects, acquisitions, future plans and objectives are forward-looking statements which involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate; actual results and future events could differ materially from those anticipated in such statements.

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Contact Information

  • Diagem Inc.
    Denis Francoeur
    CEO
    514-488-4961 (ext. 505)
    or
    Diagem Inc.
    Paul Einarson
    CFO
    514-488-4961 (ext. 502)
    or
    Nicole Blanchard
    Investor Relations
    450-973-6600