Diagem Inc.

Diagem Inc.

March 16, 2005 10:04 ET

Diagem Makes Strategic Investment in Sachigo/Greenstone Belt in the McFaulds Lake Area of the James Bay Lowlands


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: DIAGEM INC.

TSX VENTURE SYMBOL: DGM

MARCH 16, 2005 - 10:04 ET

Diagem Makes Strategic Investment in
Sachigo/Greenstone Belt in the McFaulds Lake Area of
the James Bay Lowlands

MONTREAL, QUEBEC--(CCNMatthews - March 16, 2005) - Diagem Inc. (TSX
VENTURE:DGM)is pleased to announce a $800,000 private placement in
MacDonald Mines Exploration Inc. and the acquisition of the right to
earn a 50% interest in 39 mining claims in the McFaulds Lake area of the
James Bay Lowlands.

These transactions will result in Diagem becoming a pivotal player in
developing an overall exploration strategy for the entire Sachigo
Greenstone Belt/McFaulds Lake Area with an interest in claims extending
over sixty kilometers of this belt, both directly through its
acquisition of a right to earn an interest in properties currently owned
by Noront Resources and Freewest Resources, and indirectly through its
substantial shareholdings in MacDonald Mines and KWG Resources.

Early stage discoveries in the area, especially the high grade VMS
discovery at McFaulds Lake, offer the potential of a Noranda type VMS
camp. Dr. James Franklin PhD., P. Geo in reports for KWG/Spider and Dr.
Tucker Barrie PhD., P. Geo in reports for MacDonald both outline the
significant potential of this area through their collective insights and
exploration involvement. Existing MacDonald airborne geophysics and
preliminary ground exploration also offer the potential of both
kimberlite and gold exploration targets.

Early indications highlight a well mineralized Greenstone Belt, which
features a rich VMS occurrence and discovery by the Joint Venture
partners KWG Resources/Spider Resources. MacDonald Mines has followed on
from this high potential McFaulds discovery with promising VMS
discoveries on its MacNugget Properties, which are on strike from the
McFaulds discovery.

Pursuant to Diagem's private placement, MacDonald will issue 8,000,000
non flow-through units at the price of $0.10 per unit for $800,000. Each
unit consists of one (1) common share of MacDonald Mines and one (1)
common share purchase warrant. One (1) common share purchase warrant
entitles the holder to purchase one (1) common share of MacDonald Mines
at an exercise price of $0.15 for a period of twenty-four (24) months
from date of issuance. The securities forming the units will be subject
to a four-month hold period.

Diagem Inc. has agreed to acquire MacDonald's entire interest under the
MacDonald/Hawk Precious Minerals Assignment Agreement, which permits
MacDonald to acquire 100% of Hawk's right to earn a 50% interest in 39
mining claims owned by Noront Resources and Freewest Resources which are
located in the McFaulds Lake area of the James Bay Lowlands. To earn the
50% interest in the 39 claims, Diagem has to expend $1,208,000 on the
property by July 31, 2005 and an additional $1,850,000 by November 2007.
In full consideration for this assignment, and subject to regulatory
approval, Diagem will issue 4,000,000 common shares and 2,000,000
warrants to MacDonald Mines. One (1) warrant will entitle the holder to
purchase one (1) common share of Diagem at an exercise price of $0.25
for a period of twenty-four (24) months from date of issuance. These
securities will be subject to a four-month hold period.

For and on behalf of

DIAGEM INC.

"Mousseau Tremblay"

Chairman and CEO

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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    DIAGEM INC.
    Mousseau Tremblay
    Chairman and CEO
    (514) 866-6001 / (613) 347-2561
    (514) 866-6193 (FAX)
    www.diagem.com
    THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT
    RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS PRESS RELEASE.