Diagem Inc.
TSX VENTURE : DGE

Diagem Inc.

April 30, 2008 09:40 ET

Diagem Recovers a 6.2 Carat Gem-Quality Diamond and Contests an IBAMA Intervention

MONTREAL, QUEBEC--(Marketwire - April 30, 2008) - Diagem Inc. ("Diagem" or "the Company") (TSX VENTURE:DGE) reports the recovery of a 6.23 carat gem-quality diamond during bulk sampling at its Chapadao Diamond Project in Mato Grosso, Brazil. The initial 68.7 cubic metre sample yielded a total of 102 commercial-size diamonds (i.e. greater than 1.7mm) weighing in total 24.5 carats for a grade of 0.36 carats per cubic metre.

"The recovery of a 6.23 carat gem-quality diamond so early in the bulk sampling program is extremely encouraging, though not unexpected," said Denis Francoeur, CEO of Diagem. "High-value coarse diamonds have been recovered by artisanal miners on the Chapadao. An example is the valuable 9.32 carat pink diamond purchased by Diagem. What comes as a surprise is the IBAMA intervention and its obvious inaccuracies. Diagem is seeking immediate correction through legal means."

Earlier preliminary bulk sampling conducted by Diagem in November and December of 2006 recovered a total of 849 diamonds coarser than 1.7 millimetres and weighing 155 carats including a 4.67 carat diamond and eight diamonds ranging between 1.20 and 1.34 carats. The 13 original bulk samples reported diamond grades ranging between 0.28 and 1.26 carats per cubic metre with an average of 0.66 carats per cubic metre from 243 cubic metres of material (see press release dated January 11, 2007).

The lower grade reported in the latest sample is attributed to excessive dilution due to local displacements which has caused the pinching and swelling of the diamondiferous layer. The expectation is that higher grades are likely to be encountered.

The bulk sampling program is designed to further delineate and determine the diamond grade of the near-surface diamondiferous kimberlitic ash-fall layer(s) outlined by auger drilling. The ash-fall diamondiferous layer is interpreted to be a pyroclastic lappilli kimberlitic tuff(s) deposited as an air fall from the eruptive explosion of kimberlite(s). The diamondiferous ash-fall layer varies in thickness between 0.5 and 2.0 metres (0.6 m on average) and covers an extensive area that could be mined with the same economic parameters of an alluvial or gravel deposit. Auger drilling has extended the deposit(s).

The surface bulk sampling was conducted with two 10 cubic metre per hour moveable plants. The resulting heavy mineral concentrates are being processed at the Company's Juina X-Ray Separator facility for the recovery of commercial-sized diamonds.

Prior to the IBAMA notification, two diamond drills were active on the Chapadao Property defining the shape and composition of kimberlite craters while at the same time attempting to intersect the underlying carrot-shaped portion of the kimberlite bodies ("the diatreme"). See the Company's April 15th, 2008 press release for an update on the drilling process, the highlight of which is the recovery of a micro diamond with a pinkish hue from a core sample.

IBAMA Notification

The Company received notification from the Brazilian Federal Agency of the Environment ("IBAMA") to halt the drilling and bulk sampling program the Company has commenced at the Chapadao diamond project. Diagem believes the basis for the action taken by IBAMA to be erroneous. The notification relates largely to deforestation caused by third parties prior to Diagem gaining access to the property. Diagem had documented the deforestation which had occurred prior to the commencement of the recent drilling and bulk sampling program and is providing this information to the relevant authorities. Furthermore, the Company has been evaluating the diamondiferous deposits under a License of Operation from the Mato Grosso State Environmental Agency ("SEMA") and a work permit from the Brazilian National Department of mineral production ("DNPM").

The Company's Brazilian legal counsel has reviewed the IBAMA notifications and concluded that:

- the notifications are not in compliance with Brazilian law and amount to malicious prosecution on the part of the IBAMA agents involved;

- the procedures initiated by IBAMA are abusive and excessive and disproportionate in relation to the alleged wrongdoing;

- due to their non-compliance with environmental regulations and laws, the procedures initiated by IBAMA should be declared null and void.

As a result, the Company is requesting an immediate suspension of the IBAMA notifications.

This Chapadao project has the potential to become a major job creator for the community and has the promise of a significant return for the shareholders who have long supported the Company. The Company will vigorously pursue any and all legal means of reversing the intervention with the goal of rapidly resuming evaluation work on the project

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.

THE TSX VENTURE EXCHANGE DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS PRESS RELEASE

Contact Information

  • Diagem Inc.
    Denis Francoeur
    CEO
    514-448-4961 (ext. 505)
    or
    Diagem Inc.
    Paul Einarson
    CFO
    514-448-4961 (ext. 502)
    www.diagem.com
    or
    Nicole Blanchard
    Investor Relations
    450-973-6600