Diagem’s Chapadao diamonds low in Nitrogen

Diagem Inc. reports the results of a diamond study on the Company’s Chapadão cluster of kimberlite pipes in the Juina Diamond Province, Mato Grosso, Brazil. The study reveals that a large proportion of the Juina diamonds are low nitrogen or nitrogen-free and therefore are excellent candidates for colour and/clarity improvements through ‘High Pressure High Temperature’ (HPHT) techniques. This may increase the value per carat of Juina stones, which have traditionally been sold at relatively low values.

Some other valuable practical implications should be noted:

1. There is a possibility that among a great number of ‘nitrogen-free’ type II-diamonds identified among Juina diamonds, some stones may have a boron structural impurity which forms type IIb diamond variety with very valuable semi-conductive properties. Such diamonds are extremely rare, and their existence may dramatically increase the average price of Juina diamonds. To date, only one pipe in the world, Premier in South Africa, produces semi-conductive diamonds on a regular basis. Type II diamonds are believed to represent 1% to 2% of diamonds worldwide.

2. Secondly, low concentrations of nitrogen and a high grade of nitrogen aggregation in diamonds are empirical criteria for the existence of large diamond crystals in a given primary deposit. In this respect, the Chapadão kimberlitic pipes are quite promising, and one may expect to find large diamond crystals in these pipes. This has already been demonstrated by the valuable Type IIa 9.32 carat pink diamond purchased by the Company earlier this year from the work of an artisanal miner within the Property. (see Gemological Institute of America certificate at www.diagem.com)

Denis Francoeur, Diagem’s CEO says that these findings are extremely encouraging and merit further investigation as they enhance the viability of a potential diamond operation.

The study was conducted by renowned diamond consultant Dr. Felix Kaminsky and colleagues at the KMD/Institute of Diamonds laboratory in Moscow, Russia and is the final of five comprehensive studies undertaken in 2007 on Diagem’s Juina properties. The study was conducted on a series of 1,365 diamonds, the majority of which (1,094) were collected from the Chapadão kimberlite pipes identified to date. The diamonds were studied for their grain size distribution, morphological characteristics, and properties pertaining to their quality as gems (colour, transparency, etc.). Analytical work included the characterization of infrared (IR) spectroscopy, carbon isotopic composition and the study of mineral inclusions for major and trace elements. The trace element compositions in the mineral inclusions were studied using unique equipment at the GEMOC laboratory in the Macquarie University, Sydney, Australia.

Diagem Inc. is a publicly listed Canadian exploration-stage company focused on primary diamondiferous resources in the Juína Diamond Province of Mato Grosso, Brazil, where it controls a large portfolio of mineral properties.

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