Diagem temporarily halts exploration

Diagem Inc. temporarily froze its exploration activities in the Juína Diamond Province of Mato Grosso, Brazil and has initiated procedures to significantly reduce its Brazilian workforce until a resolution to the embargo imposed by the Brazilian Federal Environmental Agency (IBAMA) is reached.

Diagem’s legal counsel in Brazil is confident that the IBAMA embargo can be nullified in a relatively short period of time as the deforestation was not performed by Diagem, but by other non-related parties prior to Diagem starting its evaluation program. Diagem is also confident that it will successfully contest an unjustified C$1.1 million fine that is considered illegal, abusive and excessive in this context.

The Company is dedicating its financial and human resources to reversing the embargo. However, during this mandated standby, the Company will continue to comply with obligations to the government and other stakeholders and to maintain its surface and mineral rights, facilities and assets in good standing to the extent permitted by the law.

The Chapadão Kimberlite Project has the potential to become a major employer in the community and has the promise of a significant return for the shareholders who have long supported the Company, commented Denis Francoeur, CEO of the Company. The goal of the Company is to rapidly resume evaluation work on the project, which is undoubtedly in the best interest of the shareholders and the community of Juína. Diagem plans to rehire the laid-off employees once the embargo is lifted.

Source : http://www.diagem.com/

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