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Diagem Recovers Gem-Quality Diamonds of 5.46 and 5.60 Carats at Collier-04

Posted on: Tuesday, 2 October 2007, 12:00 CDT

Diagem Inc. ("Diagem" or "the Company")(TSX VENTURE: DGE) is pleased to report the recovery of two particularly valuable gem-quality diamonds of 5.46 and 5.60 carats from the August bulk testing of the weathered portion of the Collier-04 kimberlite pipe. Pictures of the two diamonds are posted on the Company's website (www.diagem.com). Gemologist Daniel Berringer, of the Brazilian Institute of Gems and Precious Metals ("IBGM"), has been contracted by Diagem to evaluate these diamonds together with a more than 6,000 carat parcel of diamonds also recovered from Collier-04.

Diagem's Chief Executive Officer, Denis Francoeur, commented: "This is extremely encouraging. The recovery of such stones will definitely enhance ore value at Collier-04."

To date, diamonds weighing 1.0 carat or more each (244 diamonds weighing in total 518.8 carats) make up 7.6% of the total carat weight of all diamonds recovered. Table 1 below lists the plus 1.0 carat diamonds, recovered during this period, categorized by weight.

Table 1: Diamonds Weighing More Than 1 Carat

 --------------------------------------------------------------------       Total     Individual   Diamonds greater than   1 to 2     2 to 4     4 to 10     above 10       1 carat             carats     carats      carats       carats -------------------------------------------------------------------- # Diamonds        244       184         38          18            4 -------------------------------------------------------------------- Carats          518.8     249.7      107.8        93.6         67.7 -------------------------------------------------------------------- 

A total of 57,311 diamonds weighing 6,858 carats have been recovered from the processing of 19,767 cubic metres of in situ material at Collier-04. This represents an average diamond grade of 0.35 carats per cubic metre and an average carat weight of 0.12 carats per diamond.

Table 2 below charts the diamonds recovered at the Company's X-Ray Separator facility and represents the bulk extraction of the kimberlitic material to the end of August 2007 since commissioning of the pilot plant.

Diagem continues to assess the economic feasibility of the Collier-04 project which, in addition to the value of the diamonds, is dependant upon several other variables and improvements including increasing throughput at the plant through additional work shifts, and the economically efficient recovery of diamonds between 1.0 to 1.7 millimetres in size. Both of these initiatives have the potential to significantly enhance the economics of the operation. Implementation of equipment upgrades at the X-Ray sorting facility, which is currently in progress, and the installation of a grease table are also expected to improve future diamond recovery and contribute to a higher return.

Table 2: Collier-04 Kimberlite Pipe Diamond Recovery and Grade

 ---------------------------------------------------------------------        Pilot Plant Performance (one shift - 5 days per week) ---------------------------------------------------------------------        Pilot Plant Nominal                 Diamonds greater than         Capacity: 22 m3/hr                        1.7 mm --------------------------------------------------------------------- 2007      Volume m3    m3/hr     Carats    Grade ct/m3    # of Stones --------------------------------------------------------------------- March         1,034       11        342           0.33          2,722 --------------------------------------------------------------------- April         1,151       13        368           0.32          2,954 --------------------------------------------------------------------- May           2,349       15        620           0.26          4,875 --------------------------------------------------------------------- June          2,850       18        840           0.29          6,410 --------------------------------------------------------------------- July          3,480       19      1,391           0.40         11,334 --------------------------------------------------------------------- August        3,497       17      1,211           0.35         10,323 --------------------------------------------------------------------- Sub Total    14,361               4,772           0.33         38,618 --------------------------------------------------------------------- ---------------------------------------------------------------------                     Moveable Plants Performance --------------------------------------------------------------------- Moveable Plants each with a Nominal      Capacity of 10 m3/hr (i) --------------------------------------------------------------------- All           5,406        9      2,086           0.39         18,693 ---------------------------------------------------------------------                        Total Diamond Recovery --------------------------------------------------------------------- Grand Total  19,767               6,858           0.35         57,311 --------------------------------------------------------------------- (i)The moveable plants ceased testing at Collier-04 in mid-August 

This press release has been reviewed by Mousseau Tremblay, Ph.D, P. Eng., Diagem's Chairman and a qualified person under National Instrument 43-101.

About Diagem

Diagem Inc. is a Canadian exploration mining 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 recently discovered two clusters of kimberlite pipes believed to be the main sources of the Juina Province 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

 Contacts: Diagem Inc. Denis Francoeur CEO 514-866-6001 (ext 265)  Diagem Inc. Paul Einarson CFO 514-866-6001 (ext 251)  Diagem Inc. Nicole Blanchard Investor Relations 450-973-6690 www.diagem.com

SOURCE: Diagem Inc.

Source: MARKET WIRE

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