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Diagem Recovers More Than 10,000 Commercial Size Diamonds at Collier-04

Posted on: Thursday, 5 July 2007, 12:24 CDT

Diagem Inc. (TSX VENTURE: DGM) is pleased to report that more than 10,000 commercial size diamonds have been recovered at Collier-04 during commissioning of the pilot concentration plant. Corresponding carat weight and the carat weight category of the coarser diamonds are shown in the table below as of June 29th.

 ----------------------------------------------------------------------- ---                       Diamonds coarser than 1.7 mm --------------------------------------------------------------------------                        # Diamonds   # Diamonds   # Diamonds     # Diamonds                Total       1 to 2       2 to 4      4 to 10          above # Diamonds    Carats       carats       carats       carats      10 carats --------------------------------------------------------------------------     10,025     1,266           35            6            4    1(17 carats) -------------------------------------------------------------------------- 

The Company's strategy is to generate cash flow while continuing to evaluate the weathered portion of 17 hectare Collier-04 kimberlite pipe with large-scale surface bulk sampling. During the spring of 2007, 9,418 m3 of in situ diamondiferous material have been excavated with 30% of the material still to be processed for diamond recovery. Once a 3,000 to 5,000 carat parcel of diamonds has been accumulated, it will be sent to Antwerp, Belgium for evaluation and marketing purposes.

The objective at Collier-04 is to increase to 75 to 80% efficiency the nominal capacity of the plant, and achieve 3,100 to 3,300 m3 per month. With an added second shift, volume will increase to the projected 6,000 to 7,000 m3 of material per month, approximately 75,000 m3 per year, in order to produce 25,000 carats of diamonds assuming a grade of 0.3 carat per cubic metre (ct/m3). Three areas have been defined for open pit excavation where little or no stripping is required. This was done using a 0.2 ct/m3 cut-off grade, for the combined in situ diamondiferous soil, eluvial and weathered oxidized kimberlitic material where economic parameters are similar to those of alluvial gravels. Based on Rio Tinto's historical resource estimate exceeding 10 million tonnes of kimberlitic material, Diagem has potential to expand the operation to the underlying hard rock kimberlite should the initial exercise prove to be feasible.

Sufficient data on grade and volume have now been accumulated on the weathered portion of the Collier-04 kimberlite pipe for the elaboration of an independent qualified NI 43-101 resource estimate to be executed in July/August 2007 (See Press releases of August 11th, September 20th, 2006 and April 12th, 2007 press releases for previous information on the subject). The Company cautions the reader that a feasibility study has yet to be conducted on the property to determine profitability and that the property is subject to certain production royalties which may be detrimental to the viability of the project. Under Brazilian legislation, the Company holds a mining concession on the property and has obtained all the mining and environmental permits to extract and market the diamonds recovered on the Collier-04 development block.

In June, the pilot plant reached its highest level of performance close to the 22 m3/hr plant capacity, in terms of the effective operational hours, with considerable improvement to the heavy mineral concentration ratio which has doubled during the period as shown in the table below.

 ----------------------------------------------------------------------- ---               Pilot plant performance during commissioning --------------------------------------------------------------------------      Nominal Cap. Pilot Plant: 22 m3/hr       Diamonds greater than 1.7 mm --------------------------------------------------------------------------                             Comparative                           Concentration 2007   Volume m3   m3/hr          Ratio   Carats  Grade Ct/m3     Comments -------------------------------------------------------------------------- March      1,034      11           70:1    342.4         0.33    Completed April      1,115      13           95:1    367.7         0.32    Completed May        2,349      15          140:1    509.2            -  In Progress June       2,850      20          149:1     46.9               In Progress Sub Total  7,388 --------------------------------------------------------------------------                         Movable Plant Production --------------------------------------------------------------------------    Nominal Cap. Movable Plant: 10 m3/hr --------------------------------------------------------------------------            2,030(ii)               77:1    271.3               In Progress --------------------------------------------------------------------------                             Total Production -------------------------------------------------------------------------- Total      9,418 -------------------------------------------------------------------------- (i) Feed up to June 29th. (ii)Diamond recoveries from heavy mineral concentrates using the movable     plant will be used to compare to the pilot plant recoveries. 

About Diagem

Diagem Inc. is a Canadian exploration mining company focused on 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 a cluster of kimberlite pipes believed to be the main source of the Juina Province historical alluvial diamond production.

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.

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)  Nicole Blanchard Investor Relations 450-627-6600  

SOURCE: Diagem Inc.

Source: MARKET WIRE

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