JUINA NORTHWEST (211, 219, 213 AND 214 )

Diadem is confident that the embargo on the Chapadao Kimberlite Project can be lifted in the weeks to come following a meeting with the president of IBAMA in Brasilia, Brazil on August 27, 2008. The company is awaiting resolution of these matters before resuming field activities on the Chapadao Project. In addition, the previous embargo on Property 213 will be reviewed in conjunction with the Chapadao embargo.

Reported that three licences of operation (LOs) from the Mato Grosso State Secretariat of the Environment have been granted. The LOs provide the authorization from the environmental agency to perform bulk sampling of delineated alluvial deposits, kimberlite pipes and kimberlite pipe targets. Bulk sampling has commenced on property 211 and will begin shortly on properties 118 and 119. An objective of the bulk sampling program is to determine mineralization and obtain preliminary grade determination of the delineated alluvial deposits which cover extensive portions of the three properties.

Diagem has been granted three licences of operation (LO) from the Mato Grosso State Secretariat of the Environment (SEMA) relating to properties 118, 119 and 211 which are wholly-owned by Diagem and cover approximately 20,000 hectares of exploration concessions in the Juina diamond province in the state of Mato Grosso, Brazil. The LOs provide Diagem with the authorization to perform bulk sampling of delineated alluvial deposits, kimberlite pipes and kimberlite pipe targets.