Updated April1, 2008

Under the Darnley Bay joint venture, Diadem proposes to carry out up to 5,000 metres of diamond drilling following completion and analysis of further detailed ground gradiometer magnetic surveys which commenced April 02nd, 2008 and will be completed by the end of April. The surveys are to better define the precise locations of drill targets. Permitting for the drilling program is currently in process. Costs of the ground survey and related work and permitting will satisfy Diadem’s final earn-in requirement. To date, Diadem reports it has invested over $3.5 million in the Franklin Diamond Project. To satisfy its remaining 50% earn-in requirement it is making further expenditures of about $450,000 by June 30, 2008

A joint venture with an optionee, whom has right to earn 50% interest in the diamond project, has completed 52,000 line-kms of an airborne survey and has added an additional 11 highly rated kimberlite targets to the drilling inventory.

Under the joint venture, ground magnetic surveys were completed over 22 of the kimberlite targets. Eight are considered to be high priority drill targets; 3 targets exhibit characteristics consistent with known kimberlites on the property, of the remaining 5 targets, 3 are negative anomalies and 2 are positive circular magnetic anomalies. The existence of kimberlite targets of varying magnetic signatures are consistent with known kimberlite fields elsewhere in the Canadian Shield and may indicate more than one age of kimberlite intrusion.

The diamond joint venture has flown approximately 52,000 line-kms of an airborne magnetic survey and collected 223 till samples for heavy mineral processing and optical examination for kimberlite indicator minerals. Only a very small percentage of the magnetic targets have been tested and continuing exploration could lead to a new diamond province in the N.W.T.

The Joint Venture 2005 results are very encouraging, as many of the kimberlite indicator minerals analyzed originated from the diamond-bearing kimberlites. The Joint Venture has identified 13 high priority drill targets in addition to DBR’s 10 previously drilled kimberlite targets. The known kimberlite targets are to be tested by diamond drilling. The objective of the drilling should be to outline the dimensions and size of the pipes, as well as to collect larger sample for micro-diamond analysis. The Joint Venture optionee is endeavoring to identify a senior industry partner to drill test the remaining kimberlite targets.

The following are photo enlargements of diamonds found in the till samples:

Thrasher Zone – Macro Diamond (Sample XS5754)		N.W. Zone – Micro Diamond
Size: -1mm to +0.5mm		Size: -0.5 mm to +0.3 mm
The stone is a colourless, somewhat distorted octahedral diamond with variable and often pronounced development of the dodecahedral form.		The diamond is a colourless, almost perfect octahedron, with characteristics of diamonds from the upper part of a kimberlite (e.g. at Venetia or Jwaneng) estimated as being brought to earth’s surface more than 70 million years ago.
Ref: De Beers – consignment CAN 99-238		Ref: De Beers – consignment CAN 99/230

The kimberlites found to date are likely only a small percentage of those that actually occur in the area.