Diadem Resources Limited (DRL-TSXV)

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March 2, 2012 Issue

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Diadem Resources Limited is Focused on Exploring and Developing their Diamond Play, The Parry Peninsula in the Northwest Territories, which could be the next important diamond discovery in Canada

Aime Bertrand
Chairman, President and CEO

Company Profile:
www.diademresources.com

Management of Diadem Resources Limited is focused on acquiring near-production mining opportunities in North America, especially those related to diamonds and gold. Its principal current activity is diamond exploration in the Franklin Bay area of the Northwest Territories. On that project, Diadem now has identified 28 potential kimberlite drill targets on the Parry Peninsula, which currently constitutes the key part of Franklin Bay project area. Ground magnetic surveys have been completed and the results indicate many high priority anomalies which may be caused by kimberlite the host rock for primary diamond deposits. Diadem is finalizing its 2012 drilling program which will be carried out subject to permitting and financing.

Resources
Diamond and Gold Exploration
(DRL-TSXV)

Diadem Resources Limited
400 – 485, MCGILL
MONTREAL, QC H2Y 2H4
Phone: 514-954-1010
www.diademresources.com
 

Interview conducted by: Lynn Fosse, Senior Editor, CEOCFO Magazine, Published – March 2, 2012

CEOCFO: Mr. Bertrand, what is the grand plan for Diadem?

Mr. Bertrand: The grand plan is we will continue to develop our diamond play in the Northwest Territories; specifically in the Parry Peninsula area. Past exploration has located kimberlite bodies with some micro-diamonds and very little drilling to test all targets has been done. A large number of high priority targets have been identified that remain untested. We want to extensively go through systematic exploration on this property during the 2012 season and drill some of the 28 high priority targets that show kimberlite features. In the past few years the weak economy did not allow us to raise the funds required to work there in 2011. In 2010 we completed a small program in late October but only tested 5 targets. Some encouraging technical results were achieved and we recovered one micro diamond from one kimberlite located. Therefore, we know that there are diamonds in the area and we must systematically evaluate all the targets. There is a reasonable possibility that this area could develop into the next important diamond discovery in Canada and we are very excited about being able to explore there in 2012.

It looks like we will be able to raise sufficient funds to do an extensive program starting in May and continuing through October during the favourable weather season. We should be able to test at least the 20 or more targets and therefore we are very excited to get the program underway.

CEOCFO: Are the Northwest Territories in Canada a big producer of diamonds?
Mr. Bertrand: There is already 5 major diamond discoveries in the area south of our property with 3 currently in production, and the area is the third most important diamond producing area in the world by value, so it is definitely a very productive region to be in and we think that our area could be the next one for a significant discovery. The active mines in the area producing diamonds right now will of course be seeing lower production in the coming years as their reserves are depleted. Therefore, we see a very exciting play for us to replace their production if we are successful in making a significant discovery.

CEOCFO: Diadem was able to raise money this year; what is the interest in general in investing in diamonds?

Mr. Bertrand: Actually, diamond prices have been relatively strong due to shortfalls in supply and they are firming up right now. Of course it is very exciting to be in the gold exploration field right now, but for commodities like diamonds, as the economy recovers there will be steady demand and strong prices. As they say, “diamonds are forever” and a new discovery will find its way easily into the market. I do not think diamonds will go away in the economy in the near future. I think it is a long-term goal to be involved in diamonds and I believe that prices will firm up. It is a good commodity to be involved in.

CEOCFO: Does Diadem own your property 100%?

Mr. Bertrand: We used to own 50%. Now we have 100% ownership of the property, and because we intend to be actively involved in drilling in 2012 the 100% ownership is very important to our shareholders. Therefore, things should really look better for our company as we progress through the year.

CEOCFO: What about the people that live in the area now; what is the arrangement with them?

Mr. Bertrand: We have an agreement with the IRC, which is the Inuvialuit Regional Corporation. This is the local aboriginal economic development company and the people there are very excited about our work there. It is a small community with only about three hundred people living on the Parry Peninsula. So, it is very positive that we have a good rapport with those people. They are looking forward to us doing some more work in 2012. In addition, there is a small airport we use for logistic support as well. The people in general are very excited about us being there, because we are the only mining activity going on in their immediate area and it means local jobs and revenue for the village.

CEOCFO: Is it difficult to get personnel and equipment to the location?

Mr. Bertrand: No, not really. In reality we have access from Inuvik and the Mckenzie River system and barge transport along the Beaufort Sea coast for 3-4 months a year The Parry Peninsula is quite accessible by ocean transport. We also have air transport if we need it, so it is relatively easy to move large equipment as well as personnel especially in the time period when we will be active this summer.

CEOCFO: How do you encourage interest; what type of investor outreach have you been doing?

Mr. Bertrand: In the last few years, it has been just my personal contacts and my strong belief that there is a good opportunity in this area. This property should have been much more advanced by this time and as I said before, because of lack of funding we are not able to advance the work programs. We have a strong team on the corporate level, and we have people with lots of experience in diamond exploration that are involved. For example, Lee Barker, one of our directors was part of the team responsible for discovering the second diamond mine in Canada at Diavik. We also worked very closely with Ed Schiller, who is acting with us on special assignments. He was on the team responsible for discovering the first diamond mine in Canada at Ekati. Therefore, we have talented people on our board who know exactly what we are looking for and can guide and interpret the drilling results and can direct future drilling for the company. That will allow us to minimize our cost in doing so, and hopefully find larger and higher grade kimberlites than those containing the small diamonds that we have found so far.

CEOCFO: Final thoughts, investors are always looking for what is maybe a little below the radar screen, why should they pay attention to Diadem Resources today?

Mr. Bertrand: We have been able to locate new investment partners who will be responsible for funding our 2012 program and this is very welcome. These individuals will be active in supporting the company in terms of putting out the message to the mining investment community. I personally will also help by going to various tradeshows and presenting the company. Our directors are also committed to providing information to investors who might be interested in better understanding our work. We plan on being present at the PDAC upcoming events in Toronto in early March. We are also looking to add to our company exploration properties a project specifically located in Quebec to take advantage of the new Plan Nord Program which is providing incentives and new infrastructure and facilities to develop northern Quebec resources. We will be looking for a project on a different scale here in Quebec to see if we can add depth with new projects to increase the diamond play, perhaps in another mineral commodity such as gold.

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The grand plan is we will continue to develop our diamond play in the Northwest Territories; specifically in the Parry Peninsula area. Past exploration has located kimberlite bodies with some micro-diamonds and very little drilling to test all targets has been done. A large number of high priority targets have been identified that remain untested. We want to extensively go through systematic exploration on this property during the 2012 season and drill some of the 28 high priority targets that show kimberlite features… There is a reasonable possibility that this area could develop into the next important diamond discovery in Canada and we are very excited about being able to explore there in 2012. - Aime Bertrand