January 16, 2002

[Franko10 ™]

The Company provides updates on various operational and corporate matters, as follows:
Operations

Exploration license extension
The Company is pleased to announce that it has received official notification from the DNPM (National Department for Mineral Production), Brazil, that its exploration license on property 213 has been extended for a further three years, recognising the extent of the exploration work done to date. Property 213 is central to the Company's alluvial-diamond mining and kimberlite-evaluation projects, in the Juina Diamond Province, Mato Grosso State. Now that the extension has been published, the Company can submit its application for a permit to conduct "bulk testing" on property 213.

Delineation of gravel deposits
In addition to the alluvial exploration work already underway on property 213, the Company has recently commenced delineation of gravel deposits in diamond-bearing areas on property 108 (West Chapada). To date, preliminary results have identified an area underlain by approximately 942,000 cubic metres of gravels. The gravel has an average thickness of 0.70 of a metre with an average cover of 1.4 metres. This brings to approximately 2 million cubic metres the total gravels on the two properties, delineated for bulk testing.

The priority for the alluvial diamond project will be to commence bulk testing of delineated areas to assess diamond grade and value. Detailed planning for the bulk testing program is currently underway.

Plant and Equipment
Most of the construction of the first "moveable" primary concentration plant was completed by the end of 2001. The installation of some ancillary pieces of equipment remains, but it is expected that the plant will commence test operations shortly.

Merger

On August 21, 2001 Diagem announced that it had entered into an arrangement to amalgamate (the "Amalgamation Agreement") with Emerging Africa Gold (EAG) Inc. ("EAG"). The Company and EAG have retained a Canadian investment dealer to provide an opinion as to the fairness of this transaction, the receipt of which is expected shortly.

As a result of the reorganization with EAG, the post merger Diagem will have a significant interest in KWG Resources Inc. ("KWG"). KWG, through its joint ventures with Spider Resources and DeBeers, has made significant investments in several diamond properties in Canada, most notably, in the James Bay Low Land and the Wawa areas of Ontario.

The timing of the previously announced $1million equity financing, which forms an integral part of the Amalgamation Agreement, has not kept pace with the advancement of our projects on the ground. So as not to hinder our progress on the ground, EAG has provided an interim loan of $150,000 repayable from the equity financing. The loan is unsecured and interest free for a 60 day period (thereafter interest will be charged at 15% per annum).

Summary

During the next two months, on a corporate level, the Company will focus on completing the remaining aspects of the EAG amalgamation and closing the $1million financing. On the ground the main objectives will be to complete the detailed planning for, and commence, the bulk testing, of the alluvial diamond deposits in Brazil.

For and on behalf of
DIAGEM International Resource Corp.

"David Cohen"
President