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Post by Franko10 ™ on Aug 4, 2005 10:26:44 GMT -5
Diagem Inc: Announcement 11:20 EDT Thursday, August 04, 2005 MONTREAL, QUEBEC--(CCNMatthews - Aug. 4, 2005) - Diagem Inc. ("Diagem" or the "Company") (TSX VENTURE:DGM) wishes to advise that the March 31, 2005 unaudited Interim Consolidated Financial Statements and MD&A were revised and re-filed on SEDAR on August 4, 2005. The re-filed financial statements were revised to include the expensing of the cost of stock options granted since July 1, 2002 with a restatement of the prior period. The effect of the revision was to increase the net loss for the nine-months ended March 31 by $233,600 in fiscal 2005 and by $47,250 in fiscal 2004. The opening deficit was increased by $562,511 for fiscal 2005 and by $195,284 for fiscal 2004 reflecting the full year effect of fiscal 2003 and 2004. Note disclosure regarding the Company's accounting policy for stock option expense and the MD&A were also updated to reflect the change in accounting policy. For and on behalf of DIAGEM INC. "Mousseau Tremblay" Chairman of the Board FOR FURTHER INFORMATION PLEASE CONTACT: Diagem Inc. Paul Einarson CFO (514) 866-6001 ext. 241 (514) 866-6193 (FAX) www.diagem.comTHE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS PRESS RELEASE.
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Post by Franko10 ™ on Aug 5, 2005 14:39:50 GMT -5
Points I noticed while reading the reviewed version.
PROPERTY 1000
The final exploration report for the property was submitted to the DNPM in December 2004. The Company is waiting for approval of the report. Activities on this property are still subject to an IBAMA embargo.
Fluctuating Prices
The Company's revenues have been and are expected to be derived from the extraction and sale of diamonds. Diamond prices can fluctuate widely, and are affected by numerous factors beyond the Company's control, including international economic and political trends and the control of the supply of rough diamonds to the world markets exerted by De Beers, who are reported to control between 60% and 70% of the world's rough diamonds. Other factors include: expectations of inflation, currency exchange fluctuations, interest rates, global or regional consumptive patterns, speculative activities and increased production due to improved extraction and production methods. The effect of these factors on the price of diamonds, and therefore the economic viability of any of the Company's exploration projects, cannot accurately be predicted.
As previously mentioned, approximately 60% to 70% of the world's supply of diamonds has been sold through De Beers' Central Selling Organization ("CSO") with the result that diamond prices have on the whole been relatively stable. From time to time a new or existing source of production may elect not to market its diamonds through the CSO. As a result, the extent of the CSO's control over the supply of rough diamond can be diluted. This may impact the ability of De Beers to maintain stable and favorable diamond prices.
Properties 213 & 214
As of April 3, 2001, DDB entered into a renegotiated agreement with Rio Tinto Desenvolvimentos Minerais Ltda (100% owned subsidiary of Rio Tinto Plc) regarding the 213 & 214 properties totaling approximately 20,000 hectares located in Mato Grosso State, Brazil. This agreement supersedes the previous agreement dated March 18, 1999 and provides Diagem with a 100% ownership interest in these properties, whilst Rio Tinto retains a limited option to back into the properties for up to a 55% interest or receive royalties, ranging from 1.5% to 2.5% on production from diamond deposits. Additional royalties of 2.5% are payable on the development of a specified area capped at cumulative payments of US$6 million. This option will terminate within 90 days once the Company has completed US$6 million of expenditures on these properties. Rio Tinto’s option is with respect to primary source deposits only and excludes the Company’s alluvial operations on the properties.
Juina Mining Mineração Ltda Joint Venture – Property 1000
Pursuant to a joint venture agreement dated October 19, 2000 and August 14, 2003, the Company has a 51% interest in Juina Mining Mineração Ltda (“JMML”) with the Juina Mining Corporation (“JMC”) a US registered public company.
JMML explores for alluvial and hard rock sources of diamonds on a property of approximately 1,000 hectares, called “Property 1000”. The terms of the agreement require the parties to fund the project in proportion to their respective interests. Management of the joint venture is conducted through a Joint Venture Management Committee, with each party having equal participation. The Company, as operator conducts the work programs approved by this committee. In the event that either party is unable to contribute its share of cash calls, its ownership interest will be diluted on a proportional basis, with a provision for an accelerated dilution in the event of the defaulting parties interest falling below 10%. During the year the Company and JMC amended joint venture terms providing Diagem with operating control over the Joint Venture Management Committee. The Company committed to convert an excess contribution to JMML of US$98,000 into 1,800,000 shares in JMC once outstanding operating permits are issued. The Company has submitted a final exploration report and is awaiting approval before applying for a mining concession on the part of the property where exploration work has been undertaken. The activities on this property are restricted due to an IBAMA embargo.
Funding
The proceeds of the non-flow-through portion (approximately $1,450,000) were used for general working capital, to fund capital equipment upgrades on the Company’s projects in the Juina Diamond Province, Brazil (approximately $1,150,000) as well as further investment in KWG (approximately $300,000).
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