August 28, 2003

News Release: Diamond Production Starts with Recovery of a 25 Carat Gem Diamond; More Than One Hundred Carats Produced in the First Week

DIAGEM is pleased to announce that commercial mining operations carried out under an 'experimental mining'permit started on August 16, 2003. The work began on the Fazenda Chicoria Diamondiferous Gravel Resource Block No.1 in the Juina Diamond Province, State of Mato Grosso, Brazil.

The first three days of mining and processing, from August 20 to August 22 inclusive have yielded 307 diamonds weighing 109.98 carats including a gem quality stone of 25.20 carats. The average grade of the diamondiferous gravels was 0.56 carats/cu.m. including the large stone, and 0.41 carats/cu.m. without it, exceeding all expectations in both cases. Normal start-up problems that include dry season water problems are being addressed and management accordingly anticipates that weekly caratage will gradually increase. Diagem is a diamond exploration company holding significant diamond interests in Brazil and Canada. In Brazil it owns 20 properties totaling 130,000 hectares, in addition to the Joint Venture Property 1000, containing extensive diamondiferous gravels and 8 kimberlite pipes, located within the Juina Diamond Province, historically Brazil's largest diamond producing area. In Canada, through its interest in KWG Resources Inc.(TSXV: KWG), Diagem has an indirect interest in diamond exploration projects in the James Bay Lowlands and Wawa areas, in addition to the McFauld's Lake massive sulphide discovery, in Ontario.

The technical content of this news release has been approved by Dr. Mousseau Tremblay, of Williamstown, Ontario, a Qualified Person, President and CEO and director of Diagem International Resource Corp.

For and on behalf of

DIAGEM International Resource Corp.

Mousseau Tremblay, President &CEO

Certain of the statements made may contain forward-looking statements, which involve known and unknown risk, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. We do not expect to update forward-looking statements continually as conditions change and you are referred to the full discussion of the Company's business contained in the Company's Annual Information Form dated November 8, 2002 filed with the securities regulatory authorities. Diagem International Resource Corp. shares (Symbol: DGM) trade on the TSX Venture Exchange.

Diagem International Resource Corp.Connie FischerInvestor Relations(604) 542-2211 or Toll Free: 1-888-906-0444Email: This email address is being protected from spambots. You need JavaScript enabled to view it. International Resource Corp.Mousseau TremblayPresident &CEO(604) 688-GEMS (4367)(604) 687-3912 (FAX)orDiagem International Resource Corp.Tony WoodCOO &CFO(604) 688-GEMS (4367)(604) 687-3912 (FAX)Email: This email address is being protected from spambots. You need JavaScript enabled to view it. Website: www.diagem.com

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