Diadem agrees with partner for development of Indonesian base metal deposits

DIADEM RESOURCES LTD. (DIR.ME) is pleased to announce an agreement to develop its zinc-lead-silver-tin deposits on the island of Belitung, Indonesia. Herald Resources Limited (HER.ASX) has agreed to further explore and develop Diadem's Kelapa Kampit deposit plus the two applications for Contracts of Work filed by Diadem to further explore the Tikus tin-base metal deposit and Lilangan gold deposit. The agreement is subject to regulatory approval.

Six drill holes are planned by Herald Resources to start soon as part of its due diligence program, which will include metallurgical testing. Base metals are the main target.

At the Kelapa Kampit project, a report on previous work by L.L. Subang B.Sc., Diadem's consultant geologist, dated March 1999 has outlined an indicated resource of 13.38 million tonnes averaging 6.59% zinc, 4.02% lead, 59.86 grams/tonne silver and an inferred resource of 12.23 million tonnes averaging 6.52% zinc, 4.00% lead and 59.75 grams /tonne silver. These total 25.61 million tonnes averaging 6.56% zinc, 4.01% lead and 59.81 grams/tonne silver using a 4% combined lead-zinc cut-off. This resource calculation is based on drilling only 1.5km of a 7.5km length of mineralization previously identified by geochemical and geophysical surveys.

Herald Resources is an Australian mining company with a market capitalization of A$16.6 million and a working capital of A$8.1 million as at the end of June 2000. Herald owns two gold mines in Australia, currently closed pending an increase in the gold price, and exploration projects on Belitung, Indonesia. It also controls 64% of Canadian listed International Annax Ventures Inc. (IAX.CDNX), which has interests in Sumatra, Kalimantan and Thailand. A finder's fee of 100,000 common shares is payable to P.

T. Mas Bumi and M. Bird, Diadem's Vice-President Asia.

The agreement with Herald Resources provides for a six month initial due diligence program for a minimum cost of US$100,000. Subsequently Herald has the right to farm-in for a 70% interest in the project for a total expenditure of US$3,000,000 with the aim of completing a bankable feasibility study. Herald must fund expenditures of at least US$500,000 (including the amount of US$100,000 expended during due diligence) within two years of the farm-in date. Diadem would retain a 20% interest and an Indonesian partner, 10%. If further funds are required after the expenditure of US$3,000,000 by Herald, Diadem may contribute 22.22% of the costs or dilute to a 3% net smelter return.

Diadem Resources Ltd. is a Toronto-based mineral exploration company with a principal objective to discover, enhance and develop known mineral properties to production potential.

Diadem has a diamond discovery in California; diamond exploration in Ontario; three zinc, copper, silver projects in Mexico; an advanced zinc project in Indonesia; zinc, copper-nickel-cobalt properties in Quebec; and interests in gold properties in Nicaragua.

For further information please contact:

Diadem Resources Ltd. A. C. A. Howe, President (416) 364-2893 (416), Fax: 368-2579 (*)