DiaMine Explorations Inc. - Presidents Letter 2010

As chairman of DiaMine Explorations Inc., I would like to thank all of our shareholders for the progress we have made and I am pleased to announce the completion of another promising year for DiaMine Explorations Inc.

DiaMine has successfully advanced one of our main projects in 2009, has acquired an important gold property and has applied for listing on a major European Stock Exchange. We have been able to successfully implement a number of key strategies as well as diversify our holdings into the promising precious metals market. Despite the global decline in the world economy and pressure on industrial diamonds and less expensive commercial goods, diamond prices have stabilized, rough prices have continued to increase in value and diamond production has dramatically declined around the world. We continue to maintain a positive overview of the long-term fundamentals of the diamond market.

DiaMine has spent significant sums of money and time advancing our land holdings in Northern Ontario. We have done two sets of drilling programs, in the summer and the autumn of 2009, with several positive kimberlite indicator minerals coming back from the lab, including chrome diopsides retrieved from the summer drill program and potential garnets currently at the lab awaiting further analysis. Although we have analyzed and surveyed dozens of global diamond exploration projects in order to position DiaMine Explorations Inc. in the strongest areas of diamond exploration, we have decided to concentrate our resources for the time being on this very important area of diamond exploration.

The Canadian economy has been the least affected economy since the global credit crunch began in the autumn of 2008, with several countries around the world looking to Canada to guide their banking system in the future. The Canadian economy has already come out of a very mild recession, with the Canadian banks the most stable in the world and the growth of natural resources positioning Canada as one of the strongest developed economies in the future. Investors around the world examining Canada more closely as a way to protect their wealth and diversify their holdings.

Diamond Market Analysis

Taking a closer look at the diamond industry, diamond supply continues to decline even more rapidly than anticipated, with South African production down significantly and Australian production down over 36 % in 2009. De Beers rough diamond sales have declined 51 % so far this year, to $2.9 billion. Although they have already started increasing production at their mines in Africa, supply is still expected to be under pressure as no new diamond mines are expected to come online in the short term and existing mines are slowly exhausting production.

On the demand side, ALROSA is expecting sales to grow by 51 percent to $3.3 billion in 2010 compared to 2009, and is planning to sell at least 70 percent of its production through long-term agreements next year.

Despite a challenging economic environment, major luxury retailers around the world have still reported solid figures. Reports show U.S. holiday jewelry sales up 5.6%. Luxury retailer Richemont reported improved demand for its jewelry and watch products after the group saw modest growth during the Christmas 2009 quarter. Sales across Richemont’s jewelry maisons, which include Cartier and Van Cleef & Arpels, increased by 5 percent to $1.2 billion during the quarter. Cartier reported good growth in both retail and wholesale sales, while Van Cleef & Arpels performed well at retail during the period, the company stated.

Retail sales in China rose 18 percent to $83.5 billion during the National Day holiday week. Jewelry became a hot seller, with sales at Caishikou Department Store in Beijing topping $14.7 million, an increase of 30 percent over 2008. Many buyers are stocking up on high-quality loose stones.

The Chinese and Indian markets continue to experience strong growth in diamond sales, as investors turn away from paper assets and new dealers and jewelers expand their reach into major cities in these two growing countries.

Rough diamond prices have risen 61 % since their lows in the first quarter of 2009, according to CEO of Harry Winston Robert Gannicott. The consumer price index (CPI) for jewelry in the U.S. rose to its highest level since September 1995 during the month of October 2009. The reading of 159.74 points was 2 percent higher than that of October 2008. It also marked the 21st consecutive month for which the jewelry CPI registered more than 150 points.

Gold had another strong year, with prices ending the year above $1,100 USD from a low in the summer of 2008 at $750 USD. Gold supply declined over 10 % in 2008 and the growth of the middle class in emerging markets and the strong demand for gold as a store of value has poised the precious metal for strong potential growth in the future.
Canadian Diamond Market

Overall, the Canadian diamond mining industry has become the global focus in the diamond market because of the production and profitability of the Diavak and Ekati mines in the Northwest Territories and the potential new production areas in other parts of the country.

For example, De Beers newly launched Canada operations produced 1.6 million carats in 2008, up from 81,000 carats in 2007. Canadian mines are already amongst the most profitable diamond mining ventures in the world. Although diamond production dewas expected to decline in 2009 compared to 2008, the main Canadian mines remain profitable because of the high quality nature of the diamonds produced from the mines and the high operating profitability of the mining operations. As you can see in the table below, the value of Canadian diamonds has grown over $600 million in the last four years.

All of these factors make Canada the most explosive region of diamond exploration in the world.

DiaMine Explorations Activity

DiaMine Explorations Inc. has been negotiating on several important claims around the world, including claims in key areas of Northern Ontario. We have shifted our diamond exploration focus into another region of the James Bay Lowlands in order to capitalize on the prospects of an attractive new project area. Working with top experts in geology and geophysical analysis, we have already done three rounds of drilling on the property in 2008 and 2009, with chrome diopsides and potential garnets already recovered from the property.

The samples were taken to the True North Mineral Lab in Timmins, Ontario. Diamine has identified at least 6 Chrome Diopsides that are considered Kimberlite Indicator Minerals. This means that the area we have focused on is a highly valued region of Canada with good potential for diamond formation.

The heavy mineral concentrate grains were examined under a binocular microscope. Those grains identified as possible KIMs were set aside, and samples were sent to CF Minerals Ltd. in Kelowna, British Columbia for testing with the Scanning Electron Microscope (S.E.M.) and the microprobe. These instruments determine the chemical composition of the possible KIMs, and decide whether they are in fact KIMs. One KIM, a chrome diopside, was identified from the easternmost drill site mentioned above.

We have also acquired a very interesting gold project in the Red Lake district, The claims area totals 3,760 acres of property and is in close proximity to the red lake gold camp, which is one of the most important gold camps in North America. The Red Lake mining region has produced over twenty two million ounces of gold since 1926 and most recently Goldcorp acquired mining operations in the region for $1.5 billion dollars. The DiaMine properties are adjacent on the Western side of the GoldCorp. Property.

We have applied for listing on a major European stock exchange and we have filed all of the necessary accounting and legal paperwork. After spending the last several years developing diamond exploration projects and expanding our land holdings into a very interesting gold property, the company feels the time is right to explore a properly planned expansion, which requires raising additional capital from alternative sources.

The company has been working very closely with securities lawyers, accountants and European market makers to position the company for listing in Europe to increase the funding potential as it looks to further develop important properties in its portfolio.

The application has been received and is currently being processed and the company expects to get some feedback from the official governing body in the future.

We expect 2010 to be another landmark year at DiaMine Explorations Inc. Our last private placements in the spring and autumn were very successful and the funds were used to develop our existing project and acquire a valuable gold property.

We will be looking at another round of funding in 2010 in order to enter our next stage of development with a more extensive drill program as well as laying the groundwork for developing the property in the Red Lake gold district. We will also be looking at some interesting projects in 2010, as the recent financial crisis has created some interesting opportunities for expansion.

We would like to thank all of our shareholders for the opportunity to position DiaMine Explorations Inc. for a very promising 2010. We look forward to a successful New Year as we continue to develop and implement our strategy of locating the next important diamond discovery along with our expansion into the gold exploration business.

Sincerely,

John Stollery, Chairman

Forward Looking Statements

The above contains forward-looking statements that are subject to a number of known and unknown risks, uncertainties that may cause actual results to differ from anticipated results. Although we deem our expectations to be realistic, results may vary and we cannot guarantee future results.

For additional information please contact DiaMine Explorations Inc., at 866 557 8637 or by fax: 416 847 1526
email: info@diamineexplorations.com Website: www.diamineexplorations.com