Cash Flow and Sources of Financing

For the period ended September 30, 2008, the total liquidity was $2,056,543 compared to $1,538,606 for the period ended December 31, 2007. This financial position is due mainly to new financings of $7,151,394 and investing activities of $4,889,540 including deferred exploration expenses of $2,124,158 and acquisition of mining properties of $1,628,312. During the next quarters, the Company must raise additional funds to finance work in progress and to keep or accelerate its pace of development.

Liquidity Situation

Overview

During the third quarter of 2008, in addition to its administrative matters, the Company continued with the acquisitions of mining properties and exploration work on a number of properties. Overall, $2,139,406 was expended for exploration work and $2,970,662 for acquisitions of mining properties. The majority of the expenditures were allocated to the Leadbetter project ($2.89 million for acquisitions of mining properties and $1.1 million for exploration work).

During the third quarter of 2008, the Company focused on the processing of samples recovered from various properties in Quebec and Ontario, and on the permitting and approvals process for the Leadbetter project, under the Ontario Mining Act for Advanced Exploration projects, to conduct up to 50,000 tonnes sampling program, to obtain a significant parcel of diamonds for valuation.

The Company also focused on investor relation activities to raise additional funds to finance work in progress and to keep or accelerate its pace of development.

Acquisition of Mining Properties

Leadbetter

During the third quarter of 2008, in compliance with the agreement dated March 30, 2007 for the right to acquire an additional ten percent (10%) undivided interest in each of the optioned properties, Dianor made a cash payment of $277,500. By making a cash payment of $277,500 on July 1st, 2008, the Company increased its additional interest to 3.87 % in the properties.

Since January 1st 2008, $2,890,775 was incurred to acquire mining rights on the property.

Killala

Under the terms of property agreement dated September 14, 2005 for the right to acquire a one hundred percent (100%) interest in the diamond property of Killala Lake region, the Company made a cash payment of $10,000 and issued 50,000 common shares (at $0.16 for $8,000) for a total of $18,000.

The total amount paid since the beginning of the year amounted to $61,850.

Carpenter

During the third quarter of 2008, the Company acquired a property located west of Leadbetter’s for $5,559 for the period and $32,602 since the beginning of 2008.

Partial write-off of mining properties

During the third quarter of 2008, the Company wrote-off mining properties. The write-offs calculation was based on the percentage of deferred exploration expenses write-offs for each of the corresponding properties. The amount recorded for the quarter is the property cost multiplied by the percentage obtained.

For the third quarter of 2008, the write-off of mining properties was $103,250 (essentially for Dumas property, $101,663) and $136,044 since the beginning of the year.

Exploration Work

During the third quarter of 2008, the Company focused on the processing of rock and drill core samples recovered from various properties in Quebec and Ontario, and on finalizing permitting and approvals process under the Ontario Mining Act for Advanced Exploration projects in order to recover up to 50,000 tonnes of diamond bearing conglomerate from two underground ramps and obtain a significant parcel of diamonds for valuation. The quarterly exploration expenditures amounted to $841,371 and $3,166,850 since the beginning of the year.

Leadbetter

During the third quarter of 2008, exploration work consisted of planning the bulk sampling program including preparation of technical and hydrogeological drilling. A team of consultants including experts in the environmental, mining engineering and mineral processing fields have over the past 18 months prepared numerous reports and conducted field studies for the permitting for the bulk sampling program and the mine closure plans.

A meeting with Ontario provincial inter-governmental agencies was held on September 26 to review the Leadbetter Project advanced exploration program. This was followed up shortly with public presentations and consultations held on October 16.A similar meeting will be held with the First Nations of the area, a date has yet to be determined.

On September 27, an HQ diamond drilling program was started on the Leadbetter claims to advance the structural definition of the deposit. Up to September 30, 2008, 265.5m of HQ drilling has been completed.

The quartely exploration expenditures amounted to $163,482 and $1,102,564 yearly.

Mori Diamonds

During 2008, drill cores were processed by attrition milling to recover both diamonds and indicator minerals. Selected intervals of drill core were processed in order to confirm surface sample diamond results and obtain an initial appraisal of the diamond potential of the Mori properties. Coloured diamonds were the main type of diamonds recovered. See press release issued on September 18, 2008 for results.

The Company invoiced its joint venture partner for exploration work done during 2008 for $250,354. Dianor’s share for the quarter amounted to $8,720 and $307,730 since the beginning of the year.

Lac Ekomiak

During the third quarter of the year, the exploration work consisted of attrition milling of surface bedrock samples, data compilation and supervision. See press release issued on August 7, 2008 for details about purple and other colored diamonds.

The Company invoiced its joint venture partners for exploration work from 2006 to September 30, 2008 for $777,090. Dianor’s share for the quarter amounted to $151,313 and $14,858 since the beginning of the year.

PEM

During the third quarter of the year, the exploration work consisted of attrition milling of surface bedrock samples. See press release issued on August 7, 2008 for details about purple, pink, yellow and amber diamond discoveries.

A total of $213,772 was incurred during the third quarter and $489,513 since the beginning of the year.

Other properties

During the third quarter of the year, no expenditures were incurred, a total of $29,655 were incurred since the beginning of the year.

Write-off of deferred exploration expenses

During the third quarter of the year, the Company wrote-off deferred exploration expenses for mining duties abandoned or not renewed. The write-off for each of the mining duties corresponded to the works submitted to the Ministry.

For the third quarter of 2008, the write-off of deferred exploration expenses was $277,031 (essentially for Dumas property, $242,944) and $300,183 since the beginning of the year.

Results of Operation

The Company recorded a net loss from continuing operations of $658,967 for the period ended September 30, 2008 ($0.00 per share) compared to a net loss of $326,753 ($0.00 per share) for the same period in 2007. The variation is directly related to interest revenues and others, which increased by $102,190, to convention expenses and investor relations, which increased by $7,619, to professional fees, which increased by $64,799, to salaries and fringe benefits, which increased by $16,782, to the stock-based compensation, which decreased by $10,925, as well as to mining duties, which decreased by $5,773. The variation is also related to write-off of deferred exploration expenses, which increased by $277,031, to write-off of mining properties, which increased by $103,250 and future income and mining taxes, which decreased by $37,612. The share of a net loss of a company subject to significant influence (and non-controlling interest) also increased by $15,580. The other administrative expenses of the Company remained stable, but may fluctuate according to the events, which are not always predictable.