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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-KSB

|(Mark One)                                  |                                                                                         
|------------------------------------------- | ----------------------------------------------------------------------------------------
|ý                                           | ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934          
|For the fiscal year ended December 31, 2002
|OR                                         
|o                                           | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
|For the transition period from
 to         
|                                            |                                                                                         

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DIAMOND DISCOVERIES INTERNATIONAL CORP.(Name of Small Business Issuer)

|Delaware(State or Other Jurisdiction
of Incorporation)                                     |  | 06-1579927(IRS Employer Identification No.)
|------------------------------------------------------------------------------------------ |  | -------------------------------------------
|1010 Sherbrooke St. W.
Suite 2401
Montreal, Quebec(Address of Principal Executive Offices) |  | H3A 2R7(Zip Code)                          
|(514) 842-3343(Issuer's Telephone Number, Including Area Code)                            
|Securities registered under Section 12(b) of the Exchange Act:None                        
|Securities registered under Section 12(g) of the Exchange Act:Common Stock                

|Title of Each Class           |  | Name of Each Exchange
on Which Registered
|----------------------------- |  | -----------------------------------------
|Common Stock, par value $.001 |  | None                                     
|                              |  |                                          

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Check
whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes ý    No o

Check
if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10- KSB or any amendment to this
Form 10-KSB. o

Issuer's
revenues for its most recent fiscal year were: $0.

The
aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was
sold as of April 28, 2003 is $1,772,400.

The
number of shares outstanding of the Company's common stock, as of April 28, 2003 is 22,325,000.

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TABLE OF CONTENTS

|DESCRIPTION OF BUSINESS                                                              |  | 3 
|------------------------------------------------------------------------------------ |  | --
|DESCRIPTION OF PROPERTY                                                              |  | 8 
|LEGAL PROCEEDINGS                                                                    |  | 10
|SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                  |  | 10
|MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS                             |  | 11
|MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION     |  | 12
|INDEX TO FINANCIAL STATEMENTS                                                        |  | 18
|FINANCIAL STATEMENTS                                                                 |  | 18
|CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |  | 28
|DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS                         |  | 29
|EXECUTIVE COMPENSATION                                                               |  | 31
|SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                       |  | 31
|CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                       |  | 32
|EXHIBITS AND REPORTS ON FORM 8-K                                                     |  | 33
|CONTROLS AND PROCEDURES                                                              |  | 33
|SIGNATURES                                                                           |  | 35
|APPENDIX A                                                                           |  | 38

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PART I

This Annual Report on Form 10-KSB and the information incorporated by reference includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended. Various statements, estimates, predictions, and projections
stated under "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business," and elsewhere in this Annual Report are "forward-looking
statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. These statements appear in a number of places in this Annual Report and include
statements regarding the intent, belief or current expectations of Diamond Discoveries International or our officers with respect to, among other things, the ability to successfully implement our
acquisition and exploration strategies, including trends affecting our business, financial condition and results of operations. While these forward-looking statements and the related assumptions are
made in good faith and reflect our current judgment regarding the direction of the related business, actual results will almost always vary, sometimes materially, from any estimates, predictions,
projections, assumptions, or other future performance suggested herein. These statements are based upon a number of assumptions and estimates, which are inherently subject to significant uncertainties
and contingencies, many of which are beyond our control and reflect future business decisions which are subject to change. Some of these assumptions inevitably will not materialize, and unanticipated
events will occur which will affect our results. Some important factors (but not necessarily all factors) that could affect our revenues, growth strategies, future profitability and operating results,
or that otherwise could cause actual results to differ materially from those expressed in or implied by any forward-looking statement, include the following:



Stockholders
and other users of this Annual Report on Form 10-KSB are urged to carefully consider these factors in connection with the forward-looking statements. We
do not intend to publicly release any revisions to any forward-looking statements contained herein to reflect events or circumstances occurring after the date hereof or to reflect the occurrence of
unanticipated events.

Item 1. Description of Business

We were incorporated in the State of Delaware on April 24, 2000. We are a exploration stage company that is engaged in the acquisition and exploration of
mineral properties. Our initial focus is in the area of the Torngat fields located in the province of Quebec, Canada. Other than contracting with a third party to conduct exploration and gather data
on our behalf, we have conducted no operations to date and do not expect to receive any revenues for at least two years. During these two years we plan to concentrate our efforts on exploration and
data gathering. During these two years we will be solely dependent on the availability of external financing to fund our operations. Our independent public accountants expressed substantial doubt
about our ability to continue as a going concern because such continuance is dependent upon our ability to raise capital. If we are unable to secure adequate financing we will be unable to continue
our exploration and data gathering efforts. Because we are an

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exploration stage company, we do not know if a commercially viable mineral deposit exists on any of our properties. Further exploration will be required before the economic and legal feasibility of
developing the properties can be determined.



On September 12, 2000, we entered into an Acquisition Agreement with Messrs. Peter Ferderber and Stanley G. Hawkins, and Tandem
Resources Ltd., a Canadian mineral exploration company of which Mr. Hawkins is the President. Pursuant to such Agreement, we acquired certain mineral exploration permits covering an area
of approximately 469.05 square kilometers in the Torngat fields, which are located on the east coast of Ungava Bay, in the northwestern part of Quebec. The Torngat fields are one of four fields in
Quebec that contain diamondiferous kimberlite formations. The Torngat fields are composed of a central plateau about 400 meters above sea level, and are broken by steep-sided gorges and fjords along
the coast. The largest of these features, Alluviaq Fjord, bisects the property covered by the permits. Several dykes in the area are well exposed sub-vertical features in the Alluviaq
Fjord, and display horizontal and vertical continuity. These traits result from rock being pushed up from below the
surface, into a vertical position against other horizontal rocks. Geologists usually identify these rock formations as strong targets for the presence of diamonds.

The
consideration paid under the Acquisition Agreement was 1,000,000 shares of our common stock to each of Messrs. Ferderber and Hawkins, and the payment of $Cdn35,000 to
Mr. Hawkins and $Cdn25,000 to Mr. Ferderber. We also assigned to Messrs. Ferderber and Hawkins a one per cent (1%) interest in the "Net Smelter Returns" of the property, one half
of which is payable over the first $Cdn50 million in revenues from the property. (Net Smelter Returns are determined by the net amount of money received from the sale of ore, or ore
concentrates or other products from a property to a smelter or other ore buyer.) Once Messrs. Ferderber and Hawkins have received $Cdn10 million from these Net Smelter Returns, their
interest terminates. Tandem Resources Ltd. received an option to purchase 40% of the mineral rights on the properties. This option is conditioned on a number of events occurring, which are:



In
addition, we will have twenty-one (21) days from the date we notify Tandem that we have made the $Cdn5 million exploration expenditure, to negotiate a
financing agreement with Tandem to provide Tandem with the $Cdn2 million required to exercise the option. Should no agreement be reached in such 21-day period, our right to provide
this financing shall expire.

Based
upon an analysis of samples taken from these properties, we believe that the properties for which we have exploration permits contain kimberlite. Kimberlite is a type of igneous
rock that occasionally contains tiny to extremely tiny diamonds, and on very rare occasions contains industrial or gem quality diamonds. Certain samples taken from our properties have contained micro
diamonds.

Prospecting
Geophysics Ltd., a Quebec-based firm of which Mr. Ferderber is President, has provided us with a Progress Report, dated August 29, 2000, which discusses
these samples, which they had collected. Prospecting Geophysics Ltd. has been contracted to conduct further surveys and exploration on this property.

Mr. Ferderber
is the record owner of the property covered by the permits, which he has transferred to us. He had originally executed an agreement, as of June 20, 2000,
transferring the right to explore the properties covered by the permits to us. This June 20, 2000 agreement was subsequently

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incorporated into the Acquisition Agreement discussed above. We have received an opinion of Lavery, de Billy, a firm of barristers and solicitors of Montreal, Canada, dated July 10, 2000, that
Mr. Ferderber is the record owners of the permits under the Mining Act (Quebec), and that the permits are in good standing as of June 21, 2000. The opinion further states that at the
date of examination, there were no liens, charges or encumbrances registered against any of the permits. The opinion disclaimed any physical verification of the location of the properties covered by
the permits, and states that no survey of the area covered by the permits was conducted.

The
permits expire at dates ranging from October 17, 2004 to March 30, 2005. These permits, once expired, may be renewed for an additional five years at an annual license
fee of $Cdn75 per square kilometer.



We intend, in conjunction with Messrs. Ferderber and Hawkins (and their affiliated entities) to explore the properties from early-stage exploration through
completion of the exploration phase. Prospecting Geophysics Ltd. will perform all exploration activities. We will be paying, pursuant to an agreement with Prospecting Geophysics Ltd., an
hourly rate to Mr. Ferderber and his staff for their services, as well as reimbursement for expenses, including equipment, transportation, lodging and meals.

Prospecting
Geophysics Ltd. will commission crews of workers who will gather samples of rock from the properties, and transport the samples to a facility where they can be tested
from properties which tend to indicate the presence of diamonds. We have established camp sites for the workers at the location of the properties, in order to decrease the costs of lodging. In
addition, we plan to use commercial supply boats, rather than commissioning private boats, to transport the rock samples. Because the properties are only accessible by air, we plan to rent helicopters
as well as fixed wing aircraft known as "beavers" to transport workers and samples to and from the properties.

Due
to extremely cold temperatures and snow accumulation caused by the inclement weather in the region during the period from, approximately, November to March, there can be no
exploration on the properties covered by the permits during these months.

Prospecting
Geophysics Ltd. also identifies specific exploration targets in kimberlite dykes by examining maps of the area, and by using an airborne magnetometer. From the air,
this magnetometer detects magnetic properties in the rock below. The data so gathered can be analyzed and used to focus the gathering process on areas of higher magnetism. Some underground sites can
be located using certain geochemistry tests.

Thus
far we have begun early stage exploration activities, and have gathered samples from one property for analysis. An exploration team of eight men gathered samples and data at this
property. The samples are taken from dykes or "pipes" containing kimberlite. These samples were analyzed by Lakefield Research Limited, of Ontario, an independent laboratory, which uses caustic
dissolution to extract the diamonds from the samples. This laboratory issued reports dated September 26 and September 27, 2000, on two samples, one of which indicates that out of a 24.65
kilogram sample, two diamonds were found weighing 0.015 carats in the aggregate. The second sample of 30.22 kilograms yielded eight diamonds, with a total weight of 0.001 carats.

During
the second phase of our exploration stage, we, through Prospecting Geophysics Ltd., plan to find the extent of the kimberlite dykes that were located in phase one, and to
gather larger mini-bulk and bulk samples. These next samples are expected to be up to 7,000 pounds. This should enable the Company to test for larger, and potentially more marketable
diamonds which may, or may not, exist in the kimberlite dykes. There is, of course, a substantial risk that we will not find such diamonds. Prospecting Geophysics Ltd. will, at the same time,
be attempting to locate additional

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kimberlite dykes and pipes, and sample them as well. The second stage exploration tasks began in April of 2001, after the weather in northwestern Quebec allowed for exploration activities.

In
2002, we acquired permits for an additional 50,000 acres adjacent to the property where we already have permits located in the Torngat mountain region of Quebec. We acquired the
permits by staking the property and paying the requisite fees to the Quebec Department of Natural Resources. In addition to paying the fees, we must perform a certain amount of assessment work on each
claim to keep them in good standing. We have successfully completed all assessment work related to this property. During our exploration for the 2002 season, we continued to take large rock bulk
samples from property included in the original 469.05 square kilometers. In addition, we began to focus our efforts on the property included in the newly acquired 50,000 acres. We have been successful
in locating four new kimberlite dyke systems that contain 27 new dykes, most of which have been sampled. We are awaiting the test results from independent laboratories. Reduced samples from the
original field samples were subject to micro-probed analysis and found to contain typical kimberlite minerals, phologopite and olivine and the important indicator minerals chrome diopside, pyrope
garnet, picro-ilmenite and chromite. One 110 pound sample containing an olivine xenolith was found to contain a large population of indicator minerals including 243 G9 garnets, 65 chrome diopsides,
and 143 spinels. This mineral assemblage is similar to the Arx Dyke which is located on our permit property that contained the nine micro and one macro diamonds. Phase two was suspended due to
inclement weather during the winter months of 2002 and is expected to resume in June 2003.

Prior
to any decision to develop the properties, a diamond deposit must be assessed to determine the total tonnage of diamond bearing material, the average grade of the rock, the
estimated size distribution of the diamonds in the deposit, and the average value, per carat, of the diamonds. Gathering this data usually takes, as noted above, at least two years. At that time, we
will decide whether, and, if so, how, to proceed. We may seek either a joint venture partner or a senior partner that will undertake the exploration of the properties. It must be noted that there is a
substantial risk
that no commercially viable diamond deposit will be found, and if that is the case, we are likely to have difficulty finding any partners to undertake further exploration.

Additionally,
on March 27, 2001, the Gem Trade Laboratory of the Gemological Institute of America ("G.I.A."), an independent laboratory, issued a report in which they analyzed
"random samples" of numerous transparent pink crystal fragments that were obtained from the property covered by our permits known as D.D.I #1 (See map at Appendix A on page 38 of this
Annual Report) in October 2000, by our agent Prospecting Geophysics Ltd. These samples were taken from property located in the original 469.05 square kilometers in the Torngat mountain
region. The conclusion of the report was that the samples that ranged in size from approximately 0.40 to 0.70 MM consisted of natural corundum. Corundum is the hardest mineral after diamond. The
samples obtained from the property covered by our permit were transparent pink suggesting that they consist of the "ruby" gem. A ruby is a red variety of the mineral corundum. We expect to continue to
collect additional samples of this mineral during the 2002 exploration season.

At
the present time, we do not hold any interest in a mineral property that is in production. Our viability and potential success lie in our ability to successfully explore, exploit and
generate revenue from our properties. There can be no assurance that such revenues will be obtained. The exploration of mineral deposits involves significant risks over a long period of time, which
even a combination of careful evaluations, experience and knowledge may not eliminate. It is impossible to ensure that the current or proposed exploration programs on the exploration permits will be
profitable or successful. Our inability to locate a viable diamond deposit on our properties could result in a total loss of our business. We believe that the typical cost to locate a diamond deposit
can range from $US 5-10 million.

Our
exploration operations are subject to all of the hazards and risks normally incident to exploration of this type, any of which could result to damage to life or property,
environmental

6

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damage, and possible legal liability for any or all damages. Our activities may be subject to prolonged disruptions due to weather conditions surrounding the location of properties over which we have
permits. Difficulties, such as an unusual or unexpected rock formation encountered by workers but not indicated on a map, or other conditions may be encountered in the gathering of samples and data,
and could delay our exploration program. While we may obtain insurance against certain risks in such amounts as we deem adequate, the nature of these risks are such that liabilities could exceed
policy limits or be excluded from coverage. We do not currently carry insurance to protect against these risks and there is no assurance that we will obtain such insurance in the future. There are
also risks against which we cannot, or may not elect to, insure. The potential costs which could be associated with any liabilities not covered by insurance or in excess of insurance coverage or
compliance with applicable laws and regulations may cause substantial delays and require significant capital outlays, adversely affecting our final position, future earnings, and/or competitive
position.



Our operations require licenses and permits from various governmental authorities. We believe that we presently hold all necessary licenses and permits required
to carry on with our intended activities under applicable laws and regulations, and we believe that we are complying at the present time in all material respects with the terms of such licenses and
permits. However, our licenses and permits are subject to changes in regulations and in various operating circumstances. We may not be able to obtain all necessary licenses and permits required to
carry out exploration activities.

We
are currently subject to the environmental regulations set forth under the Environmental Act (Quebec), the Mining Act (Quebec) and the Forest Act (Quebec). We believe that we are in
compliance with all of these acts, and moreover, we believe that the environmental impact of our exploration activities will be minimal. To the extent that we remove large amounts of rock or soil from
the properties, we will likely have to replace such rock or soil, and remediate any environmental disruption caused by our activities. It is impossible to assess with any certainty the cost of such
replacement or remediation activities, or the potential liability that we would face if we were to be found to have violated one, or more, of these Acts.



We do not have any full time employees at the present time. We have two part time employees, Mr. Teodosio V. Pangia, and Mr. Thomas Franzone, both
of whom are executive officers. We have entered into a prospecting and survey agreement with Prospecting Geophysics Ltd. to act as an on-site project manager; they have four full
time employees, and contract with other personnel on an as-needed basis.



The mineral exploration business is competitive in all of its phases. We expect to compete with numerous other exploration companies and individuals, including
competitors with greater financial, technical and other resources than us, for the resources required for exploration. The greater resources of other entities will likely position these competitors to
conduct exploration within a shorter time frame than we can, giving them a market advantage.



We also have exposure to currency fluctuations, since our properties are located in Canada, and thus our transactions are largely in Canadian dollars. Such
fluctuations can materially affect our financial position and other results of operations. References to the "dollar" or "$US" in this Registration Statement are to United States Dollars, and
"Canadian" or "$Cdn" refers to Canadian

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dollars. Unless otherwise stated, the translations of $US to $Cdn and vice versa have been made at the average rate for the year indicated. The following table sets forth the high and low exchange
rate of the Canadian dollar per US dollar as of the latest praticable date and for each of the last six months:

Period

High

LowApril 11, 2003

1.4924

1.4430
(1)March 2003

1.4950

1.4605February, 2003

1.5329

1.4832January 2003

1.5777

1.5176December 2002

1.5801

1.5457November 2002

1.5917

1.5528October 2002

1.5990

1.5555


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Item 2. Description of Property

Please refer to Appendix A to this Annual Report at page 38, which contains a map of our permit locations.

The
Company recently entered into a sublease for office space beginning March 10, 2003 and terminating on August 31, 2003. Under the terms of the sublease, the Company pays
approximately $Cdn700 per month. In the event the main lease is not terminated by the sublessor, the sublease may be extended from September 1, 2003 to August 31, 2005 at a rate of
approximately $Cdn760 per month.

We
do not own real property, nor do we hold any other real property interest other than the exploration permits which we discuss above under the caption "Description of Business." As
noted above, we have engaged Prospecting Geophysics Ltd. as our on-site project manager for our exploration activities.

In
compliance with Guide 7 of Industry Guides under the Securities Act of 1933 and the Securities Exchange Act of 1934, the following information is provided, since we are engaged or to
be engaged in significant mining operations:

(1)  The
permits were acquired in the Acquisition Agreement cover 469.05 square kilometers of properties in northwest Quebec, Canada, on the eastern shore of Ungava Bay. With
the exception of the five (5) month period from November to March in which there is inclement weather in the area surrounding the properties, there is nothing preventing access to the
properties. However, hazardous weather conditions could prevent us from accessing the properties in other months as well. The properties are only accessible by air via a helicopter or by boat. There
are no roads that permit direct access to the properties.

(2)  Pursuant
to an agreement between us and Peter Ferderber, Peter Ferderber has transferred to us six (6) permits for the properties. The properties covered by the
permits are indicated on the map presented in Appendix A by the areas marked D.D.I. Further, pursuant to the Acquisition Agreement, in consideration for the permits, we have issued 1,000,000
shares of our common stock to Mr. Ferderber and have paid him $25,000 Canadian, and at Mr. Ferderber's request, $35,000 Canadian to Stanley G. Hawkins. We have obtained the opinion of
Lavery, de Billy, Barristers and Solicitors of Montreal, Canada dated July 10, 2000, that Mr. Ferderber was the record owner of the permits under the Mining Act of Quebec and that the
permits were in good standing as of June 21, 2000.

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(3)  To
our knowledge, Messrs. Ferderber and Hawkins staked the 469.05 square kilometer property in the Torngat fields in northwest Quebec, Canada, on the eastern
shore of Ungava Bay in 1999, and there were no previous owners, operators, or operations on the property.

(4)  Although
there can be no assurance of successful diamond development, initial progress reports of the property have indicated that there are micro diamonds on the
property. A 24.65 kilogram sample taken from the property, has yielded two diamonds weighing 0.015 carats and a 30.22 kilogram sample has yielded eight diamonds weighing 0.001 carats.



The Torngat Property, where the properties for which we have mineral permits are located, lies within the Torngat mountain province. The crust in the province is
thickened because two continental plates were pushed, more than a billion years ago, one on top of the other. The predominant rock type on the properties are the Tasiuyak Gneiss, a northwest trending
belt of gneisses rock. The gneisses are considered to be altered sedimentary rocks.

The
rocks of the Torngat mountain province strike northwest-southeast within the Torngat property. Cross-cutting the gneisses, there are a number of kimberlite dykes. The individual
dykes are dark green and generally coarse grained across most of their width.

The
properties are in a location over an early Precambrian bedrock segment which is bedrock dating back to the earliest era of geological history, called an "Archon." An Archon is an
immobile segment of the earth's crust exceeding 1.5 billion years in age. Kimberlite, a form of igneous rock, is widely regarded as the main source for diamonds, and is reported from postulated
Archon called the "Baltic Shield." Only in the past decade have diamond explorers recognized that these Baltic Shield rocks are potentially viable for diamonds.

The Property is Without Known Reserves and our Proposed Program is Exploratory in Nature.Exploration for diamonds on the
properties began because the formation and layout of the rocks on the properties indicated that some of the rocks had been pushed up through the earth's crust. This is initially identified by
geologists from the age and shape of the rocks. When these different or unexpected rock formations appear, geologist then consider the area surrounding these rocks as strong targets for exploration
for diamonds. This is because, geologists believe, as the rocks are pushing up through the earth's surface from great depths, the rocks travel through diamond fields located below the earth's surface
and therefore rocks containing diamonds are forced to the surface.

Rocks
containing these characteristics were identified on the properties covered by our mineral permits. Once these rocks were identified, we then conducted a magnetometer survey. The
magnetometer is a small electronic device used by geologists to survey the land for areas of high magnetism. This can be used in the air or on the ground. This test is conducted because, when the
rocks are being pushed through the earth's surface (as described above), in addition to bringing rocks containing diamonds, iron from below the Earth's surface is also forced to the surface. The
magnetometer reads the surface of the Earth for any magnetism created by the iron upon the belief that if a particular property contains a high concentration of iron that was forced up from below the
earth's surface; the property may also contain diamonds that have been similarly forced up to the surface.

An
airborne magnetometer survey was conducted over the properties for which we have mineral permits, and six (6) magnetic dykes were discovered. This indicated to us that these
properties were potentially a source for diamonds. In addition, samples of rock taken from the properties have yielded small diamonds.

We
have hired Prospecting Geophysics Ltd. to conduct these exploration procedures. Mr. Peter Ferderber is the President of Prospecting Geophysics Ltd.
Mr. Ferderber has over forty years of

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experience in mining exploration. Prospecting Geophysics Ltd. plans to conduct the exploration of the property which is expected to last for the next two years. The first phase involved
identifying areas on the property from which to take samples and gathering small samples from the properties for analysis. This analysis to date has demonstrated the presence of 10 micro diamonds in
two samples taken. The second phase involves determining the extent of any kimberlite dykes that were located in phase one and to gather mini-bulk and bulk samples. This will enable us to
determine if there are larger and more marketable diamonds on the properties. The second phase began in April of 2001. Phase two was suspended due to inclement weather during the winter months and it
is expected to resume operations in April 2002. The following is a breakdown of the estimated budget for particular aspects of our exploration activities:

Prospecting and geological mapping

$
190,000Helicopter support


225,000Lodging and food


110,000Airplane support


100,000Mobilization and Demobilization


60,000Fuel for helicopter, airplane and camps


40,000Fuel transport by boat


8,000Pick-up truck rental


15,000Testing samples for Diamonds


150,000Property Taxes (Quebec Dept. of Natural Resources)


60,000Supervision


60,000Total

$
1,018,000


(5)  In
the Quebec sector of the Torngat belt, roughly fifteen dykes have been mapped. These dykes occupy fractures oriented at an approximately right angle to the country
rocks, suggesting tensions opened up by later scale folding. Two of these dykes on an adjacent property have been sampled, confirming the presence of diamonds. However, to date, no proven reserves
have been established and there can be no assurance that any such reserves will ever exist.

Item 3. Legal Proceedings

There are no legal proceedings pending or threatened against us.

Item 4. Submission of Matters to a Vote of Security Holders

During the fourth quarter of calendar year 2002, no matters were submitted to a vote of the security holders of the Company.

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PART II.

Item 5. Market for Common Equity and Related Stockholder Matters.

As of July 18, 2002 prices for the Common Stock were quoted on the Over the Counter Bulletin Board operated by the National Association of Securities
Dealers, Inc. under the symbol DMDD. The following table sets forth the high and low closing bid prices of the Company's Common Stock for the periods indicated as reported by the NASD. These
quotations reflect inter-dealer prices without retail markup, markdown or commissions and may not necessarily represent actual transactions.

|                 |                                     | High |       | Low
|---------------- | ----------------------------------- | ---- | ----- | ---
|Fiscal Year 2002 |                                     |      |       |    
|                 | Third Quarter                       |      | 1.500 |    
|                 | Fourth quarter                      |      | 0.600 |    
|Fiscal Year 2003 |                                     |      |       |    
|                 | First Quarter                       |      | 0.370 |    
|                 | Second Quarter as of April 28, 2003 |      | 0.330 |    

Of
the 22,325,000 shares of our common stock issued and outstanding as of April 28, 2003, 18,685,000 shares of our common stock are currently considered "restricted securities"
and in the future, may be sold only in compliance with Rule 144 or in an exempt transaction under the Act unless registered under the Act.

As
of April 15, 2003 the number of holders of record of our common stock was approximately 62.

We
do not anticipate paying any cash dividends on our common stock in the foreseeable future because we intend to retain our earnings to finance the expansion of our business.
Thereafter, the declaration of dividends will be determined by the Board of Directors in light of conditions then existing, including, without limitation, our financial condition, capital requirements
and business condition. We are prohibited from paying cash dividends on the common stock until any issued and outstanding preferred stock is converted into common stock. However, there were no shares
of preferred stock outstanding as of December 31, 2002.

Recent Sales of Unregistered Securities

On May 1, 2000, the Company sold 4,850,000 shares of its common stock for $.001 per share to the following persons in the amount indicated opposite each
person's name:

TVP Capital Corp.

3,475,000Tom Franzone

275,000Vasilik Kalantzakos

100,000Tunku Mudzaffar Bin Tunku Mustapha

250,000Romeo Dibatista Sr.

250,000JJAB, LLC

500,000


These
shares were sold pursuant to Section 4(2) of the Act and were not issued in connection with any public offering. Teodosio V. Pangia is the sole shareholder of TVP Capital
Corp. Tom Franzone is our Secretary and principal accounting officer. We issued 150,000 shares of common stock to Bondy & Schloss LLP, as payment for legal services valued at $3,750.
Bondy & Schloss LLP was legal counsel to the Company.

On
May 20, 2000, pursuant to a private offering, we issued 10,000,000 shares of our common stock to Mr. Louis Lilling for $250,000. Mr. Lilling paid $25,000 of the
purchase price of these shares in cash

11

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and the remainder in the form of a promissory note payable by November 20, 2000. These shares were issued pursuant to Rule 504 of Regulation D of the Securities Act and were not
issued in connection with any public offering. There were no underwriting commissions in connection with the private offering. The promissory note was extended for six months until May 20,
2001. Mr. Lilling has paid the full amount of the outstanding principal and interest on the promissory note.

Pursuant
to the Acquisition Agreement dated September 12, 2000, we issued 1,000,000 shares of our common stock to each of Messrs. Ferderber and Hawkins in consideration for
the acquisition of the exploration permits referred to in "Description of Business," above. These shares were issued pursuant to Section 4(2) of the Act and were not issued in connection with
any public offering.

On
February 14, 2002, our Registration Statement on Form SB-2, as amended, (File No. 333-71962) was declared effective by the SEC. We registered
1,835,000 shares of common stock, par value $.001 per share, solely on behalf of selling shareholders and thus we did not receive any proceeds from the sale of common stock offered through the
Registration Statement. Until such time as our shares are traded on a market or securities exchange, the selling shareholders for whom shares were registered on the Registration Statement must offer
or sell our common stock at a price of $.90 per share. Once traded on a market or securities exchange the offering price of our common stock will be determined by market factors. The offering will
conclude when all of the 1,835,000 shares of common stock have been sold, the shares no longer need to be registered to be sold or we decide to terminate the registration of the shares.

During
the year ended December 31, 2002, the Company received total cash consideration of $734,959 as a result of the sale of 1,633,242 units of common stock and warrants to
purchase common stock at $.45 per unit through private placements intended to be exempt from registration under the Act. Each unit consisted of one share of common stock and one warrant to purchase
one share of common stock exercisable at $.75 per share for a two year period from the date of purchase. All of the warrants remained outstanding as of December 31, 2002. The Company had also
received subscriptions through the private placements for the purchase of 51,758 units at $.45 per unit or a total of $23,291 as of December 31, 2002. The notes receivable from the subscribers
are noninterest bearing and due six months from the respective dates of sale.

Item 6. Management's Discussion and Analysis of Financial Condition or Plan of Operation

The following discussion and analysis should be read in conjunction with the consolidated financial statements and notes thereto included
elsewhere in this Annual Report on Form 10-KSB.The following discussion regarding us and our business and operations contains forward-looking statements.
Such statements consist of any statement other than a recitation of historical fact, and can be identified by the use of such forward-looking terminology such as "may," "expect," "anticipate,"
"estimate" or "continue" or the negative thereof or other variations thereon, or comparable terminology. The reader is cautioned that all forward-looking statements are necessarily speculative, and
there are certain risks and uncertainties that could cause actual events or results to differ materially from those referred to in such forward-looking statements.



We were incorporated in the State of Delaware in April of 2000, and do not have any significant operating history or financial results. We have begun our early
stage exploration activities, including gathering samples from one of the properties for analysis, building an infrastructure and filing Registration statements on Forms 10-SB and
SB-2 as well as periodic filings with the Securities and Exchange Commission.

12

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In connection with their audit report on our financial statements as of December 31, 2002, J.H. Cohn LLP, our independent public accountants, expressed
substantial doubt about our ability to continue as a going concern because such continuance is dependent upon our ability to raise capital.

We
have explored, and continue to explore, all avenues possible to raise the funds required. We have no revenue-producing activity. We cannot continue our exploration efforts until we
have raised sufficient capital. We also need capital to fund overhead and administrative costs. For the fiscal years ended December 31, 2002 and 2001 and the period from April 24, 2000
(date of inception) to December 31, 2002 we incurred $511,752, $828,229 and $1,938,513 in exploration costs and $365,986, $192,961 and $674,031 in general and administrative expenses,
respectively. General and administrative expenses consisted primarily of professional fees related to our corporate filings and consulting and other expenses incurred in operating our business. We
incurred a net loss of approximately $878,000 or $(.05) per share based on 18,001,044 weighted average shares outstanding for the fiscal year ended
December 31, 2002 compared to a loss of approximately $1,021,000 or $(.06) per share based on 15,795,418 weighted average shares outstanding for the fiscal year ended December 31, 2001.
We did not conduct any operations of a commercial nature during the period from April 24, 2000 to December 31, 2002.

Ultimately,
we must achieve profitable operations if we are to be a viable entity. Although we believe that there is a reasonable basis to believe that we will successfully raise the
needed funds to continue exploration, we cannot assure you that we will be able to raise sufficient capital to continue exploration, or that if such funds are raised, that exploration will result in a
finding of commercially exploitable reserves, or that if exploitable reserves exist on our properties, that extraction activities can be conducted at a profit.

Cash Flow and Capital Resources

Through December 31, 2002 we have relied on advances of approximately $586,000 from our principal stockholders, trade payables of approximately $986,000
(including $886,076 owed to Prospecting Geophysics Ltd.), and proceeds of $989,809 from the sale of common stock to support our limited operations. As of December 31, 2002, we had
approximately $3,300 of cash.

We
plan to seek additional equity or debt financing of up to $1,000,000 which we plan to use for the next phase of our exploration program to be conducted through December 31,
2003, as well as working capital purposes. We currently have limited sources of capital, including the public and private placement of equity securities and the possibility of issuance of debt
securities to our stockholders. With virtually no assets, the availability of funds from traditional sources of debt will be limited, and will almost certainly involve pledges of assets or guarantees
by officers, directors and stockholders. Stockholders have advanced funds to us in the past, but we cannot assure you that they will be a source of funds in the future. If we do not get sufficient
financing, we may not be able to continue as a going concern and we may have to curtail or terminate our operations and liquidate our business (see Note 1 to financial statements).

Plan of Operation

Our business plan for the next year will consist of further exploration on the properties over which we hold the mineral exploration permits as well as
preliminary marketing efforts. We intend to continue retaining Prospecting Geophysics Ltd. to analyze the results of phase one of our exploration program, and during phase two, to find the
extent of the kimberlite dykes that were located in phase one and gather larger mini-bulk and bulk samples. These next samples are expected to be up to 7,000 lbs. Prospecting
Geophysics, Ltd. will attempt to locate additional kimberlite dykes and pipes and sample them as well. They will attempt to conduct further geochemistry tests to locate underground dykes

13

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which are not visible at the surface and magnetic surveys to trace them. Additionally, during phase two, we intend to continue to collect and analyze the transparent pink crystal fragments found on
the properties covered by our permits that consists of natural corundum and which we believe contain rubies. This phase was suspended during the winter months due to inclement weather. This phase is
expected to resume in June 2003.

After
consulting with Prospecting Geophysics Ltd., we estimate that it will require approximately $1,000,000 to conduct our exploration program through December 31, 2003.
This amount will be used to pay for prospecting and geological mapping, helicopter and airplane support, lodging and food for workers, pick-up truck rentals, house rental in George River,
assays, property taxes to the Quebec Department of Natural Resources and supervision, including a salary payable to Mr. Peter Ferderber of $500 per day, plus out of pocket expenses, for days he
attends the site. We plan to raise a minimum of $1,000,000 through one or more private offerings pursuant to Rule 506 or Regulation D of through an offshore offering pursuant to
Regulation S; however, nothing in this annual report shall constitute an offer of any securities for sale. Such shares when sold will not have been registered under the Act and may not be
offered or sold in the United States absent registration or an applicable exemption from registration requirements. If we are unable to raise this amount, we will most likely cease all activity
related to our exploration program, or at the very least, proceed on a reduced scale. We have to date relied on a small number of investors to provide us with financing for the commencement of our
exploration program, including TVP Capital Corp., a principal stockholder. Amounts owed to these individuals are payable upon demand.

We
do not expect to make any direct expenditure to purchase any equipment as all equipment necessary will be provided by Prospecting Geophysics Ltd. pursuant to the Prospecting
and Survey Agreement dated November 14, 2000. However, we will reimburse Prospecting Geophysics, Ltd. for all of it's out of pocket expenses including equipment rental.

We
now employ two individuals on a part time basis, both of whom are executive officers. We do not expect any significant changes in the number of employees within the next twelve
months.

Risk Factors



We have no history running our mineral exploration business.

We are engaged in the exploration stage of our business. We have not engaged in any substantive business operations to date. More particularly, we have not
engaged in any mining operations. We have only engaged in exploratory activities, feasibility studies and the establishment of initial exploration plans. Thus, we have no way to evaluate the
likelihood that we will be able to operate our business successfully. You should consider our business future based on the risks associated with our early stage, and lack of experience.

We expect to face many of the typical challenges of a startup business.

A startup business like ours faces a number of challenges. For example, engaging the services of qualified support personnel and related consultants and other
experts is very important in the mineral exploration business, and there is keen competition for the services of these experts, consultants, and support personnel. Equally important in the mineral
exploration business is establishing initial exploration plans for mining prospects, and analyzing relevant information efficiently. Establishing and maintaining budgets and appropriate financial
controls is also very important to a startup business. We expect to incur substantial operating losses for the foreseeable future, as well. The failure to address one or more of these activities, or
curb operating losses, may impair our ability to carry out our business plan.

14

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Mineral exploration has many inherent risks of operations which may prevent ultimate success.

Mineral exploration has significant risks. Mineral exploration companies (like us) are dependent on locating mineral reserves on the properties over which it has
mineral permits, and are also dependent on the skillful management of minerals, when and if found or located on these properties. These minerals, when found in deposits and mineralizations, can vary
substantially in a prospect, rendering what was initially believed to be a profitable deposit into one of little or no value. Unforeseen changes in regulations, the value of minerals, environmental
regulations, mining technology, site conditions, and/or labor conditions can all have a negative impact on our operations, and each may impair our ability to carry out our business plan.

Our business future is dependent on finding mineral deposits with sufficient mineralization and grade.

Our
business model depends on locating prospects with a sufficient amount of mineralization to justify surface and drilling sampling. No assurance can be given that our specific
exploration target areas will be valuable in locating mineralizations. Even if initial mineralization reports are positive, subsequent activities may determine that deposits are not commercially
viable. Thus, at any stage in the exploration process, we may determine that there is no business reason to continue and, at that time, our resources may not enable us to continue exploratory
operations and will cause us to terminate our business.

We have no known mineral reserves, and if we cannot find any, we will have to cease operations.

We
have no mineral reserves. If we do not find a mineral reserve containing diamonds, or if we cannot develop any diamond-bearing mineral reserve, either because we do not have the money
to effect such a development, or because it will not be economically feasible to do it, we will have to cease operations, and you may lose your entire investment.

We are relying on geological reports to locate potential mineral deposits, which may be inaccurate.

We
rely on geological reports to determine which of the properties, for which we have mineral permits, to explore. There is no sure method of verifying the care and manner used to
prepare these reports without further verification on our part, or on our agents' part. Verification of reports is expected to be costly, and may take a considerable period of time. Verification could
result in our rejecting a potential mineral prospect; however, we will have borne the expense of this verification with no likelihood of recovering the amounts expended. Decisions made without
adequately checking the mining prospects could result in significant unrecoverable expenses. Mineral deposits initially thought to be valuable may, in fact, turn out to be of little value. Therefore,
it is possible that investment funds will have been used, with no value having been achieved from the operations based on the reports.

Regulatory compliance in the mineral exploration business is complex, and the failure to meet all of the various requirements could result in fines, or other
limitations on the proposed business.

Our
mineral exploration activities will be subject to regulation by numerous governmental authorities. We are subject to environmental regulations under the Environmental Act (Quebec),
the Mining Act (Quebec), and the Forest Act (Quebec). The failure to comply fully with these or any other governmental regulations will adversely affect our ability to explore for economic
mineralization, and our subsequent business stages. The failure to comply with any regulations or licenses may result in fines or other penalties. We expect compliance with these regulations to be
substantial. Therefore, compliance with (or, conversely, the failure to so comply with) applicable regulations will affect our ability to succeed in our business plans and to generate revenues and
profits.

15

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Mineral exploration is a hazardous business, which entails risks for liability and/or damages.

The
search for valuable minerals involves numerous hazards. As a result, we may become subject to liability for such hazards, including pollution, cave-ins and other hazards
against which we cannot insure against, or against which we may not elect to insure. We do not currently carry any insurance to protect against the potential liability of such hazards. The payment of
any liabilities attributed to us may have a material adverse effect on our financial position and may cause us to cease operations.

We face intense competition, and our competitors may have greater resources that we do and be better able to locate and explore mineral resources in a quicker and
more cost efficient manner than we can.

It
is our belief that there are a significant number of companies with greater resources than those available to us, to locate and explore mineral resources. These companies may be able
to reach production stages sooner than we can, and obtain a share of the market for mineral products before we can.

Because our management has only limited experience in mineral exploration, we have a higher risk of failure.

Our
management has only limited experience in mineral exploration. As a result of this limited experience, there is a higher risk of our being unable to complete our business plan in the
exploration of our mineral property.



We do not currently have sufficient capital to engage in exploration activities.

The
cost of our planned exploration activities is approximately $1,000,000 to $1,200,000. As of the date of this filing, we do not have sufficient capital to engage in exploration
activities, and no sources for financing. The extent to which we will be able to implement our exploration for minerals will be determined by our ability to engage in offerings of equity securities
and/or debt securities. Without additional capital, we will have to either curtail our business plan, or abandon it altogether.

We do not have any identified sources of additional capital, the absence of which may prevent us from continuing our operations.

We
do not, presently, have any arrangements with any investment banking firms or institutional lenders. Because we will need additional capital, we will have to expend significant effort
to raise operating funds. These efforts may not be successful. If not, we will have to either curtail our business plan, or abandon it altogether.



Our officers and directors will devote approximately one-third of their time to our operations.

Our
officers and directors have other interests. Because of these other interests, each will be devoting only one-third of their time to our operations, which could have a
negative impact on the efficiency of our operations.

Our directors and officers will have substantial ability to control our business direction.

Because
our directors and officers own, directly and indirectly, 51.18% of our common stock, they are in a position to control, or, at the least, influence the election of our directors.
Therefore, they are able to influence our business operation.

16

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Critical Accounting Policies and Estimates

Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these
financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and
liabilities. On an on-going basis, we evaluate our estimates. We base our estimates on historical experience and on other assumptions that are believed to be reasonable under the circumstances.
Accordingly, actual results could differ from these estimates under different assumptions or conditions. This section summarizes the critical accounting policies and the related judgments involved in
their application.

Valuation of Deferred Tax Assets

We regularly evaluate our ability to recover the reported amount of our deferred income taxes considering several factors, including our estimate of the
likelihood that we will generate sufficient taxable income in future years in which temporary differences reverse. Due to the uncertainties related to, among other things, the extent and time of
future taxable income and the potential changes in the ownership of the Company, which could subject our net operating loss carryforwards to substantial annual limitations, we offset our net deferred
tax assets by an equivalent valuation allowance as of December 31, 2002.

Valuation of Long-Lived Assets

We assess the recoverability of long-lived assets, such as mining claims, whenever we determine that events or changes in circumstances indicate that their
carrying amount may not be recoverable. Our assessment is primarily based upon our estimate of future cash flows associated with these assets. If at some point in the future, we estimate that the
undiscounted cash flows is less than the carrying value of the assets, this determination could result in non-cash charges to income that could materially affect our financial position or results of
operations for that period.

FORWARD LOOKING STATEMENTS

This Form 10-KSB contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All
statements included herein that address activities, events or developments that the Company expects, believes, estimates, plans, intends, projects or anticipates will or may occur in the future, are
forward-looking statements. Actual events may differ materially from those anticipated in the forward- looking statements. Important risks that may cause such a difference include: general domestic
and international economic business conditions, increased competition in the Company's markets and products. Other factors may include, availability and terms of capital, and/or increases in operating
and supply costs. Market acceptance of existing and new products, rapid technological changes, availability of qualified personnel also could be factors. Changes in the Company's business strategies
and development plans and changes in government regulation could adversely affect the Company. Although the Company believes that the assumptions underlying the forward- looking statements contained
herein are reasonable, any of the assumptions could be inaccurate. There can be no assurance that the forward-looking statements included in this filing will prove to be accurate. In light of the
significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company that the objectives
and expectations of the Company would be achieved.

17

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Item 7. Financial Statements

DIAMOND DISCOVERIES INTERNATIONAL CORP.
(An Exploration Stage Company)

INDEX TO FINANCIAL STATEMENTS

|                                                                                                                                                                 |  | Page 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----
|Report of Independent Public Accountants                                                                                                                         |  | 19   
|Balance Sheet
December 31, 2002                                                                                                                                  |  | 20   
|Statements of Operations
Years Ended December 31, 2002 and 2001 and Period from April 24,
2000 (Date of Inception) to December 31, 2002                          |  | 21   
|Statements of Changes in Stockholders' Deficiency
Years Ended December 31, 2002 and 2001 and Period from April 24,
2000 (Date of Inception) to December 31, 2002 |  | 22   
|Statements of Cash Flows
Years Ended December 31, 2002 and 2001 and Period from April 24,
2000 (Date of Inception) to December 31, 2002                          |  | 23   
|Notes to Financial Statements                                                                                                                                    |  | 24-28

18

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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To
the Board of Directors and Stockholders
Diamond Discoveries International Corp.

We
have audited the accompanying balance sheet of DIAMOND DISCOVERIES INTERNATIONAL CORP. (An Exploration Stage Company) as of December 31, 2002, and the related statements of
operations, changes in stockholders' deficiency and cash flows for the years ended December 31, 2002 and 2001 and the period from April 24, 2000 (date of inception) to
December 31, 2002. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We
conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In
our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Diamond Discoveries International Corp. as of
December 31, 2002, and its results of operations and cash flows for the years ended December 31, 2002 and 2001 and the period from April 24, 2000 (date of inception) to
December 31, 2002, in conformity with accounting principles generally accepted in the United States of America.

The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As further discussed in Note 1 to the financial statements,
the Company had not generated any revenues from its operations and it had working capital and stockholders' deficiencies as of December 31, 2002. Such matters raise substantial doubt about the
Company's ability to continue as
a going concern. Management's plans concerning these matters are also described in Note 1. The accompanying financial statements do not include any adjustments that might result from the
outcome of these uncertainties.





Roseland,
New Jersey
April 11, 2003

19

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DIAMOND DISCOVERIES INTERNATIONAL CORP.
(An Exploration Stage Company)
BALANCE SHEET
DECEMBER 31, 2002

ASSETSCurrent assetscash

$
3,340LIABILITIES AND STOCKHOLDERS' DEFICIENCYLiabilities:Accounts payable:Prospecting Geophysics Ltd.

$
886,076Other


100,193Advances from stockholders


586,056Total liabilities


1,572,325Commitments and contingenciesStockholders' deficiency:Preferred stock, par value $.001 per share; 20,000,000 shares authorized; none issued


Common stock, par value $.001 per share; 80,000,000 shares authorized; 18,685,000 shares issued and outstanding


18,685Additional paid-in capital


1,048,165Deficit accumulated during the exploration stage


(2,612,544
)Subscriptions receivable for 51,758 shares


(23,291
)Total stockholders' deficiency


(1,568,985
)Total

$
3,340


See
Notes to Financial Statements.

20

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DIAMOND DISCOVERIES INTERNATIONAL CORP.
(An Exploration Stage Company)
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 2002 AND 2001 AND PERIOD FROM
APRIL 24, 2000 (DATE OF INCEPTION) TO DECEMBER 31, 2002

2002

2001

April 24,
2000 to
December 31,
2002Revenues

$


$


$
Operating expenses:Exploration costscharges by Prospecting Geophysics Ltd., net of reimbursements


511,752


828,229


1,938,513General and administrative expenses


365,986


192,961


674,031Totals


877,738


1,021,190


2,612,544Net loss

$
(877,738
)
$
(1,021,190
)
$
(2,612,544
)Basic net loss per common share

$
(.05
)
$
(.06
)Basic weighted average common shares outstanding


18,001,044


15,795,418


See
Notes to Financial Statements.

21

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DIAMOND DISCOVERIES INTERNATIONAL CORP.
(An Exploration Stage Company)
STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY
YEAR ENDED DECEMBER 31, 2002 AND 2001 AND PERIOD FROM APRIL 24, 2000
(DATE OF INCEPTION) TO DECEMBER 31, 2002

|                                                                       |  |   |  |   |   |  |            |  |   |        |  | Deficit
Accumulated
During the
Exploration
Stage |           |  |   |            |   |            |  
|---------------------------------------------------------------------- |  | - |  | - | - |  | ---------- |  | - | ------ |  | ------------------------------------------------ | --------- |  | - | ---------- | - | ---------- | -
|
|
|
|Issuance of shares to founders effective as of April 24, 2000          |  |  |  | $ |  |  | 4,850,000  |  | $ | 4,850  |  |                                                  |           |  |   |            |   |            |  
|Issuance of shares as payment for legal services                       |  |   |  |   |   |  | 150,000    |  |   | 150    |  | $                                                | 3,600     |  |   |            |   |            |  
|Issuance of shares in connection with acquisition of mineral permits   |  |   |  |   |   |  | 2,000,000  |  |   | 2,000  |  |                                                  | 48,000    |  |   |            |   |            |  
|Subscription for purchase of 10,000,000 shares                         |  |   |  |   |   |  | 10,000,000 |  |   | 10,000 |  |                                                  | 240,000   |  |   |            |   | 10,000,000 |  
|Proceeds from issuance of common stock                                 |  |   |  |   |   |  |            |  |   |        |  |                                                  |           |  |   |            |   | (1,000,000 | )
|Net loss                                                               |  |   |  |   |   |  |            |  |   |        |  |                                                  |           |  | $ | (713,616   | ) |            |  
|                                                                       |  |   |  |   |   |  |            |  |   |        |  |                                                  |           |  |   |            |   |            |  
|Balance, December 31, 2000                                             |  |  |  |   |  |  | 17,000,000 |  |   | 17,000 |  |                                                  | 291,600   |  |   | (713,616   | ) | 9,000,000  |  
|Proceeds from issuance of common stock                                 |  |   |  |   |   |  |            |  |   |        |  |                                                  |           |  |   |            |   | (9,000,000 | )
|Net loss                                                               |  |   |  |   |   |  |            |  |   |        |  |                                                  |           |  |   | (1,021,190 | ) |            |  
|                                                                       |  |   |  |   |   |  |            |  |   |        |  |                                                  |           |  |   |            |   |            |  
|Balance, December 31, 2001                                             |  |  |  |   |  |  | 17,000,000 |  |   | 17,000 |  |                                                  | 291,600   |  |   | (1,734,806 | ) |           |  
|Proceeds from private placements of units of common stock and warrants |  |   |  |   |   |  | 1,685,000  |  |   | 1,685  |  |                                                  | 756,565   |  |   |            |   | 51,758     |  
|Net loss                                                               |  |   |  |   |   |  |            |  |   |        |  |                                                  |           |  |   | (877,738   | ) |            |  
|                                                                       |  |   |  |   |   |  |            |  |   |        |  |                                                  |           |  |   |            |   |            |  
|Balance, December 31, 2002                                             |  |  |  | $ |  |  | 18,685,000 |  | $ | 18,685 |  | $                                                | 1,048,165 |  | $ | (2,612,544 | ) | 51,758     |  
|                                                                       |  |   |  |   |   |  |            |  |   |        |  |                                                  |           |  |   |            |   |            |  

See Notes to Financial Statements.

22

---

DIAMOND DISCOVERIES INTERNATIONAL CORP.
(An Exploration Stage Company)
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2002 AND 2001 AND PERIOD FROM
APRIL 24, 2000 (DATE OF INCEPTION) TO DECEMBER 31, 2002

2002

2001

April 24,
2000 to
December 31,
2002Operating activities:Net loss

$
(877,738
)
$
(1,021,190
)
$
(2,612,544
)Adjustments to reconcile net loss to net cash used in operating activities:Costs of services paid through issuance of common stock








3,750Cost of mineral permits paid through the issuance of common stock








50,000Changes in operating assets and liabilities:Accounts payable


128,059


470,141


986,269Accrued interest





13,800Net cash used in operating activities


(749,679
)

(537,249
)

(1,572,525
)Financing activities:Advances from stockholders, net


17,719


296,566


586,056Proceeds from issuance of common stock and warrants


734,959


225,000


989,809Net cash provided by financing activities


752,678


521,566


1,575,865Net increase (decrease) in cash


2,999


(15,683
)

3,340Cash, beginning of period


341


16,024


Cash, end of period

$
3,340

$
341

$
3,340


See
Notes to Financial Statements.

23

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DIAMOND DISCOVERIES INTERNATIONAL CORP.  (An Exploration Stage Company)        NOTES TO FINANCIAL STATEMENTS

Note 1Business and basis of presentation:

Diamond Discoveries International Corp. (the "Company") was incorporated in the State of Delaware on April 24, 2000. The Company plans to engage in
activities related to the exploration for mineral resources in Canada. It plans to conduct exploration and related activities through contracts with third parties.

As
further explained in Note 3, the Company acquired its mineral permits for property in the "Torngat Fields" located in the Province of Quebec, Canada. The Company intends to
develop the permits from early stage exploration through completion of the exploration phase. Prior to any further exploration decisions, a mineral deposit must be appropriately assessed. Gathering
this data usually takes at least two years. Once the appropriate data has been gathered, management will determine whether and how to proceed. The Company recently discovered tiny diamonds in samples
taken from the property and has contracted with Prospecting Geophysics Ltd. ("PGL") to conduct surveys and exploration at the property to begin to enable it to determine whether
it can extract and produce diamonds from this kimberlite (see Note 3).

Other
than contracting with PGL to conduct exploration and gather data on its behalf, the Company had not conducted any operations or generated any revenues as of December 31,
2002. Accordingly, it is considered an "exploration stage company" for accounting purposes.

The
accompanying financial statements have been prepared assuming the Company will continue as a going concern. However, in addition to not generating any revenues, the Company had a
working capital and a stockholders' deficiency of approximately $1,569,000 as of December 31, 2002. Management believes that the Company will not generate any revenues during the twelve month
period
subsequent to December 31, 2002 in which it will be gathering and evaluating data related to the permits for the Torngat Fields. Although the Company received total consideration of $734,959 as
a result of the completion of private placements of 1,685,000 units of common stock and warrants to purchase common stock during the year ended December 31, 2002 (see Note 9), management
believes that the Company will still need total additional financing of approximately $1,000,000 to continue to operate as planned during the twelve month period subsequent to December 31,
2002. These conditions raise substantial doubt about the Company's ability to continue as a going concern.

Management
plans to obtain such financing through private offerings of debt and equity securities. However management cannot assure that the Company will be able to obtain any or all of
the additional financing it will need to continue to operate through at least December 31, 2003 or that, ultimately, it will be able to generate any profitable commercial mining operations. If
the Company is unable to obtain the required financing, it may have to curtail or terminate its operations and liquidate its remaining assets and liabilities.

The
accompanying financial statements do not include any adjustments related to the recoverability and classifications of assets or the amounts and classification of liabilities that
might be necessary should the Company be unable to continue its operations as a going concern.

24

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Note 2Summary of significant accounting policies:

Use
of estimates:

The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions
that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Mining
costs:

Exploration
and evaluation costs are expensed as incurred. Management's decision to develop or mine a property will be based on an assessment of the viability of the property and the
availability of financing. The Company will capitalize mining exploration and other related costs attributable to reserves in the event that a definitive feasibility study establishes proven and
probable reserves.
Capitalized mining costs will be expensed using the unit of production method and will also be subject to an impairment assessment.

Concentrations
of credit risk:

The
Company maintains its cash in bank deposit accounts, the balances of which, at times, may exceed Federal insurance limits. Exposure to credit risk is reduced by placing such deposits
with major financial institutions and monitoring their credit ratings.

Impairment
of long-lived assets:

Impairment
losses on long-lived assets, such as mining claims, are recognized when events or changes in circumstances indicate that the undiscounted cash flows estimated to
be generated by such assets are less than their carrying value and, accordingly, all or a portion of such carrying value may not be recoverable. Impairment losses are then measured by comparing the
fair value of assets to their carrying amounts.

Income
taxes:

The
Company accounts for income taxes pursuant to the asset and liability method which requires deferred income tax assets and liabilities to be computed annually for temporary
differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to
the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The
income tax provision or credit is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities.

Net
earnings (loss) per share:

The
Company presents "basic" earnings (loss) per share and, if applicable, "diluted" earnings per share pursuant to the provisions of Statement of Financial Accounting Standards
No. 128, "Earnings per Share". Basic earnings (loss) per share is calculated by dividing net income or loss by the weighted average number of common shares outstanding during each period. The
calculation of diluted earnings per share is similar to that of basic earnings per share, except that the denominator is increased to include the number of additional common shares that would have
been outstanding if all potentially dilutive common shares, such as those issuable upon the exercise of warrants, were issued during the period.

25

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Since
the Company had a net loss for the year ended December 31, 2002, the assumed effects of the exercise of the warrants to purchase 1,685,000 shares of common stock that were
issued during that year and the application of the treasury stock method would have been anti-dilutive. The Company did not have any potentially dilutive common shares outstanding during
the year ended December 31, 2001. Therefore, diluted per share amounts have not been presented in the accompanying statements of operations.

Foreign
currency translation and transactions:

Canadian
assets and liabilities are translated at current exchange rates and expenses are translated at average exchange rates in effect during each period. Resulting translation
adjustments, if material, would be recorded as a separate component of stockholders' deficiency. Foreign currency transaction gains and losses, which have not been material, are included in results of
operations as incurred.

Recent
accounting pronouncements:

The
Financial Accounting Standards Board and the Accounting Standards Executive Committee of the American Institute of Certified Public Accountants had issued certain accounting
pronouncements as of December 31, 2002 that will become effective in subsequent periods; however, management of the Company does not believe that any of those pronouncements would have
significantly affected the Company's financial accounting measurements or disclosures had they been in effect during the period from April 24, 2000 to December 31, 2002, and it does not
believe that any of those pronouncements will have any significant impact on the Company's financial statements at the time they become effective.

Note 3Permits:

Pursuant to an agreement consummated on September 12, 2000, the Company acquired certain permits in the Torngat Fields from Peter Ferderber and S. G.
Hawkins, who are key consultants and advisors to the Company, for total consideration of $90,540, of which $40,540 ($60,000 Canadian) represents the amount paid in cash and $50,000 represents the fair
value of a total of 2,000,000 shares of the Company's common stock issued to Messrs. Ferderber and Hawkins. The exchange of shares for the permits was a noncash transaction that is not
reflected in the accompanying statement of cash flows for the period from April 24, 2000 to December 31, 2002.

In
connection with the acquisition of these permits, the Company assigned to the sellers a 1% interest in the "net smelter returns" of the property, one-half of which is
payable over the first $50,000,000 (Canadian) of revenues produced from the property. Such interest would terminate once the sellers receive a total of $10,000,000 (Canadian) based on such interest.
Net smelter returns are determined by the net amount received from the sale to a smelter or other buyer of ore, ore concentrates or other products produced from the property.

Mr. Hawkins
owns Tandem Resources, Ltd. ("Tandem"). As part of the agreement for the purchase of the permits, the Company granted Tandem an option to purchase a 40%
interest in a joint venture that would be formed between the Company and Tandem to conduct operations related to the properties covered by the permits at such time as the Company has incurred
expenditures related to such operations totaling $5,000,000 (Canadian). The exercise price for the option will be $2,000,000 (Canadian). Mr. Ferderber also is the president of PGL (see
Note 1).

26

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In
2002, the Company acquired additional permits for adjacent property in the Torngat Fields by staking the property and paying the requisite fees to the Quebec Department of Natural
Resources.

Note 4Advances from stockholders:

Advances from stockholders of $586,056 at December 31, 2002 were noninterest bearing and due on demand.

Although
management does not believe that there is a practical method that can be used to specifically determine the fair value of the advances from stockholders because of the
relationship of the Company and its stockholders, it believes that the advances will be repaid on a short-term basis and, accordingly, the carrying value of the advances approximated fair
value as of December 31, 2002.

Note 5Preferred stock:

As of December 31, 2002, the Company was authorized to issue up to 20,000,000 shares of preferred stock with a par value of $.001 per share. The preferred
stock may be issued in one or more series with dividend rates, conversion rights, voting rights and other terms and preferences to be determined by the Company's Board of Directors, subject to certain
limitations set forth in the Company's Articles of Incorporation. No shares of preferred stock had been issued by the Company as of December 31, 2002.

Note 6Other issuances of common stock:

During the period from April 24, 2000 to December 31, 2000, the Company issued 150,000 shares of common stock as payment for legal services.
Accordingly, general and administrative expenses in the accompanying statement of operations, and common stock and additional paid-in capital in the accompanying statements of
stockholders' deficiency, for the period from April 24, 2000 to December 31, 2002 was increased to reflect the estimated fair value of the shares of $3,750.

On
May 20, 2000, the Company completed the sale of 10,000,000 shares of common stock for $250,000, or $.025 per share, through a private placement intended to be exempt from
registration under the Securities Act of 1933 (the "Act"). Initially, the buyer paid $25,000 in cash and $225,000 through the issuance of a 10% promissory note. The exchange of shares for a note
receivable was a noncash transaction that is not reflected in the accompanying statement of cash flows for the period from April 24, 2000 to December 31, 2002. The 10% promissory note
was paid on various dates through May 20, 2001.

During
the year ended December 31, 2002, the Company received total cash consideration of $734,959 as a result of the sale of 1,633,242 units of common stock and warrants to
purchase common stock at $.45 per unit through private placements intended to be exempt from registration under the Act. Each unit consisted of one share of common stock and one warrant to purchase
one share of common stock exercisable at $.75 per share for a two year period from the date of purchase. All of the warrants remained outstanding as of December 31, 2002. The Company had also
received subscriptions through the private placements for the purchase of 51,758 units at $.45 per unit or a total of $23,291 as of December 31, 2002. The notes receivable from the subscribers
are noninterest bearing and due six months from the respective dates of sale.

27

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Note 7Income taxes:

As of December 31, 2002, the Company had net operating loss carryforwards of approximately $2,613,000 available to reduce future Federal taxable income
which will expire at various dates through 2022. The Company had no other material temporary differences as of that date. Due to the uncertainties related to, among other things, the changes in the
ownership of the Company, which could subject those loss carryforwards to substantial annual limitations, and the extent and timing of its future taxable income, the Company offset the deferred tax
assets of approximately $1,045,000 attributable to the potential benefits from the utilization of those net operating loss carryforwards by an equivalent valuation allowance as of December 31,
2002.

The
Company had also offset the potential benefits from net operating loss carryforwards of approximately $694,000 and $286,000 by equivalent valuation allowances as of
December 31, 2001 and 2000. As a result of the increases in the valuation allowance of $351,000 for the year ended December 31, 2002, $408,000 for the year ended December 31, 2001
and $1,045,000 for the period from April 24, 2000 to December 31, 2002, the Company did not recognize any credits for income taxes in the accompanying statements of operations to offset
its pre-tax losses in any of those periods.

Note 8Subsequent events:

On March 10, 2003, the Company entered into agreements with various consultants for a period of one month beginning March 17, 2003. The consultants
shall provide services pertaining to the development and implementation of a sale and marketing plan, and provide for advice to directors and officers of the Company. The Company has agreed to
compensate the consultants by issuing them a total of 3,640,000 shares of its common stock which had an approximate aggregate fair value of $1,201,200 at the respective dates of issuance.

Note 11Guarantee:

On March 14, 2003, the Company became a guarantor of a promissory note issued by one of its stockholders with an outstanding balance of approximately
$101,200.

*        *        *

Item 8. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure

None

28

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PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance With Section 16(A) Of The Exchange Act

The following Table sets forth certain information regarding the executive officers and directors of the Company as of April 14, 2003:

|Name               |  | Age |  | Company Position  
|------------------ |  | --- |  | ------------------
|Teodosio V. Pangia |  | 44  |  | Chairman/CEO      
|Thomas Franzone    |  | 47  |  | Secretary/Director
|Peter Ferderber    |  | 75  |  | Consultant        
|Dr. Ed Schiller    |  | 70  |  | Advisor           

TEODOSIO V. PANGIA

Mr. Pangia has been Chairman, CEO and a Director of the Company since our formation in April 2000. He is the Chairman of TVP Capital Corp., a U.S.
based venture capital company which he founded in April 2000 and which has provided consulting services to the Company since April 2000. From June 1997 to July 1999,
Mr. Pangia was a co-founder and consultant of Environmental Solutions Worldwide, a company with five employees that is involved in the research and development of new products for
the environmental sector, with an emphasis on catalytic emission control products. In August 2002, Mr. Pangia was named as a co-defendant in a SEC civil lawsuit against Environmental Solutions
Worldwide, Inc., which seeks among other things to have Mr. Pangia barred from serving as an officer or a director of a publicly traded company. Mr. Pangia is currently defending himself
from these allegations. From 1995 through 1997, Mr. Pangia was Director and Chief Executive Officer of Ecology Pure Air International, a Canadian company with five employees engaged in
developing an automobile fuel catalyst. From 1992-1995, Mr. Pangia was a Director and Chief Executive Officer of EPA Enterprises, a Canadian company with five employees engaged in
developing pre-combustion fuel technology. In 1997, a petition in bankruptcy was brought against Mr. Pangia in the Ontario Court of Justice. That petition, and a related order, was
dismissed. Mr. Pangia anticipates spending approximately one-third of his professional time on the business of the Company. Mr. Pangia appeared before the Ontario Securities
Commission on December 5, 2001 to set a date for a pre-hearing in a matter in which it has been alleged by the Ontario Securities Commission that during the period from
March 1995 to February 1996 Mr. Pangia traded certain securities in Canada without being registered to do so and also engaged in a distribution of securities without filing a
preliminary prospectus or prospectus. Mr. Pangia is set to appear before the Ontario Securities Commission on June 3, 2003 in order to settle these allegations.

THOMAS FRANZONE

Mr. Franzone is a director and the secretary and principal accounting officer of our Company. He has been the President of Enviro Industrial
Technologies, Inc., a mineral processing company with two employees, since its formation in April 2000. From 1998 until he joined Enviro Industrial Technologies, Inc., he was the
President and sole employee of Franzone Consulting Corp. located in New York City, a business and accounting consultant company. From 1996 to 1999 Mr. Franzone held the position of controller
at Direct Approach Marketing, a direct marketing company with twenty-two employees. He came to Direct Approach Marketing after spending a year at Patient Education Media Time Life Medical,
a company that employed seventy people and produced medical information videos, where he held the position of Accounting Manager. From November 1989 to 1995 he worked as Controller for Empire
Diamond Corp. a company with ten employees that bought and sold estate jewelry. Mr. Franzone anticipates spending approximately one-third of his professional time on the business of
the Company.

29

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PETER FERDERBER

Mr. Ferderber is not an employee of ours but has been included here because we will rely heavily on his services and expertise. He is a consultant to the
Company. He has been involved in mining exploration for over forty years. He has been the President of Prospecting Geophysics Ltd., a mining geophysics company located in Quebec, Canada, since
1955 and was awarded the "Prospector of the Year," the Prospectors and Developers Association award for Canada and the Province of Quebec in 1979.

DR. ED SCHILLER

Dr. Ed Schiller is not an employee of ours but has been included here because we rely heavily on his service and expertise. He was a director of the Company from
October 2002 to March 2003. He has stepped down as a director for personal reasons. He has however agreed to stay on as an advisor. He has been involved in mining as a geologist for over forty years.
Dr. Schiller was a director of DIA-Met Minerals Ltd., where he supervised the drilling of the first diamond-bearing Kimberlite in the Northwest Territories in 1991. Since then he has been
involved in several other Canadian diamond projects. He was awarded a B.A. and Masters Degree from Michigan State University and a Ph.D. from the University of Utah.



Our management has other financial and business interests to which a significant amount of time is devoted which may pose conflicts of interest with regard to
allocation of their time and efforts. Teodosio Pangia, our president, director and CEO is also the sole principal of TVP Capital Corp., a Delaware corporation and holder of 20.44% of our common stock
and beneficially owns and/or controls, either directly or indirectly, six companies, Altea Investments, Ltd., Gata Investments, Ltd., Baychester Investments, Ltd., Bekeman
Investments, Ltd., Aester Investment Holdings Limited and S D Investments, Ltd., which in the aggregate hold 4,950,000 shares or 29.12% of our shares of common stock. There can be no
assurance that management will resolve all conflicts of interest in favor of Diamond Discoveries. Failure of management to conduct Diamond Discoveries' business in its best interest may result in
liability of the management to Diamond Discoveries.



The federal securities laws require our directors and executive officers and persons who beneficially own more than 10% of a registered class of our equity
securities to file with the SEC initial reports of ownership and reports of changes in ownership of our securities. Those persons who are required to file also are required to furnish us with copies
of those reports when they are filed with the SEC.
Based solely on our review of the copies of these forms received by us or representations from certain reporting persons, we believe that SEC beneficial ownership reporting requirements for fiscal
2002 were met with the following exceptions:

Theodosio
V. Pangia, our Chief Executive Officer, should have filed a Form 4 on or before June, 2002, relating to the acquisition of 4,950,000 shares by various entities that are
beneficially owned and/or controlled (directly or indirectly) by Mr. Pangia (See Security Ownership of Certain Beneficial Owners and Management), that was not filed.

Thomas
Franzone, our Secretary and Treasurer, should have filed a Form 4 on or before June, 2002, relating to the acquisition of 275,000 shares, that was not filed.

Due
to the complexity of the reporting rules, we expect to institute procedures to assist our officers and directors with these obligations.

30

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Item 10. Executive Compensation

We have not entered into employment agreements with any of our officers or directors.

Mr. Pangia
and Mr. Franzone, our executive officers, have not yet received any annual salary compensation for their services. However, the executive officers will likely
receive an annual salary or other compensation in the future.

We
have issued 3,475,000 shares of common stock, at $.001 per share, to TVP Capital Corp., of which Mr. Pangia is the sole shareholder. We have also issued 275,000 shares of
common stock, at $.001 per share, to Mr. Franzone. These shares were issued as founders' shares at par value, and so have not been recorded as compensation.

To
date, we have accrued, but not paid, $20,000 and $8,000 of compensation to Mr. Pangia and Mr. Franzone, respectively.

Item 11. Security Ownership of Certain Beneficial Owners and Management

The following table sets forth the name and address of each officer and director of the Company and each person who owns beneficially more than five percent of
the Common Stock of the Company, and the number of shares owned by each such person and by all officers and directors as a group as of April 15, 2003:

|Name and Address of Beneficial Owner(1)                                                        |  | Amount and Nature
of Ownership |     | Approximate
% of Class(2) |  
|---------------------------------------------------------------------------------------------- |  | ------------------------------ | --- | ------------------------- | -
|Teodosio V. Pangia
President, CEO and Director                                                 |  | 8,365,000                      | (3) | 37.53                     | %
|Thomas Franzone
Secretary                                                                      |  | 100,000                        |     | *                         |  
|Directors and Officers as a Group                                                              |  | 8,465,000                      |     | 37.98                     | %
|TVP Capital Corp.(4)                                                                           |  | 3,415,000                      |     | 15.32                     | %
|Gaye Knowles
Management International Building
East Bay Street
P.O.N.-8188 Nassau, The Bahamas |  | 1,200,000                      | (5) | 5.38                      | %

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31

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Item 12. Certain Relationships and Related Transactions.

Teodosio
Pangia, our president, director and CEO, is the sole principal of TVP Capital Corp, a Delaware corporation which owns 3,415,000 shares or 15.32% of our shares of common stock
and beneficially owns and/or controls, either directly or indirectly, six companies, Altea Investments, Ltd., Gata Investments, Ltd., Baychester Investments, Ltd., Bekeman
Investments, Ltd., Aester Investments Holdings Limited and S D Investments, Ltd., which in the aggregate hold 4,950,000 shares or 22.21% of our shares of common stock.

We
have entered into an Acquisition Agreement dated September 12, 2000 with Mr. Ferderber, Mr. Hawkins and Tandem Resources Ltd. The Acquisition Agreement
provides for us to purchase certain mineral exploration permits from Messrs. Ferderber and Hawkins. Such permits cover 469.05 square kilometers in the Torngat fields in northwest Quebec,
Canada, on the eastern shore of Ungava Bay. As consideration for the acquisition of these permits, we have issued 1,000,000 shares of our common stock to each of Messrs. Ferderber and Hawkins
and have paid $35,000 Canadian to Mr. Hawkins and $25,000 Canadian to Mr. Ferderber.

In
addition, the Acquisition Agreement further provides for an option to Tandem Resources Ltd., to purchase 40% of the properties covered by the permits conditioned on
(i) the Company expending $5,000,000 Canadian on exploration of the properties; (ii) Tandem paying us $2,000,000 Canadian and (iii) Tandem entering into a joint venture agreement
with us to operate the properties within 60 days of our demonstrating expenditure of $5,000,000 Canadian on exploration of the properties. In addition, we will have twenty-one
(21) days from the date we notify Tandem that we have expended $5,000,000 Canadian on exploration of the properties, to negotiate a financing agreement with Tandem to provide Tandem with the
$2,000,000 Canadian required to exercise the option. Should no agreement be reached in the twenty-one (21) day period, our right to provide this financing shall expire. Also, upon
the closing of the acquisition, we assigned to Messrs. Ferderber and Hawkins a one (1%) percent interest in the Net Smelter Returns of the properties, half of which is payable over the first
$50,000,000 Canadian in revenues from the properties. This interest in the Net Smelter Returns terminates once Ferderber and Hawkins have received, in the aggregate, $10,000,000 Canadian.

In
connection with the Acquisition Agreement, Mr. Ferderber has executed an agreement with us as of June 20, 2000 which transfers mineral rights over all of the properties
to us.

We
have entered into a Prospecting and Survey Agreement with Prospecting Geophysics Ltd. dated November 20, 2000, whereby Prospecting Geophysics Ltd. will act as the
project manager for the Company's mineral exploration operations. Peter Ferderber is the President of Prospecting Geophysics Ltd. Under the agreement, we are to pay for Mr. Ferderber's
services at a rate of $500 per day, on days that he personally attends the properties, in addition to reimbursing all expenses incurred by Prospecting Geophysics on behalf of the Company.
Mr. Ferderber anticipates attending the properties approximately five to seven days every month. Prospecting Geophysics is required under the agreement to conduct prospecting and surveying
activities on our behalf. The agreement has a term of eighteen (18) months with automatic renewal unless either party gives 30 days' notice of its intent to terminate. During the years
ended December 31, 2002 and 2001 and the periods from April 24, 2000 (date of inception) to December 31, 2002, we incurred exploration costs by Prospecting Geophysics Ltd.
of $511,752, $828,229 and $1,938,513, respectively. In addition, the Company owed Prospecting Geophysics Ltd. $886,076 at December 31, 2002.

We
believe that the terms of the above transactions are on terms at least as favorable to us as could have been obtained from arms-length negotiations with unrelated third
parties.

32

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Item 13. Exhibits and Reports on Form 8-K.

There were no Current Reports on Form 8-K filed by the Registrant during the fourth quarter of the calendar year ended December 31,
2002.

|Exhibit
Number |  | Description of Document                                                                                                             
|-------------- |  | ------------------------------------------------------------------------------------------------------------------------------------
|3.1            |  | Articles of Incorporation as filed on April 24, 2000(1)                                                                             
|3.2            |  | Bylaws of Diamond Discoveries International Corp.(1)                                                                                
|10.1           |  | Acquisition Agreement dated September 12, 2000 between the Company and Peter Ferderber, Stanley Hawkins and Tandem Resources Ltd.(2)
|10.2           |  | Prospecting and Survey Agreement between Prospecting Geophysics Ltd and the Company dated August 14, 2000.(1)                       
|10.3           |  | Transfer of Mining Rights between Peter Ferderber and the Company dated June 20, 2000.(1)                                           
|10.4           |  | Option Agreement between Diamond Discoveries International Corp. and Tandem Resources Ltd. dated September 12, 2000.(2)             
|10.5           |  | Revised Prospecting and Survey Agreement between Prospecting Geophysics Ltd. and the Company dated November 20, 2000.(2)            
|99.1           |  | Title opinion of Lavery, de Billy on the Mining Exploration Permits.(1)                                                             
|99.2           |  | Certification of Periodic Report.                                                                                                   
|99.3           |  | Certification of Periodic Report.                                                                                                   

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Item 14. Controls and Procedures

33

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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

| |  | DIAMOND DISCOVERIES INTERNATIONAL CORP.
| |  | ---------------------------------------
| |  |                                        
| |  | By:                                    
| |  |                                        
| |  | Dated: May 2, 2003                     

In
accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

| |  | By:                |  | /s/TEODOSIO V. PANGIATeodosio V. Pangia, CEO and Chairman and
Director                  
| |  | ------------------ |  | ----------------------------------------------------------------------------------------
| |  |                    |  |                                                                                         
| |  | Dated: May 2, 2003
| |  |                    |  |                                                                                         
| |  | By:                |  | /s/THOMAS FRANZONEThomas Franzone, Secretary, Treasurer and Principal
Accounting Officer
| |  |                    |  |                                                                                         
| |  | Dated: May 2, 2003

35

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CERTIFICATIONS

I,
Teodosio V. Pangia, certify that:





|Date: May 2, 2003 |  | /s/TEODOSIO V. PANGIATeodosio V. Pangia Chief Executive
Officer
|----------------- |  | ---------------------------------------------------------------

36

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CERTIFICATIONS

I,
Thomas Franzone, certify that:





|Date: May 2, 2003 |  | /s/THOMAS FRANZONEThomas Franzone Principal Accounting
Officer
|----------------- |  | --------------------------------------------------------------

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APPENDIX A

MAP

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