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Interim results for the six months ended 30th June 2009

26 August 2009

Gem Diamonds (LSE: GEMD) reports its interim results for the six months ended 30th June 2009.

Highlights

• Gem Diamonds emerges profitably from the downturn
• Rough diamond prices rose during the first half of the year
• Successful capital raising of US$98.8M (net of expenses)
• All debt repaid during the period
• Cash at hand of US$120.5M at period end
• Revenue of US$117.8M
• EBITDA of US$25.1M
• Attributable profit of US$3.3M (3.60 US cents per share)

Gem Diamonds CEO Clifford Elphick commented:

"During the first half of the year, Gem Diamonds pursued a strategy of focusing on cash preservation and generating maximum cash flow from its producing mines Letšeng in Lesotho and Ellendale in Australia. I am pleased with the performance of both of our producing mines which were profitable during the period. After undertaking a successful capital raising we are entering the second half of the year with a strong balance sheet and no debt. Demand for top quality and top colour large stones continues and prices seem to have stabilised. At the retail end of the chain, demand for diamond wedding jewellery remains strong in the Middle East, Asia and the US. We are also seeing growth in demand for diamonds from China. However we still remain cautious on the US market at this stage particularly the forthcoming Thanksgiving and Christmas season."

Interim Results for the six months ended 30th June 2009 (PDF - 159KB)

For further information:

Gem Diamonds Limited

Clifford Elphick, Chief Executive Officer
Glenn Turner, Chief Commercial Officer
Tel: +44 (0) 203 043 0280

Richard Chetwode, Investor Relations
Tel: +44 (0) 203 043 0280
Mob: +44 (0) 759 0064 883

Gem Diamond Technical Services Ltd

Sherryn Tedder, Media
Tel: +27 (0) 11 560 9618
Mob: +27 (0) 83 943 4505

Pelham PR

Candice Sgroi
Tel: +44 (0) 207 337 1533

James Henderson
Tel: +44 (0) 207 337 1501

About Gem Diamonds:

Gem Diamonds is a diamond mining and marketing company with a specific focus towards higher value diamonds, a segment of the market that its management believes will deliver superior long term returns. Under current market conditions, Gem Diamonds is pursuing a near term strategy of focusing on cash preservation and generating maximum cash flow from its producing assets, the

Letšeng Mine in Lesotho and the Kimberley Diamonds’ Ellendale E9 Pipe in Australia. These two operations continue to produce amongst the world’s finest white and fancy yellow diamonds respectively.