ALLOTMENT AND ISSUE OF ORDINARY SHARES TO NON-EXECUTIVE DIRECTORS

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01 June 2007

On 31 May 2007, the Board of Directors of Gem Diamonds Limited ("Gem Diamonds" or the "Company") met and formally approved the allotment and issue of ordinary shares in the capital of the Company ("Ordinary Shares") to the Company's three Non-Executive Directors on the terms set out in the Prospectus published by the Company on 14 February 2007 and outlined in more detail below. The Ordinary Shares will be subscribed for at nominal value of US$0.01 each.

Non-Executive Director   Number of Ordinary Shares
Roger Davis   289,326
Gavin Beevers   72,332
Dave Elzas   72,332
For further information:
Gem Diamonds Limited

Graham Wheelock / Angela Parr
Tel: +27 11 325 7652

Merlin

David Simonson / Bridget Fury
Tel: +44 20 7653 6620