LESELI LA LETŠENG FETCHES RECORD PRICE

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02 Dec 2008

  • Light of Letšeng sold on tender in Antwerp for US$18.4 million, to SAFDICO, the manufacturing arm of Graff Diamonds
  • The price represents an extraordinary price per carat of US$38 400, against a global average diamond price of US$90 per carat
  • This remarkable value is attributable to the Light of Letšeng's top colour and outstanding clarity
  • The diamond was recovered at Letšeng le Terai Mine in Lesotho on 8 September 2008
  • Light of Letšeng is the third significant diamond to be recovered at Letšeng in as many years

Gem Diamonds Limited (Gem Diamonds) and the Government of the Kingdom of Lesotho are pleased to announce the sale of the Light of Letšeng, a remarkable 478 carat white diamond, in Antwerp for US$18.4 million. The Light of Letšeng, or the Leseli la Letšeng in Lesotho's native language Sesotho, was named to reflect its outstanding colour and clarity which are of the highest possible standard for a rough diamond.

The world's leading diamantaires participated in the tender and the winning bid was made by SAFDICO, the manufacturing arm of Graff Diamonds. Graff Diamonds is one of the world's leading diamond jewellery purveyors and was also the winning bidder for the Lesotho Promise in 2006 and the Letšeng Legacy in 2007. There were strong bids from a further six diamantaires.

The diamond ranks as the 20th largest rough diamond ever to be recovered. The Letšeng mine in Lesotho is renowned for its production of remarkable diamonds and the Light of Letšeng is the third significant recovery from the Letšeng mine in as many years, following the 603 carat Lesotho Promise and the 493 carat Letšeng Legacy recovered in 2006 and 2007 respectively. Including the 601 carat Lesotho Brown, recovered in 1967, the Letšeng mine has now produced four of the world's 20 largest rough diamonds and the three largest diamonds recovered this century.

Q408 prices for Letšeng's diamonds are now averaging US$2 139 and year to date the average price per carat on all Letšeng diamonds sold is US$2 123. This compares favourably to the average price per carat achieved in 2006 and 2007 which were US$1 578 and US$1 977 respectively.

Clifford Elphick, CEO of Gem Diamonds said:

"The Leseli la Letšeng is one of the most significant diamonds to have been recovered in living memory. Nevertheless it remains exceptionally pleasing that despite these difficult financial times that this diamond has been recognized for its outstanding quality and in turn has achieved significant value. This is testament to the enduring value of the historic diamonds that Letšeng continues to produce."

Laurence Graff, the Chairman of Graff Diamonds commented:

"To the best of our knowledge this is the most valuable rough diamond ever to be sold. We are delighted to be the successful bidder for such an historic stone, following our acquisition of the 603ct Lesotho Promise and 493ct Letšeng Legacy both from the Letšeng mine. With our significant expertise in large diamonds we expect to produce an exceptionally beautiful polished diamond of at least 200 carats. This investment is indicative of our commitment to the diamond industry and our faith in the long term value of diamonds."

For further information:
Gem Diamonds Limited

Investor relations
Glenn Turner / Richard Chetwode
Tel: +44 203 043 0280

Gem Diamond Technical Services (Pty) Limited

Public and media relations
Angela Parr
Mob: +27 83 578 3885

Pelham PR

Candice Sgroi
Tel: +44 207 743 6376 / Mob: +44 7894 462 114

About Gem Diamonds:

Gem Diamonds Limited is a global diamond company that is pursuing a long term growth strategy. The Company's portfolio comprises producing kimberlite, lamproite and alluvial mines, development projects, exploration assets as well as diamond beneficiation centres. Operations are situated in Angola, Australia, Botswana, the Central African Republic, the Democratic Republic of Congo, Dubai, Lesotho, Indonesia and Mauritius.

Gem Diamonds has a specific focus towards higher value diamonds, a segment of the market expected to deliver superior long term returns. The Company produces some of the world's most remarkable white diamonds from its Letšeng mine and rare fancy yellow diamonds from its Ellendale mine and an array of coloured diamonds from its Cempaka mine.

Established in July 2005, Gem Diamonds listed on the main board of the London Stock Exchange in February 2007