GEM DIAMONDS AUSTRALIA PTY LIMITED TAKEOVER BID FOR KIMBERLEY REACHES 90%

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03 Dec 2007

Further to the announcement by Gem Diamonds on 26 November 2007 of the decision to declare Gem Diamond Australia's takeover Offr for Kimberley Diamond Company NL ("Kimberley") to be unconditional, Gem Diamonds confirms that as at 3 December 2007 Gem Diamond Australia, a wholly owned subsidiary of Gem Diamonds, has a relevant interest in 93.03% of Kimberley's issued ordinary share capital. In line with the Company's plans outlined to shareholders in the circular posted 28 September 2007, it intends to proceed with the compulsory acquisition of the outstanding shares in Kimberley.

Gem Diamonds Australia also intends to proceed with the delisting of Kimberley's shares from the ASX and the cancellation of Kiberley's admission to AIM. The last day of trading in the Kimberley's shares on ASX will be determined shortly and on AIM is expected to be 21 December 2007.

As detailed to Kimberley shareholders on 30 November 2007, Gem Diamonds Australia elected to extend the Offer Period from the previously indicated closing date of 1 December 2007 to 17 ecember 2007.

Definitions used in this announcement shall have the meanings given to them in the shareholder circular posted 28 September 200, except where context requires otherwise.

For further information:
Gem Diamonds Limited

Clifford Elphick
Tel: +44 203 043 0280

Gem Diamond Technical Services (Pty) Limited

Stephen Wetherall
Tel: +27 82 418 8735

Pelham PR

Candice Sgroi
Tel: +44 207 743 6376

About Gem Diamonds:

Gem Diamonds is a diamond mining company with a balanced portfolio of a producing kimberlite mine, two producing alluvial mines, development projects and long?term prospects. Established in July 2005, Gem Diamonds is pursuing an accelerated growth strategy and aims to become one of the world?s leading diamond companies. Gem Diamonds currently has one producing kimberlite mine, Letšeng, in Lesotho, two producing alluvial mines ? Cempaka in Indonesia and Mbelenge in the Democratic Republic of Congo (DRC), a kimberlite development project in Botswana, two development projects in the DRC, one in the Central African Republic and an option to develop the Chiri kimberlite concession in Angola.

The Company recently made an offer to Kimberley Diamond Company's shareholders to acquire their shares in this company, which owns the Ellendale Mine in north Western Australia.

Gem Diamonds currently has a specific focus towards higher value diamonds, a segment of the market that its management believes will deliver superior long term returns.

For further information about Gem Diamonds visit www.gemdiamonds.com.