216 CARAT WHITE DIAMOND RECOVERED AT LETŠENG MINE

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5 Feb 2007

  • 216ct diamond is white D colour and flawless bar a small peripheral gletz*
  • Follows shortly after the recovery of the Lesotho Promise, a 603ct white diamond recovered in August 2006

Gem Diamonds Limited (Gem Diamonds), and its partner the Government of the Kingdom of Lesotho (Lesotho Government), the owners and operators of the Letšeng Diamond Mine in Lesotho, are proud to announce the recovery of a 216 carat white D colour diamond at Letšeng on the 26th January 2007. The stone was transported for sale to Antwerp last week and will be tendered for in a parcel that includes two other white D colour flawless stones of 54.9 and 30 carats respectively.

The Letšeng mine recently rose to prominence with the recovery last year of the Lesotho Promise, the 15th largest gem quality diamond publicly reported as being recovered, which was sold in Antwerp to SAFDICO, the owners of Graff Jewellers, for US$12.4million. The mine is situated in the Maluti Mountains in Lesotho and is the highest diamond mine in the world.

Lesotho's Minister of Natural Resources, Dr Khaketla said:

"The Lesotho Promise heralded an auspicious start to our partnership with Gem Diamonds at Letšeng and we are delighted not only that we have followed that historic find with another exceptional and important diamond, but that Letšeng has been able to continue to achieve strong production figures and excellent prices for our world-class diamonds."

Clifford Elphick, CEO of Gem Diamonds said:

"We have always been confident of the potential of Letšeng and today's announcement of the recovery of another significant diamond of 216 carats reinforces that confidence."

* Gletz is an industry term to describe a small naturally formed plane in a diamond.

For further information:
Gem Diamonds Limited

Clifford Elphick
Kevin Burford
Angela Parr
Tel:+27 83 578 3885

Merlin

David Simonson
Bridget Fury
Tel: +44 20 7653 6620

About Gem Diamonds Limited (Gem Diamonds)

Gem Diamonds is a specialist diamond mining group with assets concentrated in Africa. The Group was founded in July 2005 by Clifford Elphick, a highly experienced diamond mining executive, who was previously Managing Director of E Oppenheimer & Son. Gem Diamonds has a balanced portfolio of assets, including early stage exploration projects right through to Letšeng, a producing diamond mine with strong, positive cash flow. It is the operator of and owner of a majority stake in the successful Letšeng diamond mine in Lesotho, with the remainder being held by the Government of Lesotho. It also has interests in exploration projects in the Longatshimo and Tshumbe-Lubembe regions of the Democratic Republic of Congo and the Mambéré River region in the Central African Republic and has recently concluded a significant co-operation agreement and option to invest in the Chiri kimberlite in Angola

Gem Diamonds has assembled an experienced team, with combined experience of 150 years in the mining industry. The directorate comprises Clifford Elphick as Chairman and Chief Executive Officer, Kevin Burford as Chief Financial Officer and Graham Wheelock as Mineral Resources Manager. Senior management includes Terry Stewart as Chief Operating Officer and Glenn Turner as Commercial and Legal Director.

Letšeng Diamonds (Pty) Ltd (Letšeng Diamonds)

Letšeng Diamonds was incorporated in Lesotho in 1995 with the intention of seeking a mining lease from the Government of Lesotho to re-open the Letšeng Diamond Mine on the high plateaux of the Maluti Mountains.

The mine was previously operated by De Beers from 1977 to 1982 and was closed with less than 10% of the open pit mineable ore having been treated. An initial application by JCI Ltd was made to the Government of Lesotho in September of 1996 followed by a second revised application in 1998 which subsequently led to the signing of the Concession Agreement and the granting of the Mining Lease in November 1999 to JCI.

Mining operations commenced in April 2004.

The mine is owned 70% by Gem Diamonds and 30% by the Government of the Kingdom of Lesotho.