PUBLICATION OF PROSPECTUS AND CIRCULAR

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06 Apr 2009

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART IN, INTO OR FROM THE UNITED STATES, CANADA, AUSTRALIA, JAPAN, SOUTH AFRICA OR SWITZERLAND

Further to the announcement on 01 April 2009 of a Placing of Ordinary Shares in the Company, Gem Diamonds (LSE: GEMD) announces that two copies of the related Prospectus and Circular have been submitted to the UK Listing Authority (the 'UKLA') and will shortly be available for inspection at the UKLA's Document Viewing Facility, which is situated at:

The Financial Services Authority

25 The North Colonnade
Canary Wharf
London E14 5HS

Copies of the Prospectus and Circular are also available at the Company's registered office at 2 Eaton Gate, London, SW1 W9BJ, United Kingdom, being the Company's principal place of business in the United Kingdom.

The information in this press release is not for release, publication or distribution, directly or indirectly, in or into the United States, Canada, Japan, Australia, the Republic of South Africa or Switzerland or any other jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction.

The information in this press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, the securities referred to herein in any jurisdiction in which such offer, solicitation or sale would require preparation of further prospectuses or other offer documentation, or be unlawful prior to registration, exemption from registration or qualification under the securities laws of any such jurisdiction.

The information in this press release does not constitute or form a part of any offer or solicitation to purchase or subscribe for securities in the United States. The securities mentioned herein have not been, and will not be, registered under the United States Securities Act of 1933 (the "Securities Act"). The securities mentioned herein may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act. There will be no public offer of securities in the United States.

The information in this press release may not be forwarded or distributed to any other person and may not be reproduced in any manner whatsoever. Any forwarding, distribution, reproduction, or disclosure of this information in whole or in part is unauthorized. Failure to comply with this directive may result in a violation of the Securities Act or the applicable laws of other jurisdictions.

For further information, please contact:
Gem Diamonds Limited

Richard Chetwode, Investor Relations Manager
Tel: +44 (0) 203 043 0280

Pelham PR

Candice Sgroi
Tel: +44 (0) 20 7337 1533

J.P. Morgan Cazenove

Patrick Magee
Neil Passmore
Tel: +44 (0) 20 7588 2828