GEM DIAMONDS SALE OF ASSETS IN THE DRC

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08 Dec 2009

Gem Diamonds (LSE: GEMD) today announces that it has completed the sale of its shares in two of its three companies in the Democratic Republic of Congo ("DRC") to Kasai Resource Mining Limited ("KRM") for a total purchase price of US$ 3.8 million. The sale of Gem Diamonds' third company in the DRC, at a purchase price of US$ 1.2 million, is expected to be completed in January 2010.

Under the terms and conditions of the sale agreements entered into with KRM, and in line with its strategy of pursuing kimberlite opportunities, Gem Diamonds maintains a right, at no cost, to an initial 65% interest in any economic kimberlite that may be discovered on the concessions currently owned by these DRC companies. In addition, Gem Diamonds will be entitled to a 3% royalty on the revenue from any diamonds extracted from any kimberlite discovery on such concessions.

For further information:
Gem Diamonds Limited

Clifford Elphick, Chief Executive Officer
Glenn Turner, Chief Commercial and Legal Officer
Tel: +44 (0) 203 043 0280

Richard Chetwode, Investor Relations
Tel: +44 (0) 203 043 0280
Mob: +44 (0) 759 0064 883

Gem Diamond Technical Services

Sherryn Tedder, Corporate Affairs
Tel: +27 (0)11 560 9600
Mob: +27 (0) 83 943 4505

Pelham Bell Pottinger

James MacFarlane/ Charles Vivian
Tel: +44 (0) 20 7861 3232