12.47CT BLUE DIAMOND ACHIEVES RECORD PRICE

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11 Oct 2013

Gem Diamonds Limited (LSE: GEMD), is pleased to announce the sale on tender of a rare 12.47 carat blue diamond and an 82 carat exceptional quality white diamond, both recovered at its Letšeng mine. (The recovery of these two diamonds was announced on 30 September 2013).

The 12.47 carat blue diamond fetched a record price for the Letšeng mine of US$ 603,047 per carat, a total of US$ 7.5 million. The 82 carat white diamond fetched US$ 59,173 per carat, a total of US$ 4.8 million.

Gem Diamonds CEO, Clifford Elphick stated:

"Letšeng continues to achieve such outstanding prices for its exceptional diamonds and we continue to expect recovery of such high quality diamonds as mining at Letšeng continues to focus more on the higher grade, higher value Satellite pipe towards the end of 2013 and into 2014."

For further information:
Gem Diamonds Limited

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

Pelham Bell Pottinger

Charles Vivian / James MacFarlane
Tel: +44 (0) 207 861 3232

About Gem Diamonds:

Gem Diamonds is a leading producer of high value diamonds. The Company owns 70% of the Letšeng mine in Lesotho as well as the Ghaghoo mine, currently in development in Botswana. The Letšeng mine is famous for the production of large, top colour, exceptional white diamonds, making it the highest dollar per carat kimberlite diamond mine in the world. Since Gem Diamonds’ acquisition of Letšeng in 2006, the mine has produced four of the top twenty largest white gem quality diamonds recorded.

Gem Diamonds has a growth strategy based on the expansion of the Letšeng mine and the development of the Ghaghoo mine, while maintaining its strong balance sheet. The Company seeks to maximise revenue and margin from its rough diamond production by pursuing cutting, polishing and sales and marketing initiatives further along the diamond value chain. With favourable supply/demand dynamics expected to benefit the diamond industry over the medium to long term, particularly at the high end of the market, this strategy positions the Company well to generate attractive returns for shareholders in the coming years.

www.gemdiamonds.com