REMARKABLE 493 CARAT LETŠENG LEGACY DIAMOND SOLD FOR US$10.4 MILLION

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14 Nov 2007

  • The Letšeng Legacy is the world's 18th largest diamond ever recovered
  • The diamond was recovered at Letšeng le Terai Mine in Lesotho on the 7th of September 2007
  • The sale of the Letšeng Legacy was by way of tender in Antwerp, where eleven diamantaires bid for the stone
  • The price represents an extraordinary price per carat of US$21 000, against a global average diamond price of US$81 per carat
  • The Letšeng Legacy is expected to yield an historic polished stone of over 100 carats

Gem Diamonds Limited (Gem Diamonds) and the Government of the Kingdom of Lesotho are pleased to announce the sale of the Letšeng Legacy, a remarkable 493 carat diamond, in Antwerp for US$10.4 million.

The world's leading diamantaires participated in the tender and the winning bid was made by SAFDICO, the manufacturing arm of Graff Jewellers. Graff Jewellers are one of the world's leading diamond jewellery purveyors and were the winning bidder for the Lesotho Promise diamond in 2006. There were also strong bids from Rosy Blue and Premier Diamonds.

The Letšeng Legacy ranks as the 18th largest diamond ever found and was named to reflect the growing legacy that the Letšeng le Terai Mine is creating as a producer of significant diamonds. Letšeng Diamonds, which is 70% owned by Gem Diamonds and 30% owned by the Government of the Kingdom of Lesotho, has now produced three of the world's top 20 diamonds. Two of these were recovered in the last 13 months - the 603 carat Lesotho Promise in August 2006 and this 493 carat diamond in September 2007.

Following the opening of the tender offers, the winning bid of US$10.4 million was announced by Lesotho's Minister of Forestry and Land Reclamation Ralechate Lincon Mokose at the Antwerp World Diamond Centre at an event attended by Gem Diamonds management and directors, the Lesotho Ambassadors to Belgium and Germany MaMoruti Tiheli and Makase Nyaphisi, Johnny Kneller of the winning bidder SAFDICO and leading figures from the Antwerp diamond community including Freddy Hanard of the Antwerp World Diamond Council.

Clifford Elphick, CEO of Gem Diamonds said:

"The sale of the Letšeng Legacy at this impressive price is a reflection of the rarity of the remarkable diamonds that the Letšeng Mine is producing. The market for extraordinary diamonds continues to grow which bodes well for Letšeng´s success as production doubles during the course of 2008. We look forward to sharing this success with our partners the Government of Lesotho."

Johnny Kneller , the CEO of the northern hemisphere of SAFDICO commented:

"We are very pleased to have once again made the winning bid for such an historic diamond. To have acquired the Letšeng Legacy as well as the Lesotho Promise is a great achievement for SAFDICO and Mr. Graff. "

For further information:
Gem Diamonds Limited

Clifford Elphick
Tel: +44 203 043 0280

Gem Diamond Technical Services (Pty) Limited

Angela Parr
Mob: +27 83 578 3885

Pelham PR

Candice Sgroi
Tel: +44 207 743 6376
Mob: +44 7894 462 114

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, and which was approved by Gem Diamonds' shareholders at an Extraordinary General Meeting on 16 October 2007.

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.