GEM DIAMONDS AUSTRALIA TAKEOVER BID FOR KIMBERLEY CLOSES

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18 Dec 2007

Further to the announcement by Gem Diamonds on 3 December 2007 of Gem Diamonds Australia Pty Limited's (Gem Diamonds Australia) relevant interest in 93.03% of the issued share capital of Kimberley Diamond Company NL ("Kimberley"), the Company can confirm that the Offer to acquire all issued shares in Kimberley closed yesterday, 17 December 2007, at 5.00 pm (Western Summer Time, Australia) with Gem Diamonds Australia having acquired a relevant interest in 95.96% of Kimberley.

Gem Diamonds Australia has commenced the compulsory acquisition of the remaining Kimberley shares and dispatched compulsory acqisition notices to the remaining Kimberley shareholders on 10 December 2007.

Kimberley's shares were suspended from quotation on the ASX at the close of business in Australia on 17 December 2007 and theiradmission to trading on AIM will be cancelled on 21 December 2007.

Following the completion of the acquisition of Kimberley, Gem Diamonds now controls four producing assets; the Lets?ng Mine in Lesotho, the Cempaka mine in Indonesia, the Mbelenge mine in the DRC and now the Ellendale Mine in Western Australia, renowned for its production of fancy yellow diamonds.

Definitions used in this announcement shall have the meanings given to them in the shareholder circular posted 28 September 200, except where context requires otherwise.

For further information:
Gem Diamonds Australia

Stephen Wetherall
Tel: +61 437 855 164

Pelham PR

James Henderson
Tel: +44 207 743 6673

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 longterm 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.

Pursuant to the Offer, Gem Diamonds has also recently acquired control of Kimberley Diamond Company, which owns the Ellendale Mine in Western Australia.

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.