2012 REVISED RESOURCE AND RESERVE STATEMENT

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25 Jul 2012

Gem Diamonds Limited (LSE: GEMD) has released a revised Resource and Reserve statement, which is available on the Company's website www.gemdiamonds.com

Key Comments on the 2012 Summary Resource Statement:

  • The total resource base in carats has been maintained at circa 29 million carats
  • The Indicated portion of the total carat resource has been maintained at 62%
  • The Letšeng resource base (carats) has increased by 10% due to higher resource grade estimates
  • The Letšeng revenue (US$ per carat) estimate has increased by 5% to an overall value of US$2839 per carat
  • The Ellendale resource base in carats has reduced by 15% to 3.98 million carats
  • The overall (including E4) Ellendale revenue (US$ per carat) estimate has increased by 16%. The Indicated resource (predominantly the E9 orebody) revenue estimate has increased by 54%
  • The Ghaghoo resource base (carats) remains unchanged at 20.53 million carats
  • The Ghaghoo revenue estimate has increased by 16% to an overall value of US$259 per carat

Reserves:

  • Improved performance in terms of reduced diamond damage for Letšeng's plant 3 has been revised up to a 9% increase in Letšeng's revenue compared to 5% in the 2011 reserve statement.
  • An increase in diamond liberation for Letšeng's plant 3 is expected to add a further 4% increase in Letšeng's revenue which had not been included in the 2011 reserve statement.
For further information:
Gem Diamonds Limited

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

Kim O'Farrell, Public and Media Relations
Tel: +44 (0) 203 043 2080
Mob: +44 (0) 776 506 1316

Pelham Bell Pottinger

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

About Gem Diamonds:

Gem Diamonds is a leading global diamond producer with a focus on high value diamonds. Its production portfolio comprises kimberlite and lamproite mines in Lesotho and Australia, and a mine development project in Botswana. Both production mines are world-leaders in production of the highest quality, highest value gems: remarkable whites from the Letšeng mine in Lesotho; fancy yellow diamonds from Ellendale in Australia. This production positions the Company strongly in a segment of the market expected to generate attractive returns over the long term.

Gem Diamonds has a clear and consistent growth strategy, based on development of its existing assets and carefully targeted acquisition. The strategy has been implemented with a view to capitalising on the steady improvement in the diamond market seen during 2010-11 and the supply demand dynamics which are expected to continue for the foreseeable future.