GEM DIAMONDS' GOPE PROJECT IN BOTSWANA HAS SUSPENSION OF RETENTION LICENSE LIFTED

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25 Oct 2007

  • Suspension of Gope Retention License lifted
  • Feasibility Study and Environmental Impact Assessment to be updated
  • All interested and affected parties to be consulted

Gope Exploration Company (Pty) Limited (Gope), a 100% held subsidiary of Gem Diamonds Limited (Gem Diamonds), today announces that the Government of the Republic of Botswana has lifted the suspension of the Retention License over the Gope area.

Work has begun on the updating of the Feasibility Study, which was completed in 1998. The Environmental Impact Assessment (EIA) and subsequent Environmental Management Plan will commence shortly. As part of the EIA process all interested and affected parties will be consulted by Gope's independent advisors Marsh Vikela (Pty) Limited. Should the findings of this updated Feasibility Study prove positive, an application for a Mining License will be made in due course.

For further information:
Gem Diamonds Limited

Clifford Elphick
Tel: +44 203 043 0280

Gem Diamond Technical Services (Pty) Limited

Angela Parr
Tel: +27 11 560 9600

Pelham PR

Candice Sgroi
Tel: +44 207 743 6376

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.

About Gope

Gope was formed in 1985 when exploration work over the area first commenced. Work on Gope was subsequently adjourned until the mid 1990's when a pre feasibility study was undertaken. A feasibility study was concluded thereafter.

Gope currently holds a Retention License over the concession area which is located in the Central Kalahari Game Reserve (CKGR) in central Botswana. The Gope Retention License area is 35km2 relative to the size of the reserve which is 52, 800km2. The Government of the Republic of Botswana has indicated its intention to allow mining in the CKGR.