EXTENSION OF OFFER FOR KIMBERLEY

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25 Oct 2007

Further to the announcement by Gem Diamonds on 19 July 2007 of its proposed cash offer for 100 per cent of the issued share captal of Kimberley Diamond Company NL ("Kimberley") (the "Acquisition"), the Board of Gem Diamonds has elected to extend the offer period from the previously indicated Closing Date of 2 November 2007to 16 November 2007.

As at the close of business on 24 October 2007, Gem Diamonds Australia Pty Limited (a 100% held subsidiary of the Company) held a relevant interest of 41.53% in Kimberley and had received acceptances in respect of a further 12.60% of Kimberley under the Company's institutional acceptance facility.

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 Limited

Clifford Elphick
Tel: +44 203 043 0280

Gem Diamond Technical Services (Pty) Limited

Stephen Wetherall
Tel: +27 82 418 8735

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 worldʹs 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.