DIRECTOR'S DEALING OF SHARES

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28 Sep 2008

Gem Diamonds, LSE: GEMD, the FTSE 250 listed diamond producer, announces that it was notified by Mr Alan Ashworth, a Director and Chief Operations Officer of the Company, that he purchased 10,000 ordinary shares at an average price of 236.33 pence per share for a total consideration of £23,834.74 on the 27th October, 2008. His holding of ordinary shares in the Company is now 10,000 shares, representing approximately 0.02% of the Company's issued share capital.

For further information:
Gem Diamonds Limited

Richard Chetwode
Tel: +44 203 043 0290

Gem Diamond Technical Services

Angela Parr
Tel: +27 11 560 9600

Pelham PR

Candice Sgroi
Tel: +44 207 743 6376
James Henderson
Tel: +44 207 743 6673

About Gem Diamonds:

Gem Diamonds Limited (LSE: GEMD) is a global diamond company that is pursuing an accelerated growth strategy through targeted acquisitions and the development of existing assets.

The Company's portfolio comprises producing kimberlite, lamproite and alluvial mines, development projects, exploration assets as well as a diamond beneficiation centre. Operations are situated in Angola, Australia, Botswana, the Central African Republic, the Democratic Republic of Congo, Dubai, Lesotho and Indonesia.

Gem Diamonds has a specific focus towards higher value diamonds, a segment of the market expected to deliver superior long term returns. The Company produces some of the world's most remarkable white diamonds from its Letšeng mine and rare fancy yellow diamonds from itsEllendale mine and an array of coloured diamonds from its Cempaka mine.

Established in July 2005, Gem Diamonds listed on the main board of the London Stock Exchange in February 2007 raising US$635 million and it had US$144 million of cash on its balance sheet at the end of June 2008.