Botswana Diam Regulatory News (BOD)

16 December 2011

Botswana Diamonds PLC

("Botswana Diamonds" or the "Company")

Preliminary Results for the Period Ended 30th June 2011

Highlights:

·; Admitted to AIM in February 2011

·; Board strengthened with the addition of two members with extensive diamond expertise

·; Cooperation with new partners to explore in Botswana

·; Cameroon acreage shows potential as new mine being developed on adjacent licence

·; Active programme planned across all regions in the coming year

·; Diamond market remains strong

John Teeling, Chairman, commented:

"The dynamics of the diamond business are improving with demand growing at over 6% a year and supply flat. We are in the best locations to find new mines. We will apply new technology on our existing licences and new ground in Botswana while a sampling programme will commence in early 2012 on our palaeoplacers discovery in Cameroon."

Enquiries:

Botswana Diamonds PLC

John Teeling, Chairman +353 1 833 2833

Andre Fourie +27 83 463 2455

Westhouse Securities Limited

Tim Feather +44 (0)20 7601 6100

Richard Baty

College Hill

Nick Elwes +44 (0)20 7457 2020

Pembroke Communications

David O'Siochain +353 1 649 6486

www.botswanadiamonds.co.uk

Statement Accompanying the Preliminary Results

Botswana Diamonds plc ("Botswana Diamonds" or the "Company") is a diamond explorer active in Botswana, Cameroon and Zimbabwe. The Company was admitted to AIM in February 2011 having been spun out of African Diamonds plc, on its sale to Lucara Diamonds Corp. The new company contains the former exploration interests of African Diamonds and the spin out was on the basis of one share-for-one share. The Company is managed by many of the team responsible for the AK6 diamond discovery in Botswana, now known as Karowe, which is coming on stream as a high value one million carat a year mine in Q1 2012. On admission to AIM we strengthened our board by the addition of Andre Fourie, a former senior De Beers executive, as Technical Director, and subsequently we added further expertise with the addition of Robert Bouquet as Commercial Director. Robert is a widely experienced diamond market specialist.

The fundamentals of the diamond business are improving. Demand is expected to grow at over 6% a year while supply growth will be less than half of that. Demand growth is focused on Asia and within a few years China, India and Korea will dominate world demand. The supply side is more restricted because diamonds are hard to find. There are only seventeen kimberlite diamond mines in the world and there is a lack of new discoveries. There is an expectation of a growing supply gap from 2015 onwards. This augurs well for prices which rebounded in 2010 and 2011 to peaks above those seen in 2008.

The Botswana Diamonds' approach to exploration is simple, but rigorous - go where the geology is best, go where there are or were mines and remember that you cannot find a mine in an office. These rules dictate low overheads and an acceptance of political risk in return for better geological opportunities. Our focus is Botswana, the best diamond address in the world and home to some of the world's greatest mines such as Jwaneng and Orapa. Botswana, which is the largest diamond producer by value in the world, is a landlocked country with a small population of 1.7 million, excellent infrastructure, a stable government, a strong economy and clear mining / foreign investment rules. It is known as the Switzerland of Africa. The centre of the diamond industry is the Orapa region where there are four, soon to be five hardrock mines. Botswana Diamonds is focused on this area where we have existing licences and we are applying for additional ground.

In 2011 we conducted extensive bulk sampling on two diamondiferous kimberlites, AK8 and BK5. The objective was to upgrade previous work, to define grade and value per carat. This would feed into a scoping study estimating the commerciality of an open cast mining operation to supply one of the existing ore processing facilities. Neither kimberlite produced the necessary results. AK9, the third kimberlite with existing prospecting results, is proving enigmatic. It has a thick basalt cover which could have diluted earlier drilling results. We continue to evaluate options. We have a licence in the northern part of Orapa on which we have discovered known diamond indicator minerals, but we have not yet identified the source. This area will be explored in 2012.

We believe there are more diamond mines to be found in Botswana and we are in advanced negotiations to partner with a group who have new technologies and approaches. The objective of the joint work is to identify large diamondiferous kimberlite pipes with the potential to become high-volume, high-value long life mines. The initial focus of this new venture will be in North East Botswana including the Orapa area.

The second area of active exploration is in Cameroon. Cameroon, located in west central Africa, is a socially and politically stable country, blessed with extensive natural resources. Having been split between the British and French states, Cameroon became a united republic in 1984. Cameroon has extensive oil and timber industries and is developing gold and iron ore industries.

Cameroon is not yet known for diamonds. Few people, if any, in the diamond industry, believed that Cameroon has geological potential for diamonds, yet a Korean company CNK Mining ("CNK"), with no history of diamond mining, is developing a mine in the Mobilong area on the border with the Central African Republic. The answer to the apparent conundrum is what are known as palaeoplacers. Palaeoplacer deposits are ancient alluvial type deposits which have cemented together over time into consolidated rock. Until recently, gold and uranium have been the only minerals commercially mined from palaeoplacers. The massive diamond discoveries in the Marange area of Zimbabwe are set in palaeoplacers. Diamond industry professionals have found it difficult to understand, never mind accept, that commercial quality gemstones can be recovered, in economic quantities, from these deposits, but they are being mined.

In Cameroon, diamonds were discovered whilst CNK worked on a palaeoplacer gold opportunity at Mobilong. On the basis of this initial discovery it obtained a mining licence and is now developing a mine which is due to come onstream in 2012. Botswana Diamonds, because of our work in Zimbabwe, understands palaeoplacer diamonds and so applied for the licence adjacent to Mobilong. A concession of over 8,000 sq kms was obtained. During 2011 we prospected the concession, identified palaeoplacer rock and obtained a Stage 2 exploration permit over 400 sq km. We believe that diamonds have been discovered and recovered by local artisans on our concession. The next phase of exploration in early 2012, is to sample the ground to confirm if it contains diamonds and, if so, the type and quality of diamonds. Equipment and people have already been sourced.

Zimbabwe, our third theatre of action, is a country of immense potential in both agriculture and natural resources. There is a well developed infrastructure and an educated workforce. Recent years has seen political uncertainty and international sanctions which have held back development. Zimbabwe has long been known for diamonds. Two hardrock kimberlite mines exist, the Murowa mine and the smaller River Ranch mine. De Beers and Rio Tinto controlled most of the diamond exploration concessions for many years. They explored for kimberlite pipes - a search continued today by Botswana Diamonds and others, but the real excitement lies in palaeoplacers.

The huge Marange deposits in the south east of the country were prospected by De Beers who discovered diamonds but thought them to be of poor industrial quality - though some of them were as large as golf balls. No development took place until recent years when Chinese, Lebanese and a South African company set up joint ventures with the state mining company, Zimbabwe Mining Development Corporation (ZMDC). Current activities are focused on mining the alluvials which have eroded from the hard conglomerate; grades of between 2,000 and 8,000 carats per hundred tonnes of ore (cpht) are being reported. Compare these grades to the mines in Lesotho which yield 1 to 2 cpht and those in the richest diamond mine on earth, Jwaneng in Botswana, grading about 100 cpht. The difference is in quality: the Marange diamonds are reputed to be worth $20-$40 a carat compared to $2,000+ a carat for Lesotho and $400 a carat for Jwaneng.

While precise figures are difficult to obtain it is thought that current output from the existing mines at Marange would place Zimbabwe in the top 3 world diamond producers by volume. Botswana Diamond directors and personnel have extensive experience in Zimbabwe. We have been seeking a way into Zimbabwe diamonds for some years and we have a joint venture between ourselves, a strong local agribusiness and ZMDC. We have put a proposal to government on a specific licence area and the application is before the President. There is no indication when, or if, the proposal will be approved.

Approximately 30 kms to the Southwest of Marange, in the Chimanimani area, some diamonds have been discovered, once again in palaeoplacers. Botswana Diamonds has an agreement with the group hoping to obtain a licence that we will act as operator to trial mine and, if viable, build and operate the mine.

In a more traditional approach to diamond exploration, Botswana Diamonds holds 80% of Metro Mining Ltd, a local Zimbabwe company holding seven claims in the southeast, although local ownership is likely to rise to 51%. There is a known 2.5ha kimberlite on the claims and it is proposed to conduct a bulk sample on this in early 2012.

Future

The business fundamentals for diamond exploration are strong and the company's strategy is clear. Diamond demand is vigorous while supply is at best stable. We are operating in the best areas to find diamonds. We have strengthened an already successful team and we are confident that there are more mines to be found in Botswana where we hope to repeat our earlier success using new technology and new insights. There is significant potential in the new palaeoplacer diamond fields. We are at the forefront of this emerging sector. We have prospective ground in Cameroon and an active programme in Zimbabwe. The coming months will see activity in all three countries. The board is confident of a bright future for Botswana Diamonds.

John Teeling

Chairman

16 December 2011

Consolidated Statement of Comprehensive Income

for the period from 22 September 2010 (Date of Incorporation) to 30 June 2011

Consolidated Balance Sheet

as at 30 June 2011

Consolidated Statement of Changes In Equity

for the period from 22 September 2010 (Date of Incorporation) to 30 June 2011

Share Premium

The Share Premium comprises of a premium arising on the issue of shares.

Share Based Payment Reserve

The share based payment reserve arises on the grant of share options under the share option plan.

Retained Deficit

Retained deficit comprises of losses incurred in the period ending 30 June 2011.

Other Reserve

Other reserve comprises of the excess of the purchase consideration over the book value of net assets acquired from African Diamonds plc at the date of acquisition.

Consolidated Cash Flow Statement

for the period from 22 September 2010 (Date of Incorporation) to 30 June 2011

NOTES:

1. ACCOUNTING POLICIES

There were no changes in accounting policies from those set out in the Group's Annual Report for period ended 30 June 2011. The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union.

2. LOSS PER SHARE

Basic loss per share is computed by dividing the loss after taxation for the period available to ordinary shareholders by the weighted average number of ordinary shares in issue and ranking for dividend during the period. Diluted earnings per share is computed by dividing the profit or loss after taxation for the period by the weighted average number of ordinary shares in issue, adjusted for the effect of all dilutive potential ordinary shares that were outstanding during the period.

The following table sets forth the computation for basic and diluted earnings per share (EPS):

The following potential ordinary shares are anti-dilutive and are therefore excluded from the weighted average number of shares for the purposes of the diluted earnings per share:

3. ACQUISITIONS

On 20 December 2010, the company completed the acquisition of all mining interests and other assets and liabilities of African Diamonds plc ("AFD") and its subsidiaries, Atlas Minerals (Botswana) (Pty) Ltd ("Atlas Minerals") and Kukama Mining & Exploration (Pty) Ltd ("Kukama Exploration"), except for African Diamond's interests in the AK6 diamond resource in Botswana. The cost of the acquisition was satisfied by the issue of shares in Botswana Diamonds plc to the African Diamonds plc shareholders on a one-for-one basis in respect of each share acquired. The fair value of the shares issued was £7,037,259.

Analysis of assets and liabilities acquired at the date of acquisition:

4. INTANGIBLE ASSETS

Exploration and evaluation assets relate to expenditure incurred in exploration for diamonds in Botswana, Zimbabwe and Cameroon. The directors are aware that by its nature there is an inherent uncertainty in exploration and evaluation assets and therefore inherent uncertainty in relation to the carrying value of capitalized exploration and evaluation assets.

The directors believe that there were no facts or circumstances indicating that the carrying value of intangible assets may exceed their recoverable amount and thus no impairment review was deemed necessary by the directors. The realisation of these intangible assets is dependent on the successful discovery and development of economic diamond resources and is subject to a number of significant potential risks, including:

- price fluctuations;

- foreign exchange risks;

- uncertainties over development and operational costs;

- political and legal risks, including arrangements with governments for licenses, profit sharing and taxation;

- foreign investment risks including increases in taxes, royalties and renegotiation of contracts;

- liquidity risks;

- funding risks;

- going concern; and

- operational and environmental risks.

Included in additions for the period are £13,075 of share based payment expenses.

5. CALLED-UP SHARE CAPITAL

Movements in share capital

On 4 October 2010, 5,000,000 1p redeemable preference shares were issued to African Diamonds plc at par value. On 22 October 2010 these shares were redeemed at par value.

On 22 December 2010 a total of 100,532,265 shares were issued to African Diamonds plc shareholders in consideration of the acquisition of the demerged assets and liabilities of African Diamonds plc. See Note 3 for further details.

Share Options

A total of 8,000,000 share options were in issue at 30 June 2011. These options are exercisable at prices ranging between 5p and 7p up to seven years from the date of granting of the options unless otherwise determined by the board.

6. GENERAL INFORMATION

The financial information set out above does not constitute the Company's financial statements for the period ended 30 June 2011. The financial statements for 2011 will be delivered to the Companies Registration Office following the Company's Annual General Meeting.

A copy of the Company's Annual Report and Accounts for 2011 will be mailed to all shareholders shortly and will also be available for collection from the Company's registered office, 162 Clontarf Road, Dublin 3, Ireland. The Annual Report may also be viewed at Botswana Diamonds PLC's website at botswanadiamonds.co.uk.