Gem Diamonds Di Regulatory News (GEMD)

31 August 2016

GEM DIAMONDS LIMITED

("Gem Diamonds" or the "Company")

Exercise of Options

On 30 August 2016 Gem Diamonds received notification that a former employee having exercised 8,968 options awarded to him in the Gem Diamonds Long Term Incentive Plan 2007, sold all the Ordinary Shares of US$ 0.01 each, at a price of £1.245. Following the sale of shares, the former employee no longer holds any Ordinary Shares relating to this award.

As a result of this exercise of options, the Company's issued share capital will be 138,321,884 Ordinary Shares of US$ 0.01 each, all with voting rights.

The above figure (138,321,884) may be used by shareholders as the denominator for the calculation by which they will determine if they are required to notify their interest in, or a change in their interest in, the Company under the FCA's Disclosure Guidance and Transparency Rules.

For further information:

Gem Diamonds Limited

Juliet Kirk, Assistant to the Company Secretary

Tel: +44 (0) 203 043 0280

Celicourt Communications

Joanna Boon/Mark Antelme

Tel: +44 (0) 207 520 9261

About Gem Diamonds:

Gem Diamonds is a leading global diamond producer of high value diamonds. The company owns 70% of the Letšeng mine in Lesotho and 100% of the Ghaghoo mine in Botswana. The Letšeng mine is famous for the production of large, top colour, exceptional white diamonds, making it the highest dollar per carat kimberlite diamond mine in the world.

Gem Diamonds has a growth strategy based on the expansion of the Letšeng mine and bringing the Ghaghoo mine into production, while maintaining its strong balance sheet. The Company seeks to maximise revenue and margin from its rough diamond production by pursuing cutting, polishing and sales and marketing initiatives further along the diamond value chain. With favourable supply/demand dynamics expected to benefit the industry over the medium to long term, particularly at the high end of the market supplied by Gem Diamonds, this strategy positions the Company well to generate attractive returns for shareholders in the coming years.

www.gemdiamonds.com