Gem Diamonds Di Regulatory News (GEMD)

1. Identity of the issuer or the underlying issuerof existing shares to which voting rights areattached: ii

Gem Diamonds Limited

2 Reason for the notification (please tick the appropriate box or boxes):

An acquisition or disposal of voting rights

X

An acquisition or disposal of qualifying financial instruments which may result in the acquisition of shares already issued to which voting rights are attached

An acquisition or disposal of instruments with similar economic effect to qualifying financial instruments

An event changing the breakdown of voting rights

Other (please specify):

3. Full name of person(s) subject to thenotification obligation: iii

Mr. Laurence Graff and companies controlled by him.

4. Full name of shareholder(s)  (if different from 3.):iv

Hanover Nominees Limited

Brooks Macdonald Services Nominees Limited

Graff Investments Limited

5. Date of the transaction and date onwhich the threshold is crossed orreached: v

20 and 21 October 2011

6. Date on which issuer notified:

24 October 2011

7. Threshold(s) that is/are crossed orreached: vi, vii

13 & 14 %

8. Notified details:

A: Voting rights attached to shares viii, ix

Class/type ofshares

if possible usingthe ISIN CODE

Situation previousto the triggeringtransaction

Resulting situation after the triggering transaction

NumberofShares

NumberofVotingRights

Numberof shares

Number of votingrights

% of voting rights x

Direct

Direct xi

Indirect xii

Direct

Indirect

17,469,028

17,469,028

19,446,395

14.06%

VGG379591065

Ords US$0.01 each

B: Qualifying Financial Instruments

Resulting situation after the triggering transaction

Type of financialinstrument

Expirationdate xiii

Exercise/Conversion Period xiv

Number of votingrights that may beacquired if theinstrument isexercised/ converted.

% of votingrights

C: Financial Instruments with similar economic effect to Qualifying Financial Instruments xv, xvi

Resulting situation after the triggering transaction

Type of financialinstrument

Exercise price

Expiration date xvii

Exercise/Conversion period xviii

Number of voting rights instrument refers to

% of voting rights xix, xx

Nominal

Delta

Total (A+B+C)

Number of voting rights

Percentage of voting rights

19,446,395

14.06%

9. Chain of controlled undertakings through which the voting rights and/or thefinancial instruments are effectively held, if applicable: xxi

14,162,092 shares are held by Graff Investments Limited, a wholly owned subsidiary of Graff Diamonds International Limited which is ultimately controlled by Mr. Laurence Graff.

5,239,535 shares are held by Hanover Nominees Limited on behalf of Graff Investments Limited, a wholly owned subsidiary of Graff Diamonds International Limited which is ultimately controlled by Mr. Laurence Graff.

44,768 shares are held by Brooks Macdonald Services Nominees Limited as part of a pension plan controlled by Mr. Laurence Graff.

Proxy Voting:

10. Name of the proxy holder:

11. Number of voting rights proxy holder will ceaseto hold:

12. Date on which proxy holder will cease to holdvoting rights:

13. Additional information:

14. Contact name:

Andre Confavreux, Company Secretary, Gem Diamonds

15. Contact telephone number:

+44 (0) 203 043 0280