PRG.L Regulatory News (PRG)

18 July 2013 Paragon Diamonds Limited ("Paragon" or the "Company") (AIM: PRG) Issue of Equity Paragon Diamonds Limited, the African-focused diamond development company,announces that, in connection with the subscription previously announced on 29May 2013, it has issued, conditional on admission, a total of 5,300,000 newordinary shares ("Ordinary Shares") in the Company following approval ofauthority to issue new shares obtained from its shareholders at its recentAnnual General Meeting. 2,800,000 new ordinary shares have been issued in relation the second trancheof shares, referred to as the "Second Subscription" in the announcement on 29May 2013. In addition, the Company has issued 2,500,000 new ordinary shares to LansteadCapital L.P. in connection with the value payment for entering into the EquitySwap Agreement. The Ordinary Shares will, when issued and fully paid, rank pari passu in allrespects with the Company's existing ordinary shares. Application will be madefor the 5,300,000 Ordinary Shares to be admitted to trading on AIM. Admissionis expected to become effective and dealings are expected to commence on AIM on23 July 2013. Following the issue of the Ordinary Shares the Company will have228,595,917 ordinary shares in issue. For further information: Paragon Diamonds Limited +44 (0) 20 7099 1940 Martin Doyle - Chairman Simon Retter - Finance Director www.paragondiamonds.com Sanlam Securities UK (Nominated Adviser & +44 (0) 20 7628 2200Broker) Lindsay Mair Catherine Miles Notes to editors Paragon Diamonds is looking to rapidly develop producing and explorationdiamond properties located within Africa. To date it has secured a series ofpotentially high value assets which its exploration and development teams areworking to progress. The core focus at present is the Company's hard rocklicences located in Lesotho, a major producing diamond region. The Company'sprojects include: Lemphane Kimberlite project,Lesotho (85% interest) Lemphane is one of five known diamond bearing kimberlite pipes within Lesotho,located 5km from the Liqhobong project. The environmental assessment plan,access routes and exploration camp have been completed. DMS plant has beenconstructed and bulk sampling commenced with 15,000 tonnes processed to dateand 20,000 tonnes stockpiled awaiting processing. Extended bulk sampling of afurther 25,000 - 40,000 tonnes is possible once initial sample is completed.Mining licence application submitted and drilling underway. Motete Dyke exploration, Lesotho (85% interest) Motete is a substantial kimberlite dyke (fissure system) in close proximity tothe Lemphane project. The licence was awarded in December 2011. During 2012 aresource of 0.86Mct attributable to Paragon at a grade of 65 cpht and anaverage value of US$62/ct was defined. Kaplamp diamond hosting Lamproite, Zambia Kaplamp is a large prospecting licence known to host 14 Lamproite pipes withina known diamondiferous region and with five high profile targets identified forinitial evaluation. The area is highly prospective as De Beers recoveredsignificant amount of stones in 60's and 70's but relinquished area asLamproites were not yet recognised as viable. The Argyle Diamond Mine inWestern Australia is the most renowned Lamproite hosted mine - in 1994 produced39% of worlds diamond production. Kopje kimberlite exploration, Botswana This newly awarded prospecting licence covering 15 km sq in highly prospectivearea 35 km east of DeBeers' large producing Orapa Mine. Mabuki, Tanzania Located 81km south of Mwanza, Tanzania with good infrastructure nearby (roads,power, water, transport) the licence sits within a known Kimberlite Field.Artisanal activity occurs to the west of licence with diamond bearing gravelsidentified off the edge of the licence. The intention is to explore (detailedgeophysics and sampling) and map-out, then establish drill targets and define aresource. Wardell Armstrong completed a competent persons report on Tanzania inSeptember 2010.