Shefa Gems Regulatory News (SEFA)

24 January 2020

Shefa Gems Ltd.

("Shefa Gems" or the "Company")

Convertible Loan Agreement

Shefa Gems (LSE: SEFA), a company focused on advanced exploration and development of multi-gemstone projects in Northern Israel, is pleased to announce that it has entered into a convertible loan agreement for the provision of €200,000 (approximately £170,581) (the "Agreement") with an investor ("the Lender") for working capital purposes and to fund the continued development of its Kishon Mid-Reach Project.

Terms of the Loan

Pursuant to the Agreement, the Lender has agreed to provide a convertible loan for €200,000 (approximately £170,581) (the "Loan"). The Loan, together with rolled up interest at 5%, is convertible into ordinary shares of the Company at a share price of 5 pence per share. The Loan will be available for the Company in two tranches. The first tranche of €100,000 is due immediately and the second tranche of €100,000 will be available upon receipt by the Company of the Certificate of Discovery from the Inspector of Mines. The Loan will be non-transferable. The Loan will be repayable by 19 January 2022.

The loan is also guaranteed by a personal guarantee given by the Company's CFO Mr. David Ben David.

As security for the Loan, following the second drawdown, the Lender will be issued with 3,411,620 new ordinary shares in the Company ("New Ordinary Shares"). These New Ordinary Shares will be issued to the Lender [but held as security by the Company during the Term of the Loan, ] with the intention that the Company will buy back the shares within 24 months at 5 pence per share in full repayment of the Loan.

In the event the Lender elects to keep the New Ordinary Shares, the Company will grant the Lender one unlisted warrant for every share received, exercisable for a period of 24 months from the date of the election, at a price of 10 pence per warrant.

The Loan Agreement contains a provision that in the event that the Lender sells any of the New Ordinary Shares issued to the Lender, the Company's obligation to repurchase the shares from the Lender will be canceled.

Michael Rosenberg, OBE, Chairman of Shefa Gems commented "I am delighted to welcome this new investor in Shefa Gems who shares our belief and enthusiasm in this unique precious gems mining opportunity in the Kishon Mid Reach, Northern Israel".

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Notes to Editors

About Shefa Gems Ltd

Shefa Gems Ltd (LSE: SEFA) is a multi-commodity explorer of precious stones operating in Northern Israel. Exploration activity is managed by professionally skilled and technically competent personnel and is accompanied by an international team of geological experts with decades of proven experience in their fields.

All exploration activities are conducted under international standards and the internationally recognised SAMREC 2016 Code. Furthermore, its four (4) permits, granted to it by the Inspector of Mines, Ministry of Energy, Natural Resources Administration, Israel, extend over an area of approximately 600,000 Dunam (60,000 hectares) that includes the Kishon River, the volcanic bodies on Mount Carmel, the Zevulun and Yizre'el valleys and their margins - Menashe Hills, Tivon-Alonim Hills, and Nazareth range. The Company upholds environmental values and protects the nature in the areas where it operates, cooperating fully with all authorities.

Alongside its exploration activities, the Company is building on the launch of the "Heaven on Earth" jewellery collection and developing the Company's "Mine to Market" strategy to promote unique jewellery collections utilising Shefa Gems' suite of precious gemstones.

The exclusive "Heaven on Earth" collection is now available to view online on the website of the designer Yossi Harari at: https://www.yossiharari.com/collections/heaven-on-earth-1

For further information please visit the website at www.shefagems.com