Notice of Q4 2011 Trading Update

18 January 2012

GEM DIAMONDS LIMITED

("Gem Diamonds" or the "Company")

NOTIFICATION OF Q4 2011 TRADING UPDATE

Gem Diamonds Limited (LSE: GEMD) will be reporting its Trading Update for the fourth quarter period, 1 October 2011 to 31 December 2011 (Q4 2011) at 7am on Thursday 26th January 2011.

For further information:Gem Diamonds Limited

Glenn Turner, Chief Commercial and Legal OfficerTel: +44 (0) 203 043 0280

Sherryn Tedder, Investor RelationsTel: +27 (0) 11 560 9600Mob: +27 (0) 83 943 4505

Kim O'Farrell, Public and Media RelationsTel: +44 (0) 203 043 2080

Mob: +44 (0) 776 506 1316

Pelham Bell PottingerJames Henderson/James MacFarlaneTel: +44 (0) 20 7861 3232

About Gem Diamonds:

Gem Diamonds is a leading global diamond producer with a focus on high value diamonds. Its production portfolio comprises kimberlite and lamproite mines in Lesotho and Australia, and a mine development project in Botswana. Both production mines are world-leaders in production of the highest quality, highest value gems: remarkable whites from the Letšeng mine in Lesotho; fancy yellow diamonds from Ellendale in Australia. This production positions the Company strongly in a segment of the market expected to generate attractive returns over the long term.

Gem Diamonds has a clear and consistent growth strategy, based on development of its existing assets and carefully targeted acquisition. The strategy has been implemented with a view to capitalising on the steady improvement in the diamond market seen during 2010-11 and the supply demand dynamics which are expected to continue for the foreseeable future.

www.gemdiamonds.com