Notification of Trading Update

26 July 2012

GEM DIAMONDS LIMITED

("Gem Diamonds" or the "Company")

NOTIFICATION OF TRADING UPDATE

Gem Diamonds Limited (LSE: GEMD) would like to announce that it will be releasing its Trading Update for the half year period, 1 January to 30 June 2012, (H1 2012) at 7am on Monday 30 July 2012.

For further information:Gem Diamonds Limited

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 MacFarlane/ Charles VivianTel: +44 (0) 20 7861 3232

About Gem Diamonds:

Gem Diamonds is a leading global diamond producer of high value diamonds. The company owns two producing mines, the Letšeng mine in Lesotho and the Ellendale mine in Australia, as well as the Ghaghoo mine, currently in development 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. Since Gem Diamonds' acquisition of Letšeng in 2006, the mine has produced four of the twenty largest white gem quality diamonds ever recorded.

Gem Diamonds has a growth strategy based on the expansion of the Letšeng mine to double its production capacity and to develop the Ghaghoo mine. 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