Co-operation Agreement

Gem Diamonds Limited
20 March 2007



News Release

20 March 2007


GEM DIAMONDS CONFIRMS CO-OPERATION AGREEMENT ON ANGOLAN CHIRI CONCESSION



On 10 January 2007, Gem Diamonds Limited ('Gem Diamonds' or 'the Company'),
which joined the Main Board of the London Stock Exchange on 14 February 2007
(LSE: GEMD) entered into a conditional Co-Operation Agreement and an Option
Agreement with Avantis Angola Limited ('Avantis') (collectively 'the Parties').
In terms of these agreements the Company has an option to acquire an interest of
up to 11.25% in the Chiri Concession in Angola by way of an investment in
Avantis which currently holds a 25% interest in this concession.


Gem Diamonds today announces that all conditions precedent, including the
completion of a due diligence by the Company over the Chiri Concession and of
Avantis over the Company have been met and the Co-operation Agreement is now
unconditional.


ENDS


For further information:


Gem Diamonds Limited
Graham Wheelock
Tel: [phone]



Merlin
Bridget Fury
Tel: [phone]





About Gem Diamonds Limited (Gem Diamonds)

Gem Diamonds is a specialist diamond mining group with assets concentrated in
Africa.  The Group was founded in July 2005 by Clifford Elphick, a highly
experienced diamond mining executive, who was previously Managing Director of E
Oppenheimer & Son. Gem Diamonds has a balanced portfolio of assets, including
early stage exploration projects right through to a producing diamond mine with
strong, positive cash flow. It is the operator and owner of a majority stake in
the successful Letseng diamond mine in Lesotho, with the remainder being held by
the Government of Lesotho.  It also has interests in exploration projects in the
Longatshimo and Tshumbe-Lubembe regions of the Democratic Republic of Congo and
the Mambere River region in the Central African.


The directorate comprises Clifford Elphick as Chairman and Chief Executive
Officer, Kevin Burford as Chief Financial Officer and Graham Wheelock as Mineral
Resources Manager. Senior management includes Terry Stewart as Chief Operating
Officer and Glenn Turner as Chief Commercial and Legal Officer.


Gem Diamonds is listed on the Main Market of the London Stock Exchange and
trades under the code GEMD. At the time of this announcement the market
capitalization of the company is £604 million.







                      This information is provided by RNS
            The company news service from the London Stock Exchange