Exercise of Over-Allotment

Gem Diamonds Limited
23 February 2007


The information contained herein is restricted and is not for publication,
release or distribution, directly or indirectly, in or into the United States,
Australia, Canada or Japan or to residents or citizens of Australia, Canada or
Japan.


The information contained herein does not amount to, nor should it be construed
as, an 'offer to the public' in relation to South African residents.



23 February 2007


                             Gem Diamonds Limited
                       ('Gem Diamonds' or the 'Company')

              Announcement of Exercise of Over-Allotment Option


Gem Diamonds announces that, in connection with its initial public offering of
ordinary shares, (the 'Global Offer'), JPMorgan Cazenove Limited, as stabilising
manager and on behalf of the underwriter of the Global Offer, has today given
notice to exercise in full the over-allotment option in respect of 4.1m new
ordinary shares at the offer price of 950 pence per ordinary share, raising
additional gross proceeds for the Company of approximately £39 million.


Including the exercise of the over-allotment option, the Company now has in
issue 61,965,209 ordinary shares.


ENQUIRIES

Gem Diamonds Limited
Graham Wheelock                    Tel: [phone]
Kevin Burford                      Tel: [phone]
Angela Parr                        Tel: [phone]


JPMorgan Cazenove                  Tel: [phone]
Ian Hannam
Neil Passmore


Merlin                             Tel: [phone]
David Simonson
Bridget Fury



This announcement has been prepared and issued by Gem Diamonds Limited and is
the sole responsibility of Gem Diamonds Limited.


This announcement may not be distributed, directly or indirectly, in or into the
United States, Canada, Australia or Japan. This announcement does not constitute
or form part of an offer to sell or issue, or any solicitation of an offer to
buy or subscribe for, any securities referred to herein in the United States or
in any other jurisdiction.  The Offer and the distribution of this announcement
and other information in connection with the Offer in certain jurisdictions may
be restricted by law and persons into whose possession any document or other
information referred to herein comes should inform themselves about and observe
any such restriction. Any failure to comply with these restrictions may
constitute a violation of the securities laws of any such jurisdiction.


This announcement does not amount to, nor should it be construed as, an 'offer
to the public' in relation to South African residents.


The securities mentioned herein have not been, and will not be, registered under
the U.S. Securities Act of 1933 as amended (the 'Securities Act'), and may not
be offered or sold in the United States (as such term is defined in Regulation S
under the Securities Act) unless they are registered under the Securities Act or
pursuant to an exemption from the registration requirements of the Securities
Act. No public offer of the Shares is being made in the United Statesor
elsewhere.


JPMorgan Cazenove is acting exclusively for Gem Diamonds Limited and no one else
in relation to the Global Offer and will not be responsible to any other person
for providing the protections afforded to their respective clients or for
providing advice in relation to the Global Offer.






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