Sale of 493 Carat Diamond

Gem Diamonds Limited
14 November 2007



14 November, 2007

                              GEM DIAMONDS LIMITED

      REMARKABLE 493 CARAT LETSENG LEGACY DIAMOND SOLD FOR US$10.4 MILLION

-   The Letseng Legacy is the world's 18th largest diamond ever recovered

-   The diamond was recovered at Letseng le Terai Mine in Lesotho on the
    7th of September 2007

-   The sale of the Letseng Legacy was by way of tender in Antwerp, where
    eleven diamantaires bid for the stone

-   The price represents an extraordinary price per carat of US$21 000, against 
    a global average diamond price of US$81 per carat

-   The Letseng  Legacy is expected to yield an historic polished stone of over 
    100 carats



Gem Diamonds Limited (Gem Diamonds) and the Government of the Kingdom of Lesotho
are pleased to announce the sale of the Letseng Legacy, a remarkable 493 carat
diamond, in Antwerp for US$10.4 million.



The world's leading diamantaires participated in the tender and the winning bid
was made by SAFDICO, the manufacturing arm of Graff Jewellers.  Graff Jewellers
are one of the world's leading diamond jewellery purveyors and were the winning
bidder for the Lesotho Promise diamond in 2006.  There were also strong bids
from Rosy Blue and Premier Diamonds.



The Letseng Legacy ranks as the 18th largest diamond ever found and was named to
reflect the growing legacy that the Letseng le Terai Mine is creating as a
producer of significant diamonds.  Letseng Diamonds, which is 70% owned by Gem
Diamonds and 30% owned by the Government of the Kingdom of Lesotho, has now
produced three of the world's top 20 diamonds.  Two of these were recovered in
the last 13 months - the 603 carat Lesotho Promise in August 2006 and this 493
carat diamond in September 2007.



Following the opening of the tender offers, the winning bid of US$10.4 million
was announced by Lesotho's Minister of Forestry and Land Reclamation Ralechate
Lincon Mokose at the Antwerp World Diamond Centre at an event attended by Gem
Diamonds management and directors, the Lesotho Ambassadors to Belgium and
Germany MaMoruti Tiheli and Makase Nyaphisi, Johnny Kneller of the winning
bidder SAFDICO and leading figures from the Antwerp diamond community including
Freddy Hanard of the Antwerp World Diamond Council.



Clifford Elphick, CEO of Gem Diamonds said:

'The sale of the Letseng Legacy at this impressive price is a reflection of the
rarity of the remarkable diamonds that the Letseng Mine is producing.  The
market for extraordinary diamonds continues to grow which bodes well for Letseng
's success as production doubles during the course of 2008.  We look forward to
sharing this success with our partners the Government of Lesotho.'



Johnny Kneller , the CEO of the northern hemisphere of SAFDICO commented:

'We are very pleased to have once again made the winning bid for such an
historic diamond.  To have acquired the Letseng Legacy as well as the Lesotho
Promise is a great achievement for SAFDICO and Mr. Graff.  '




Gem Diamonds Limited
Clifford Elphick
Tel: [phone]


Gem Diamond Technical Services (Pty) Limited
Angela Parr
Mob: [phone]


Pelham PR
Candice Sgroi
Tel: [phone]
Mob: [phone]



About Gem Diamonds



Gem Diamonds is a diamond mining company with a balanced portfolio of a
producing kimberlite mine, two producing alluvial mines, development projects
and long-term prospects. Established in July 2005, Gem Diamonds is pursuing an
accelerated growth strategy and aims to become one of the world's leading
diamond companies. Gem Diamonds currently has one producing kimberlite mine, Let
seng, in Lesotho, two producing alluvial mines - Cempaka in Indonesia and
Mbelenge in the Democratic Republic of Congo (DRC), a kimberlite development
project in Botswana, two development projects in the DRC, one in the Central
African Republic and an option to develop the Chiri kimberlite concession in
Angola.



The Company recently made an offer to Kimberley Diamond Company's shareholders
to acquire their shares in this company, which owns the Ellendale Mine in north
Western Australia, and which was approved by Gem Diamonds' shareholders at an
Extraordinary General Meeting on 16 October 2007.



Gem Diamonds currently has a specific focus towards higher value diamonds, a
segment of the market that its management believes will deliver superior long
term returns.



For further information about Gem Diamonds visit www.gemdiamonds.com.






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