4 May 2016

GEM DIAMONDS LIMITED

('Gem Diamonds' or the 'Company')

Persons Discharging Managerial Responsibilities ('PDMR') - Sale of Shares

Having been given permission to deal and in accordance with DTR 3.1.3, Gem Diamonds received notification that Haile Mphusu, Managing Director of Gem Diamonds Botswana PTY Ltd, a subsidiary of the Company, having exercised 5,000 options of the 2007 Executive Share Option Plan award, sold 1,250 Ordinary Shares of US$ 0.01 each, at a price of £1.32 on 4 May 2016 to cover tax obligations arising therefrom. Following the sale of shares Mr Mphusu owns 3,750 Ordinary Shares of US$ 0.01 each relating to this award.

For further information:

Gem Diamonds Limited

Juliet Kirk, Assistant Company Secretary

Tel: +44 (0) 203 043 0280

Bell Pottinger

Daniel Thöle / Anna Legge

Tel: +44 (0) 203 772 2500

About Gem Diamonds:

Gem Diamonds is a leading global diamond producer of high value diamonds. The company owns 70% of the Letšeng mine in Lesotho and 100% of the Ghaghoo mine 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.

Gem Diamonds has a growth strategy based on the expansion of the Letšeng mine and bringing the Ghaghoo mine into production, while maintaining its strong balance sheet. 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