Kimberley Offer Update

Gem Diamonds Limited
25 October 2007

25th October, 2007



                              GEM DIAMONDS LIMITED

                       ('Gem Diamonds' or the 'Company')



                        Extension of Offer for Kimberley



Further to the announcement by Gem Diamonds on 19 July 2007 of its proposed cash
offer for 100 per cent of the issued share capital of Kimberley Diamond Company
NL ('Kimberley') (the 'Acquisition'), the Board of Gem Diamonds has elected to
extend the offer period from the previously indicated Closing Date of 2 November
2007 to 16 November 2007.



As at the close of business on 24 October 2007, Gem Diamonds Australia Pty
Limited (a 100% held subsidiary of the Company) held a relevant interest of
41.53% in Kimberley and had received acceptances in respect of a further 12.60%
of Kimberley under the Company's institutional acceptance facility.



Definitions used in this announcement shall have the meanings given to them in
the shareholder circular posted 28 September 2007, except where context requires
otherwise.



For further information:



Gem Diamonds Limited

Clifford Elphick

Tel:  [phone]



Gem Diamond Technical Services (Pty) Limited

Stephen Wetherall

Tel:  [phone]



Pelham PR

Candice Sgroi

Tel: [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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