Offer Update

Gem Diamonds Limited
03 December 2007




3rd December 2007

                              GEM DIAMONDS LIMITED
                       ('Gem Diamonds' or the 'Company')


                GEM DIAMONDS AUSTRALIA PTY LIMITED TAKEOVER BID
                           FOR KIMBERLEY REACHES 90%




Further to the announcement by Gem Diamonds on 26 November 2007 of the decision
to declare Gem Diamond Australia's takeover Offer for Kimberley Diamond Company
NL ('Kimberley') to be unconditional, Gem Diamonds confirms that as at 3
December 2007 Gem Diamond Australia, a wholly owned subsidiary of Gem Diamonds,
has a relevant interest in 93.03% of Kimberley's issued ordinary share capital.
In line with the Company's plans outlined to shareholders in the circular posted
28 September 2007, it intends to proceed with the compulsory acquisition of the
outstanding shares in Kimberley.


Gem Diamonds Australia also intends to proceed with the delisting of Kimberley's
shares from the ASX and the cancellation of Kimberley's admission to AIM. The
last day of trading in the Kimberley's shares on ASX will be determined shortly
and on AIM is expected to be 21 December 2007.


As detailed to Kimberley shareholders on 30 November 2007, Gem Diamonds
Australia elected to extend the Offer Period from the previously indicated
closing date of 1 December 2007 to 17 December 2007.


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, Letseng, 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.


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.


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