Acquisition of ARR

Paragon Diamonds Limited

("Paragon" or the "Company")

(AIM: PRG)

Acquisition of African Rock Resources Ltd

Paragon Diamonds Limited, the African focused diamond development and production company today announces it has acquired the entire issued share capital of African Rock Resources Limited, (the "Acquisition") in accordance with paragraph 11.5 of part X the AIM Admission Document dated 22 October 2010. The Mabuki Diamond Licence (PL 4806/2007) has been renewed for a period of two years expiring in October 2012.

Issue of Equity

The consideration was settled by way of issuing 12,500,000 new ordinary shares in the Company that will rank pari passu with all existing ordinary shares, dealings on AIM are expected to commence in the new ordinary shares on 30 December 2010.

Following the issue of the new ordinary shares as described above, the Company's issued share capital now consists of 142,682,819 ordinary shares of 1p each.

Director Dealings

Following the issue of the Acquisition shares Frank Scolaro (being a Director of the Company) and Simon Rollason (being a Director of Obtala Resources Ltd) will be interested in the following shareholdings:

* Frank Scolaro holds control of both Grandinex International Corp and Stockton Continental Inc and in addition is interested in 87,500,000 Ordinary shares owned by Obtala Resources Ltd, as a result of beneficially owning 32.06% of the issued share capital of such company (including his ownership through Grandinex International Corp.)

** Simon Rollason controls Gribben Enterprises Ltd

Therefore, following the issue of acquisition shares Frank Scolaro is now interested in a total of 122,147,894 ordinary shares in the Company representing 85.61% of the enlarged issued share capital.

Commenting today Stephen Grimmer, Managing Director, said: "I am pleased to announce the successful completion of the acquisition of African Rock Resources Ltd which will further increase our expanding asset portfolio. We will begin exploration work in the near future and remain confident of the Mabuki Licence potential for both hard rock and alluvial deposits"