Director Subscription

25 November 2013 Paragon Diamonds Limited ("Paragon" or the "Company") (AIM: PRG) Director Subscription and grant of options Directors' Subscription Paragon is pleased to announce a conditional subscription by all three of theCompany's executive directors for an aggregate of 1,000,000 new ordinary sharesin the Company at a price of 5p per share ("Directors' Subscription") raising £50,000 for the Company. This follows the subscription by Lanstead Capital L.P.announced on 15 November 2013, also at 5p, which raised £3,000,000 beforeexpenses for the Company. . Martin Doyle, executive chairman, intends to subscribe for 300,000 shares,Stephen Grimmer, managing director, for 400,000 shares and Simon Retter,finance director, for 300,000 shares. Following the Directors' Subscription,their interests in the Company will be as follows: Martin Doyle 700,000 ordinary shares (0.2 per cent.) Stephen Grimmer 600,000 ordinary shares (0.2 per cent.) Simon Retter 817,258 ordinary shares (0.3 per cent.) The mid-market price of the ordinary shares at the close of business on 22November 2013 (being the latest practicable date prior to the release of thisannouncement) was 4p. The Directors' Subscription is conditional on theapproval of shareholders at a general meeting to approve the necessary increasein share authorities, notice of which will be sent to shareholders shortly, andon admission of the ordinary shares to AIM following the general meeting. Thenew ordinary shares will, when issued and fully paid, rank pari passu in allrespects with the Company's existing ordinary shares. Following the Directors'Subscription, the Company's issued share capital will comprise 289,595,917ordinary shares. The Directors' Subscription is a related party under the AIM Rules. BuddyDoyle, non-executive director, who is not participating in the Directors'Subscription, having consulted with the Company's nominated adviser, considersthat the terms of the Directors' Subscription are fair and reasonable insofaras the Company's shareholders are concerned. Grant of options The Company also announces that it has granted Buddy Doyle, a non-executivedirector of the Company, options to subscribe for 1,350,000 new ordinary sharesin the Company in three equal tranches at exercise prices of 7, 8 and 9 penceper share. The terms are in line with the previous options granted to theExecutive Directors. For further information: Paragon Diamonds Limited +44 (0) 20 7099 1940Martin Doyle - ChairmanSimon Retter - Finance Director www.paragondiamonds.com Sanlam Securities UK Limited(Nominated Adviser and Broker) +44 (0) 20 7628 2200Lindsay MairCatherine Miles Notes to editors Paragon Diamonds is looking to rapidly develop producing and explorationdiamond properties located within Africa. To date it has secured a series ofpotentially high value assets which its exploration and development teams areworking to progress. The core focus at present is the Company's hard rocklicences located in Lesotho, a major producing diamond region. The Company'sprojects include: Lemphane Kimberlite project, Lesotho (85% interest) Lemphane is one of five known diamond bearing kimberlite pipes within Lesotho,located 5km from the Liqhobong project. The environmental assessment plan,access routes and exploration camp have been completed. DMS plant has beenconstructed and bulk sampling commenced with 15,000 tonnes processed to dateand 20,000 tonnes stockpiled awaiting processing. Extended bulk sampling of afurther 25,000 - 40,000 tonnes is possible once initial sample is completed.Mining licence application submitted and drilling underway. Motete Dyke exploration, Lesotho (85% interest) Motete is a substantial kimberlite dyke (fissure system) in close proximity tothe Lemphane project. The licence was awarded in December 2011. During 2012 aresource of 0.86Mct attributable to Paragon at a grade of 65 cpht and anaverage value of US$62/ct was defined. Kaplamp diamond hosting Lamproite, Zambia Kaplamp is a large prospecting licence known to host 14 Lamproite pipes withina known diamondiferous region and with five high profile targets identified forinitial evaluation. The area is highly prospective as De Beers recoveredsignificant amount of stones in 60's and 70's but relinquished area asLamproites were not yet recognised as viable. The Argyle Diamond Mine inWestern Australia is the most renowned Lamproite hosted mine - in 1994 produced39% of worlds diamond production. Kopje kimberlite exploration, Botswana This newly awarded prospecting licence covering 15 km sq in highly prospectivearea 35 km east of DeBeers' large producing Orapa Mine. Mabuki, Tanzania Located 81km south of Mwanza, Tanzania with good infrastructure nearby (roads,power, water, transport) the licence sits within a known Kimberlite Field.Artisanal activity occurs to the west of licence with diamond bearing gravelsidentified off the edge of the licence. The intention is to explore (detailedgeophysics and sampling) and map-out, then establish drill targets and define aresource. Wardell Armstrong completed a competent persons report on Tanzania inSeptember 2010.