First Stage of Fundraising Completed

10 March 2011

GEM BIOFUELS PLC

("GEM" or the "Company")

First Stage of Fund Raising Completed

Further to our announcements of 24 December 2010 and 31 January 2011, GEM BioFuels Plc (AIM: GBF), the developing energy crop plantation business, is pleased to announce that it has completed the first stage of its fund raising programme in which it has raised £412,500 before expenses. This fund raising has been completed through the issue of Convertible Loan Notes (the "Loan Notes") to a number of investors, including £212,500 to Paul Benetti, Chief Executive of GEM.

The Loan Notes in this issue are being issued under the same terms and conditions. The issue of Loan Notes to Mr Benetti is being done in satisfaction of amounts owed by the Company to him and as such the net amount of additional cash that will be injected into the Company will be £200,000.

The Loan Notes, which are unsecured and do not carry interest, are convertible into ordinary shares of 1 pence each in the Company ("Ordinary Shares") at any time until 30 June 2012 at a discount of 20% to the average mid market price of the Ordinary Shares over the 10 days prior to conversion (the "Conversion Price"). In addition, if the Company were to issue any class of shares or any securities convertible into shares, then the Loan Notes holders would be entitled to convert their Loan Notes into Ordinary Shares at a 10% discount to the price of the issue. If the issue had an aggregate value of US$500,000 or greater, then the conversion would be automatic.

Paul Benetti is deemed to be a related party for the purposes of Rule 13 of the AIM Rules for Companies. The directors of the Company, excluding Paul Benetti, having consulted with Shore Capital and Corporate Limited, the Company's nominated advisor, consider that the terms of the transaction are fair and reasonable insofar as the Company's shareholders are concerned.

Further, we remain in discussions with several potential financiers with regard to the provision of additional funds. These discussions are at various stages and we will continue to keep the market informed as further progress is achieved.

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