Issue of Equity and Directors' Shareholding

20 June 2014

Botswana Diamonds PLC

("Botswana Diamonds" or the "Company")

Issue of Equity and Directors' Shareholding

Issue of Equity

Botswana Diamonds advises that pursuant to the receipt of conversion notices from holders of the Company's 2.5 pence warrants, it has today issued 27,346,000 new ordinary shares of £0.01 each ("New Ordinary Share") at the exercise price of 2.5 pence per New Ordinary Share. Of the conversion notices received by the Company, 16,000,000 were received from three of the directors of the Company (the "Participating Directors") and the settlement of the consideration for this exercise is the capitalisation of accrued directors' fees. For the balance of 11,346,000 warrants the Company has received cash proceeds of £283,650. Further details of the Participating Directors' warrant exercise are set out within this notification.

The warrants were issued pursuant to the fundraising announced by the Company on 13 December 2013 (the "December Placing") fundraising and expired on 19 June 2014. Following this transaction there are no outstanding 2.5p warrants.

Application has been made for the New Ordinary Shares to be admitted to trading on AIM and it is expected that this will take place on or around 26 June 2014.

Table 1 below sets out the Company's current liabilities with respect to the Participating Directors and provides a breakdown of the warrants that are to be exercised in partial settlement of the liabilities:

Table 1:

Participating Directors' Shareholdings

Following the subscriptions of each of the Participating Directors, their resultant holdings are set out in Table 2 below:

Table 2

Related party Transaction

The conversion of warrants and payment of the consideration via the capitalisation of liabilities constitutes a related party transaction for the purposes of Rule 13 of the AIM Rules for Companies. The independent director of the Company, Mr Robert Bouquet, having consulted with the Company's nominated adviser, Westhouse Securities Limited, considers that the terms of this transaction are fair and reasonable insofar as the Company's shareholders are concerned.

Total Voting Rights

Following the issue of the 27,346,000 New Ordinary Shares, Botswana Diamonds will have 196,228,267 shares in issue which will also represent the total number of voting rights in the Company. The above figure should be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the FCA's Disclosure and Transparency Rules.

-Ends-

Enquiries:

www.botswanadiamonds.co.uk