Issue of Options

8 July 2013 Paragon Diamonds Limited ("Paragon" or the "Company") (AIM: PRG) Issue of Options Paragon Diamonds Limited, the AIM quoted African focused diamond developmentcompany, announces it has issued options to Executive Directors and certain keyemployees of the Company. A total of 14,100,000 options have been issued in three equal tranches whichare eligible for vesting over a period of two years from the issue date of 5July 2013. The exercise price for each tranche increases in line with targetedshare price growth. The following Directors have been issued options: Director Number of options Vesting date Exercise Price (p) Stephen Grimmer 1,300,000 5 July 2013 7.0 Stephen Grimmer 1,300,000 5 July 2014 8.0 Stephen Grimmer 1,300,000 5 July 2015 9.0 Simon Retter 1,300,000 5 July 2013 7.0 Simon Retter 1,300,000 5 July 2014 8.0 Simon Retter 1,300,000 5 July 2015 9.0 Martin Doyle 1,300,000 5 July 2013 7.0 Martin Doyle 1,300,000 5 July 2014 8.0 Martin Doyle 1,300,000 5 July 2015 9.0 Total 11,700,000 For further information: Paragon Diamonds Limited +44 (0) 20 7099 1940 Martin Doyle - Chairman Simon Retter - Finance Director www.paragondiamonds.com Sanlam Securities UK (Nominated Adviser & +44 (0) 20 7628 2200Broker) Lindsay Mair Catherine Miles Paragon Diamonds Limited CONSOLIDATED STATEMENT OF CASHFLOWS

As at 31 December 2010