Notification of interest

For filings with the FSA include the annex

For filings with issuer exclude the annex

TR-1: Notifications of Major Interests in Shares

1. Identity of the issuer or the underlying issuer of existing shares to which voting rights are attached:

PARAGON DIAMONDS

2. Reason for notification (yes/no)

An acquisition or disposal of voting rights

YES

An acquisition or disposal of financial instruments which may result in the acquisition of shares already issued to which voting rights are attached

NO

An event changing the breakdown of voting rights

NO

Other (please specify):______________

3. Full name of person(s) subject to notification obligation:

SPREADEX LIMITED

4. Full name of shareholder(s) (if different from 3):

GRANDINEX INTERNATIONAL CORP

5. Date of transaction (and date on which the threshold is crossed or reached if different):

9/12/10

6. Date on which issuer notified:

13/12/10

7. Threshold(s) that is/are crossed or reached:

17%

8: Notified Details:

A: Voting rights attached to shares

Class/type of shares

If possible use ISIN code

Situation previous to the triggering transaction

Resulting situation after the triggering transaction

Number of shares

Number of voting rights

Number of shares

Number of voting rights

Percentage of voting rights

Direct

Indirect

Direct

Indirect

GB00B05MCJ34

 0 0 23,397,894 23,397,894 17.97%

B: Financial Instruments

Resulting situation after the triggering transaction

Type of financial instrument

Expiration date

Exercise/ conversion period/date

No. of voting rights that may be acquired (if the instrument exercised/converted)

Percentage of voting rights

Total (A+B)

Number of voting rights

Percentage of voting rights

23,397,894

17.97%

9. Chain of controlled undertakings through which the voting rights and /or the financial instruments are effectively held, if applicable:

Proxy Voting:

10. Name of proxy holder:

11. Number of voting rights proxy holder will cease to hold:

12. Date on which proxy holder will cease to hold voting rights:

13. Additional information:

14 Contact name:

GAVIN PUGH

15. Contact telephone name:

01727 895180