Placing to raise GBP2.05 million

19 October 2011

NOT FOR DISTRIBUTION IN OR INTO AUSTRALIA, CANADA, JAPAN OR THE UNITED STATES OR ANY OTHER JURISDICTION IF TO DO SO WOULD CONSTITUTE A VIOLATION OF THE LAWS OF SUCH JURISDICTION

DiamondCorp plc

JSE share code: DMC & AIM share code: DCP

ISIN: GB00B183ZC46

(Incorporated in England and Wales)

(Registration number 05400982)

(SA company registration number 2007/031444/10)

("DiamondCorp" or "the Company")

Placing to raise £2.05 million

The Board of DiamondCorp, the Southern African diamond development and exploration company, is pleased to announce that it has placed 31,600,000 new ordinary shares of 3 pence each in the Company ("the Placing Shares") at a price of 6.5 pence per share ("the Placing Price") to raise, in aggregate, £2.05 million gross proceeds for the Company (approximately £1.9 million net of expenses) ("the Placing"). The Placing Price represents a discount of 8.77 per cent. to the closing mid-market price of 7.125 pence on 18 October 2011.

Use of Proceeds

The net proceeds of the Placing will be used to retire the debt and accrued interest owed to Africa Opportunity Fund LP and to fund corporate overheads and general working capital as follows:

Directors' shareholdings

Certain directors of the Company have participated in the Placing as follows:

* All of the Ordinary Shares in which Paul Loudon is beneficially interested are held by Green Dragon Nominees Pty Limited, a company with which he is connected.

** 2,456,666 of the shares in which Jonathan Willis-Richards is beneficially interested are held by Loeb Aron & Company Limited, a company with which he is connected.

Placing Shares

Application has been made to the London Stock Exchange and the JSE for the Placing Shares to be admitted to trading on AIM and AltX. It is expected that Admission will become effective and that trading in the Placing Shares will commence on AIM and AltX at 8.00 am UK time on 25 October 2011. The Placing Shares will rank pari passu with the Company's existing issued ordinary shares.

Following the issue of the Placing Shares there will be a total of 242,268,048 ordinary shares of 3 pence each in the capital of the Company in issue.

Commenting on the placing, DiamondCorp's CEO Paul Loudon said: "I am delighted that with the support of our shareholders, DiamondCorp will now be completely debt free. This fundamental strengthening of our balance sheet comes at the same time as we have demonstrated that our flagship asset, the Lace mine in South Africa, will support a +25-year mine life, producing almost 450,000 carats per annum at peak production and generating life-of-mine cashflows of almost £500 million.

"Markets for resource stocks are experiencing a difficult period at the moment, and financing the whole of the Lace mine development from equity capital cannot be done without an unacceptably high dilution to existing shareholders. Therefore management will now turn its attention to investigating sources of project finance for Lace in a form which provides the least dilution and maximum leverage for existing shareholders.

"At the same time, large diameter drilling of the Company's exciting diamondiferous kimberlites within 10km of De Beers massive Jwaneng mine is underway, with an initial grade indication expected on the J-05 kimberlite before year end."

Contact details:

DiamondCorp plc

Paul Loudon, Chief Executive

Tel: +44 20 3151 0970

Fairfax I.S. PLC

AIM Nomad and Broker

Ewan Leggat/Laura Littley

Tel: +44 207 598 5368

Ocean Equities Limited

Guy Wilkes

Tel: +44 207 786 4370

PSG Capital (Pty) Limited

John-Paul Dicks

Tel: +27 21 887 9602

Russell & Associates

Charmane Russell/Marion Brower

Tel: +27 11 880 3924