Sale of The Lesotho Legend

13 March, 2018

GEM DIAMONDS LIMITED

("Gem Diamonds" or "the Company")

Sale of The Lesotho Legend

Exceptional quality 910 carat diamond achieves US$40m on tender

Gem Diamonds Limited (LSE: GEMD) is pleased to announce that the exceptional quality 910 carat D colour Type IIa diamond recovered from the Letšeng mine in January 2018 achieved a price of US$40 million on tender in Antwerp on 12 March, 2018.

Reflecting its significance, the diamond, which is the fifth largest gem quality diamond ever recovered, has been named The Lesotho Legend.

A video on The Lesotho Legend can now be viewed via the Company's website, www.gemdiamonds.com

Clifford Elphick, Gem Diamonds' Chief Executive Officer, commented:

"We are delighted with the outcome of the sale of this iconic diamond, which demonstrates the exceptional quality of The Lesotho Legend itself, as well as reaffirming the unique quality of the Letšeng diamond production."

The Gem Diamonds Limited LEI number is 213800RC2PGGMZQG8L67

For further information:

Gem Diamonds

Susan Wallace, Company Secretarial department

[email protected]

Celicourt Communications

Mark Antelme / Jimmy Lea

Tel: +44 (0) 207 520 9261

About Gem Diamonds:

Gem Diamonds is a leading global diamond producer of high value diamonds. The Company owns 70% of the Letšeng mine in Lesotho and 100% of the Ghaghoo mine in Botswana. The Letšeng mine is famous for the production of large, top colour, exceptional white diamonds, making it the highest dollar per carat kimberlite diamond mine in the world. www.gemdiamonds.com