ELLENDALE (KIMBERLEY)

Gem Diamonds Limited released its Independent Technical Report which includes details of the Group's mineral resources and reserves and pricing as at 31 December 2010, as well as the latest information regarding operations and projects.

The mine’s monthly production record was broken. Plants at Ellendale 9 and Ellendale 4 processed a record 697 000 tonnes of ore for the month to produce a record 57 814 carats. By comparison, when Gem Diamonds announced its bid for Kimberley Diamond Company a year ago, the mine had just processed 557 091 tonnes of ore and recovered 36 565 carats in June 2007. The increased level of productivity is predominantly achievable as a result of improvements in plant processing capacity achieved with the recapitalisation program.

Kimberley Diamond Company’s 40-percent-owned subsidiary, Blina Diamonds achieved encouraging results from bulk sampling of alluvial gravels to the south of the Ellendale 12 lamproite pipe in Australia. The highlight was sample BLBS216, an 82-tonne bulk sample, which returned a grade of 15.85 carats per 100 tonnes with an average diamond size of 1.08 carats. The largest diamond recovered from the sample weighed 6.03 carats.