Release: Gem Diamonds: Temporarily suspends Cempaka mining

(April 11, 2008) Gem Diamonds is an 80% shareholder, in partnership with PT Aneka Tambang, a company controlled by the Government of Indonesia, in the Cempaka alluvial diamond mine. Cempaka is located in a low lying coastal swamp area of the South Kalimantan Province in Indonesia.

Gem Diamonds has temporarily suspended mining to investigate various concerns recently raised by the regional Government of the South Kalimantan Province on a number of environmental matters.

The Company?s? own environmental consultants have advised that they believe these concerns to be without merit.

However, in line with the Company?s commitment to best practice environmental issues management, a thorough investigation by both independent environmental consultants from the University of Lambung Mangkurat as well as the Provincial Environmental Monitoring Group for South Kalimantan has commenced.

Mining is expected to resume following these investigations and findings from both Provincial authorities and independent consultants.

Whilst the duration of the suspension cannot presently be determined, it is not anticipated to have a material impact on the financial performance of the Company, given Cempaka?s relatively minor contribution to the forecast consolidated results for 2008.

Cempaka has operated as an alluvial mine in partnership with the Government of Indonesia since 2004, subsequent to being awarded a Contract of Work by the President in 1998 that runs for 35 years. It is the first commercial mine in the area where artisanal mining has been ongoing for over 1 000 years.

A further update will be provided in due course.(end of release)