Lerala Diamond Mine Update

    Lerala Diamond Mine Update
             



DiamonEx Limited

AIM Release
26 November 2008

LERALA DIAMOND MINE UPDATE
('DiamonEx' or the 'Company')


- Government of Botswana to play active role in supporting Diamonex
during this period when worldwide commodity prices and prices for
rough diamonds in particular, are depressed

- The Company has secured a financing facility from its bank, The
Stanbic Bank, Botswana, repayment of which has been guaranteed by the
Government of Botswana, which will enable the Company to fund its
operating costs against its diamond inventory until a sale at what it
believes to be a fair price is achieved

- These new financing arrangements provide scope to defer diamond
sales until the market improves

Diamond Values & Sales

The Board of Directors have completed their review of their options
for the Company in light of the disappointing results from its first
Lerala Diamond Mine sale.  The Directors believe  the average price
of US$20 per carat received for the 10,612 carats sold on 30 October
was an aberration, reflecting an abnormally depressed market.. They
believe this price was significantly below the longer term value of
Lerala diamonds because:

- From 1997 to 2000, De Beers ran a trial mine at the Lerala Diamond
Mine (then known as the Tswapong Trial Mine) and achieved an average
dollar per carat approximately double what Diamonex achieved in
October 2008
- In 2005 when DiamonEx completed its bulk sample producing
approximately 1,000 carats which WWW International Diamond
Consultants valued at US$57 per carat average;
- Leading up to the 30 October 2008 Diamond sale, WWW International
Diamond Consultants valued the parcel of 10,612 carats at US$48
average, and this valuation was supported by the Government of
Botswana's independent diamond valuer;
The Directors remain firmly of the view that in the medium to long
term, the supply deficit in world diamond production that currently
exists and is expected to continue to increase over the next decade,
will ensure that the market for rough and polished diamonds is
strong. Short term however, with the Global credit crisis, prices
will remain uncertain.

The Indian market, which is where most of the Company's goods will be
sold, has to a large extent stopped buying rough diamonds. Market
sources suggest that the Indian buyers will return to the market in
the New-Year. In this regards however, the Directors are encouraged
to advise that through the Government of Botswana, direct contact has
been made with some Indian buyers and arrangements are being made for
viewing of the Company's diamonds to them before Christmas.

In light of these circumstances, the Directors wish to advise as
follows:

- The Company will be discussing and exploring a diamond sale
directly with a number of Indian buyers before Christmas;

- Discussions will include possible forward off take commitments from
the buyers for the Company's diamond production in the short to
medium term;

- In the short term however, the Company has secured a financing
facility from its bank, The Stanbic Bank, Botswana, repayment of
which has been guaranteed by the Government of Botswana, which will
enable the Company to fund its operating costs against its diamond
inventory until a sale at what it believes to be a fair price is
achieved;

- The financing facility is for an initial ten million pula, and can
be increased and extended with the consent of the Government of
Botswana depending on how discussions and negotiations proceed with
Indian or other buyers.

The Government of Botswana  is playing an  active role in  supporting
the Company in this regard.


Diamond Production

For the month of October, 55,000 tonnes of ore were processed against
a budget of 50,000, from which 15,500 carats were recovered
confirming a grade of 28 carats per hundred tonnes. There is an
estimated 15 percent of additional diamonds to be recovered from the
recovery tailings which will be re-processed during Plant stoppages
giving the Directors confidence that the grade will exceed 30 carats
per hundred tonnes.


Corporate

The Directors have appointed Mark Gray as the Chief Executive Officer
of DiamonEx Botswana Limited. He was previously Head of Corporate
Development for the Group.

Mark has an extensive background in corporate law and banking, having
been a Partner in major law firms in New Zealand and Australia, as
well as having worked in London in both law and investment banking.
For the last 5 years prior to joining DiamonEx in November 2007, Mark
set up, ran, and listed on the ASX, a contract coal mining services
company. During this time Mark acquired and developed his management,
mining and processing skills which DiamonEx now has the benefit of
calling on.

Managing Director Dan O'Neill says, "The arrangements which have been
negotiated with our bank and the Government of Botswana gives us the
financial stability we need to weather the immediate market
uncertainty and provides time to further mitigate these risks to
secure the future of the business. Fortunately, we are producing and
recovering well, our grade is where we believed it to be, and we have
a very low cost base. Even though these are extremely challenging
times for start up producers, to a large extent our destiny is now
very much in our own hands.  We have strong Management on the ground
in Botswana and a plan we are currently executing, which will not
only protect the Company, but position it well to capture value once
the financial markets settle."


For and on behalf of the Board

Paul Crawford
Company Secretary

For further information contact:

Dan O'Neill
Managing Director
Tel: [phone]
Mob: [phone]
Email: [e-mail]

Mark Gray
Corporate Development
Tel: [phone]
Mob: [phone]
Email: [e-mail]

Will Souter or Rob Adamson
RFC Corporate Finance Ltd (Nomad)
Tel: [phone]
        [phone]
Email: [e-mail]
            [e-mail]

Richard Hail
Fox-Davies Capital Ltd (AIM Broker)
Tel: [phone]
Email: [e-mail]

Jos Simson or Leesa Peters
Conduit PR - Investor Relations
Tel: [phone]
        [phone]
Email: [e-mail]


About DiamonEx:
DiamonEx is an emerging diamond  producer having developed a  330,000
carat per year diamond mine at Lerala, in eastern Botswana.  The mine
is 100% owned and is  located in an area that  produces up to 30%  of
the worlds diamonds by value.  The company also owns 15,000 sq km  of
mineral rights  in  Botswana  which  it  is  actively  exploring  for
diamonds, as well as a 9.3 hectare diamondiferous kimberlitic pipe in
northern Colorado, USA,  which it is  currently evaluating for  grade
and value.   DiamonEx  is listed  on  the Australian  Stock  Exchange
(ASX), the Alternative  Investment Market  in London  (AIM), and  the
Botswana Stock Exchange (BSE).

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