production update

will the production update attract some new interest to bid ?.............mmm



ASX/AIM Release 11 October 2007
PRODUCTION AND SALES UPDATE

• The first pink diamond (1.58 carats) recovered at Ellendale.


• Unusual recoveries - calcite-covered white diamond (10 carats) and an octahedral fancy yellow embedded in sandy tuff (circa 3 carats).


• Production throughput of 100,000 tonnes achieved over four days in September (annualised 9.125 million tonnes).


• Highest prices to date (in US$) for the Ellendale ROM Production.

Kimberley Diamond Company NL (ASX: KIM, AIM: KDC – “Kimberley”) is pleased to announce an update on the recent production results at the Ellendale Diamond Project in Western Australia. Several interesting diamonds have been recovered over the past fortnight, including an outstanding pink 1.58 carat diamond, the first stone of its kind ever found at Ellendale.
Encouraging trends have been in evidence in relation to production throughput and operating costs at both the Ellendale 9 East and Ellendale 4 plants. Specifically, over a four-day period in September, record production throughput of 100,000 tonnes was achieved.
A strong market and, particularly, strong demand for fancy yellow product, has driven prices for the Ellendale production above previously achieved levels.
Significant Diamonds Recovered
A unique pink 1.58 carat diamond (shown below next to recently recovered yellow and white diamonds), was recovered from a new mining zone at Ellendale 4.
Photo 1 – 1.58 carat pink diamond (centre)

12 WALKER AVENUE WEST PERTH 6005 WESTERN AUSTRALIA PO BOX 806 WEST PERTH WESTERN AUSTRALIA 6872
TEL (08) 9321 5887 FAX (08) 9321 5884 EMAIL [email protected] WWW www.kimberleydiamondco.com.au
KIMBERLEY DIAMOND COMPANY NL ABN 91 061 899 634 PRODUCTION AND SALES UPDATE 11 October 2007 Page 2 An indicative valuation for the pink diamond is at least US$20,000 a carat for the rough and between US$30-40,000 polished. This valuation has been provided by Kimberley’s independent valuer – IDV.
Also recovered recently from run-of-mine ore from Ellendale 9, were a 10 carat white stone which was almost totally covered in a calcite skin (see photo 2) (approximately 13.2 carats including the calcite skin), and a circa 3 carat octahedral fancy yellow stone (see photo 3) within a chunk of sandy tuff.
Photo 2 – 10 carat white diamond in calcite
Photo 3 - fancy yellow embedded in sandy tuff
The condition in which the diamonds in photos 2 and 3 were recovered requires explanation and potentially raises issues for enquiry as to processing and recovery techniques. Kimberley is currently reviewing this aspect of its operations, including the crushing circuit and X-ray recovery units at both plants.
Production Update
At both Ellendale 4 South Plant and the Ellendale 9 East Plant, there have been encouraging production windows demonstrated most graphically by over 100,000 tonnes being processed during four consecutive days during September. This equates to annualised production of 9.125 million tonnes.
Kimberley remains of the view that further capital investment will be rewarded by greater (and consistent) throughput and lower unit operating costs.
KIMBERLEY DIAMOND COMPANY NL ABN 91 061 899 634 PRODUCTION AND SALES UPDATE 11 October 2007 Page 3 KIMBERLEY DIAMOND COMPANY NL ABN 91 061 899 634

An indicative valuation for the pink diamond is at least US$20,000 a carat for the rough and between US$30-40,000 polished. This valuation has been provided by Kimberley’s independent valuer – IDV.
Also recovered recently from run-of-mine ore from Ellendale 9, were a 10 carat white stone which was almost totally covered in a calcite skin (see photo 2) (approximately 13.2 carats including the calcite skin), and a circa 3 carat octahedral fancy yellow stone (see photo 3) within a chunk of sandy tuff.
Photo 2 – 10 carat white diamond in calcite
Photo 3 - fancy yellow embedded in sandy tuff
The condition in which the diamonds in photos 2 and 3 were recovered requires explanation and potentially raises issues for enquiry as to processing and recovery techniques. Kimberley is currently reviewing this aspect of its operations, including the crushing circuit and X-ray recovery units at both plants.
Production Update
At both Ellendale 4 South Plant and the Ellendale 9 East Plant, there have been encouraging production windows demonstrated most graphically by over 100,000 tonnes being processed during four consecutive days during September. This equates to annualised production of 9.125 million tonnes.
Kimberley remains of the view that further capital investment will be rewarded by greater (and consistent) throughput and lower unit operating costs.
KIMBERLEY DIAMOND COMPANY NL ABN 91 061 899 634 PRODUCTION AND SALES UPDATE 11 October 2007 Page 3 KIMBERLEY DIAMOND COMPANY NL ABN 91 061 899 634
Sales Update
Kimberley’s recent sales have achieved the highest prices to date (in USD).
The upper end of the diamond market – which tended to be insulated against last year’s market fluctuations – continues to perform particularly strongly with record demand for better quality larger and specialty diamonds. This is strategically important for Kimberley, given that Ellendale produces a significant proportion of the world’s fancy yellow diamonds.
Industry projections show a positive long-term outlook, with diamond prices expected to keep strengthening due to global demand for diamonds exceeding supply over the next 10 years or until new deposits are found and reach the production stage.
The strong AUD against the USD continues to adversely impact results and the Company.
Blina Diamonds Discovery
Blina Diamonds NL (ASX: BDI), Kimberley’s 40%-owned exploration affiliate, recently reported the recovery of diamonds with green colouration from the E12 Alluvial Area, located within the Terrace 5 palaeo-channel system, in close proximity to Kimberley’s Ellendale 9 mining operations.
These diamonds are believed to display a surface characteristic usually caused by radiation, resulting in the green skin colouration. The significance of the discovery of these diamonds from Kimberley’s perspective is that it provides strong evidence for the presence of an undiscovered diamond source within close proximity.
Gem Diamonds’ Bid for Kimberley
Documents relating to the takeover bid by Gem have been circulated to shareholders. The Board continues to recommend that all shareholders accept the offer from Gem in the absence of a superior offer.
– ENDS –
Released by: On behalf of:
Nicholas Read Miles Kennedy - Chairman
Read Corporate Kimberley Diamond Company NL
Telephone: (+61-8) 9388 1474 Telephone: (+61-8) 9321 5887