African Diamonds plc

AFD is developing the world class AK6 diamond mine in Botswana in Joint Venture

with Lucara Diamond Corporation

August 2010

2

Important Notice

♦ This presentation does not constitute or form part of any offer for sale or solicitation of any offer to buy or subscribe forany securities in African Diamonds plc nor shall it or any part of it form the basis of, or be relied on in connection with, or act as any inducement to enter into, any contract or commitment whatsoever. No reliance may be placed for any purpose whatsoever on the information or opinions contained in this presentation or on any other document or oral statement or on the completeness, accuracy or fairness of any such information and/or opinions. No undertaking, representation, warranty or other assurance, express or implied, is made or given by or on behalf of African Diamonds plc or any of their respective directors, employees or advisers, as to the accuracy or completeness of the information or opinions contained in this presentation, and (save in the case of fraud) no responsibility or liability is accepted by any of them for any such information or opinions or for any errors, omissions, misstatements, negligence or otherwise contained or referred to in this presentation. The contents of this presentation have not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000.

♦ This presentation does not constitute an offer to the public as referred to in section 85 of the Financial Services and Markets Act 2000 (as amended) of the United Kingdom and accordingly has not been nor will it be approved by any competent authority in the United Kingdom. This presentation is not a prospectus within the meaning of the Prospectus (Directive 2003/71/EC) Regulations 2005 of Ireland and therefore has not been approved by the Irish Financial Services Regulatory Authorities being the competent authority for the purposes of Directive 2003/71/EC in Ireland. This presentation is not an offering document for the purposes of section 49 of the Investment Funds, Companies and Miscellaneous Provisions Act 2005 of Ireland.

♦ This Presentation has been prepared by the Directors of African Diamonds plc and is being issued solely to and directed at persons who have professional experience in matters relating to investments falling within Article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 ("FPO") or (b) high net worth entities and other persons to whom the presentation may otherwise lawfully be communicated, falling within Article 49 of the FPO (all such persons together being referred to as "Relevant Persons"). In consideration of the receipt of the presentation each recipient warrants and represents that he or it is a person falling within that description. Delivery of this information to any other person or reproduction, in whole or in part, without the prior consent of African Diamonds plc is prohibited.

♦ This information is being supplied to you, in whole or in part, for information purposes only and not for any other purpose. In particular, the distribution of this document in jurisdictions other than United Kingdom or Ireland may be restricted by law and persons into whose domain this document comes should inform themselves about, and observe, any such restrictions. Any failure to comply with these restrictions may constitute a violation of laws of any such other jurisdictions.

♦ This presentation contains forward looking statements. Forward looking statements appear in a number of places in this presentation and include statements regarding African Diamond plc’s intent, belief or current expectations with respect to its results of operations and financial conditions. By their very nature forward looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that predictions, forecasts, projections and other forward looking statements will not be achieved. African Diamonds plc is under no obligation, and disclaims any obligation, to update or alter the forward looking statements included in this presentation, whether as a result of new information, future events or otherwise after the date of this presentation.

3

Introduction

♦ African Diamonds (AIM: AFD) is a Botswana focused

diamond explorer and developer who discovered, in 2004,

the AK6 hard rock kimberlite mine.

♦ This high value diamond mine developed by African

Diamonds (40%) and their partner, Lucara Diamond

Corporation (part of Lundin Group – 60%) will come on

stream in 2011.

♦ At full production, AK6 will each year produce around

700,000 carats of diamonds (+1.5mm) expected to realise

over US$175M in revenue.

4

Executive Summary of the AK6

Project

♦ Using 100% equity, unescalated NPV at an 8% rate of discount is US$172

million.

♦ The project IRR is calculated to be 38.4%

♦ The mine will process a total of 37.8 million tonnes, and strip 90.9 million

tonnes of waste to recover 6.94 million carats of diamond

♦ The mine will be developed in two phases:

– Phase 1 will treat 2.5 million tonnes per annum from 2012 to 2015

– Phase 2 will treat 4 million tonnes per annum from 2016 to 2022.

♦ The capital expenditure will be

– Phase 1 – US$120.2 million

– Phase 2 – US$ 36.1 million

♦ The average operating cost will be US$ 17.51 per tonne treated

5

Diamond Market

♦ Fundamental change in world economy since Q4 2008

♦ Dramatic short to medium term impact on diamond industry

– Rough prices dropped by 40-65% from highs of mid-2008

– Mine closures & production cut backs

– Termination or curtailing of the majority of exploration projects in Q1 2009

– Lack of new discoveries reducing long term supply

♦ Sustained recovery:

– Rough prices began to recover in April 2009

– Significant supply shortfall expected in 2012 going forward which will drive demand

– Destocking of cutting centres and return of bank finance are stimulating cutting centre demand for rough

– Rough prices are close to their all time high.

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Botswana is an African success story:

it has progressed from one of the

poorest countries in the World at the

time of independence in 1966 to a

middle-income country

– Africa's least corrupt country

– Third freest economy in Africa

– Consistently one of the highest sovereign

credit ratings in Africa

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Still the Best Address in Diamonds:

Botswana♦ Since gaining independence in 1966 it

has become one of the richest and most stable African countries. It is called the ‘Switzerland of Africa’:

♦ It is the largest diamond producer by value in the world

♦ There are 4 large operating diamond mines in Botswana, all run by Debswana:

– The Orapa mine, producing 17M carats a year, is the second largest diamond mine in the world

– Jwaneng is the richest mine of any type in the world, with a P/R ratio in excess of 80%.

– The Letlhakane mine producing $250M a year of gem stones is located close to the AK6 discovery.

– Damtshaa (4 kimberlites), currently on care and maintenance

8

The AK6 Discovery

♦ First drilled in 1969

♦ Re-assessed by AFD & De Beers in 2004

– New geophysics & drilling technology

♦ Mining License approved by Government of the Republic of Botswana (‘GRB’) in 2008

♦ De Beers sold their share in Boteti to Lucara in 2009

♦ The AK6 mine is the only significant commercial hard-rock diamond discovery in recent years

9

Joint Venture on AK6 with Lucara

Diamond Corp

♦ The Boteti joint venture company, which holds the AK6

Mining Licence, has the following ownership -

- African Diamonds 40%

- Lucara 60%

♦ Lucara, is part of the Lundin Group which is a 15 company $10 billion resource group.

♦ African Diamonds has the right, subject to government approval, to market their percentage of diamond output, which will amount to up to c 300,000 carats a year.

♦ Lucara are the operator.

10

The AK6 Resource

Bulk Sampling on AK6

♦ Updated resource statement

11

AK6 Current Status

Feasibility Study approved by the board of Boteti

• 15 year mining license

• EIA and EMP approved in 2008

• Production expected to commence in Q4 2011

• No government equity in project

• 10% gross diamond value royalty

• Variable tax rate according to the 12th Schedule of Botswana Income Tax Act

• Diamond marketing arrangement concluded with the GRB

Mining License

• Paved roads

• Water (via underground boreholes and pit dewatering)

• Power (Botswana government pledge to provide power from national grid)

Excellent infrastructure

12

AK6 Development Plan

Parameters Description

Mine Life Open Cast 11 yrs

Mining Scenario Phased open pit development with contract mining

Phase I Production

Phase II Expansion

2.5Mt/yr starting 2011

4Mt/yr starting 2016

Indicated Resource 51Mt @ 16cpht (+1.5mm) @ USD243/ct

Production envelope Top size: 30mm

Bottom size: 1.5mm

Capital Expenditure (June 2010)

Phase I

Phase II

Feasibility Study estimates

Paradigm Project Management Pty Ltd

US$120M (inc 13% contingency)

US$36M (inc 20% contingency)

Positive reviews by DRA and SNC Lavalin

Operating Costs (June 2010) US$17.20/tonne (LOM)

Financial summary (unescalated costs

& 2.5% real diamond price growth)

NPV(8%) $US172m, IRR 38.4%

Implementation partner DRA Africa Pty Ltd

13

AK6 Treatment

Plant Flowsheet

♦ Primary mineral sizer

♦ Autogenous mill

♦ Pebble crushing

♦ Spiral classifier and screen

♦ Dense Media Separation

♦ Magnetic separation

♦ X-ray machines

♦ Handsorting

One recycle load only

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AK6 Diamonds

cts/ton %cts cts/ton %cts cts/ton %cts

60ct 0.001 0.425 0.001 0.5503 0.001 0.650

30ct 0.001 0.605 0.001 0.7843 0.001 0.926

15ct 0.002 1.104 0.002 1.4305 0.002 1.689

10ct 0.002 1.004 0.002 1.3007 0.002 1.535

9ct 0.001 0.317 0.001 0.4109 0.001 0.485

8ct 0.001 0.385 0.001 0.4995 0.001 0.590

7ct 0.001 0.480 0.001 0.6216 0.001 0.734

6ct 0.001 0.615 0.001 0.7971 0.001 0.941

5ct 0.002 0.821 0.002 1.0644 0.002 1.256

4ct 0.002 1.161 0.002 1.5044 0.002 1.776

3ct 0.004 1.789 0.004 2.3192 0.004 2.738

10gr 0.001 0.750 0.001 0.9726 0.001 1.148

8gr 0.005 2.461 0.005 3.1901 0.005 3.766

6gr 0.004 2.195 0.004 2.8454 0.004 3.359

5gr 0.003 1.491 0.003 1.9318 0.003 2.280

4gr 0.006 3.090 0.006 4.0051 0.006 4.728

3gr 0.007 3.807 0.007 4.9336 0.007 5.824

+11 0.022 11.079 0.022 14.3582 0.022 16.949

+9 0.021 10.707 0.021 13.8760 0.021 16.380

+7 0.018 9.081 0.016 10.5917 0.018 13.892

+5 0.042 21.370 0.034 22.1571 0.021 16.674

+3 0.033 16.904 0.010 6.5724 0.002 1.293

+1 0.016 8.359 0.005 3.2831 0.000 0.388

0.197 100.000 0.152 100.0000 0.129 100.000

+2mm Trench

Recovery

AK6 South lobe size distribution

+1mm LDD

Recovery +1.47mm Recovery

cts/ton %cts cts/ton %cts cts/ton %cts

60ct 0.001 0.518 0.001 0.6588 0.001 0.767

30ct 0.002 0.720 0.002 0.9163 0.002 1.067

15ct 0.003 1.289 0.003 1.6398 0.003 1.910

10ct 0.003 1.153 0.003 1.4675 0.003 1.709

9ct 0.001 0.362 0.001 0.4601 0.001 0.536

8ct 0.001 0.438 0.001 0.5574 0.001 0.649

7ct 0.001 0.543 0.001 0.6909 0.001 0.805

6ct 0.002 0.693 0.002 0.8821 0.002 1.027

5ct 0.002 0.921 0.002 1.1715 0.002 1.364

4ct 0.003 1.293 0.003 1.6450 0.003 1.916

3ct 0.005 1.976 0.005 2.5146 0.005 2.929

10gr 0.002 0.823 0.002 1.0475 0.002 1.220

8gr 0.007 2.681 0.007 3.4113 0.007 3.973

6gr 0.006 2.369 0.006 3.0138 0.006 3.510

5gr 0.004 1.597 0.004 2.0324 0.004 2.367

4gr 0.009 3.287 0.009 4.1822 0.009 4.871

3gr 0.010 4.008 0.010 5.0992 0.010 5.939

+11 0.030 11.452 0.030 14.5705 0.030 16.971

+9 0.028 10.808 0.028 13.7515 0.028 16.017

+7 0.023 8.997 0.021 10.3025 0.023 13.333

+5 0.054 20.647 0.043 21.0154 0.027 15.604

+3 0.041 15.842 0.012 6.0469 0.002 1.174

+1 0.020 7.582 0.006 2.9230 0.001 0.340

0.260 100.000 0.204 100.0000 0.175 100.000

AK6 Center/North lobe size distribution

+1mm LDD

Recovery +1.47mm Recovery

+2mm Trench

Recovery

The valuation report noted that the diamonds from AK6 are deemed to be of very good quality and very attractive to diamond buyers from any of

the world commercial diamond centers. Colors are generally very white and the samples showed numerous examples as ‘blocky’ makeable and

strong crystal forms that tend to lead to strong polished yields which demand a premium. There was a noted presence of type II A stones

including a 12+ carat stones that had been broken into 8 or more fragments. There was a very surprising profile of large stones given the

relatively small sample size. Especially unusual was the Center/South trench sample which produced 5 stones > 3 carats from only a 94 carat

sample. This included a 10 carat stones valued at ~$17,600. This evidence tends to suggest that AK6 will produce significantly more larger,

better quality stones than currently modeled.

15

AK6 Diamond Marketing

♦ Diamonds will be sold through:

– Open tender process

– Negotiated exclusivity contract

♦ Standard 10% royalty on diamond sales paid on actual sales

price

♦ Government Diamond Valuer (‘GDV’) will value Boteti goods

prior to any sale

♦ Marketing clauses in Mining License agreed with GRB

♦ Discussions well advanced with diamantaires in terms of a

marketing framework

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AK6 Project Finance

♦ Short list of 4 institutions examining the project

♦ Indicative terms received

♦ Discussions well advanced with one bank in

particular

♦ Opportunity to access preferential ECIC funding

in addition to standard project financing

♦ Possibility of expanding the overall financing

through a line of credit from diamantaire(s) both

at a Boteti and AFD level

17

AK6 Opportunities

Variable Current Opportunity

Diamond Value Modelled: US$243/ct

Expected: USD250/ct+

Increased diamond price

Confirmation of rare high

value Type II diamonds

Increased stone value

Evidence of larger stones Increased revenue

Grade 16cpht (+1.5mm) Conservative estimate &

autogenous milling will liberate

more diamonds.

The grade of the South lobe

could be up to 40% higher due to

diamond breakage and lock-up in

the sampling programme

Reserve Bottom of open pit is

currently 336m

The Indicated Resource exists

down to 400m, with an Inferred

Resource down to 750m, so

plenty of opportunity to deepen

the pit

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AK6 Development Timeline

2010 2011 2012 2013 2015

H1 H2 H1 H2 H1 H2 H1 H2 H1 H2

Feasibility Update

Development

Production

Expansion

In progress Planned/Continuing

NLobe CLobe SLobe

Mudstone

Shale

Granite

Mosolots

Sandstone

Ntane

Sandstone

Fresh

Basalt

Calcrete

W BasaltNLobe CLobe SLobe

Mudstone

Shale

Granite

Mosolots

Sandstone

Ntane

Sandstone

Fresh

Basalt

Calcrete

W Basalt

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Exploration Upside - Botswana

♦ 100% AFD owned

♦ Three advanced hard rock kimberlite

exploration projects

♦ The AK8 discovery, 10km away from AK6,

is a 5 hectare pipe grading up to 7 cpht with

20M tonnes of resources estimated.

♦ The AK9 discovery, 10km away from AK6,

is a 3 hectare pipe with limited exploration,

but good quality diamonds.

♦ BK5 kimberlite currently 3.5 hectares is

expected to grow to 7.2 hectares on further

work.

♦ Comprehensive drilling programme being

planned.

♦ The expectation is that one or more of the

above will become a stand alone mine or a

satellite feeder to AK6. 15

20

Early Stage Exploration

♦ African Diamonds is active in 4 countries:

♦ Botswana: AFD holds attractive ground in the Orapa

area including 21 known kimberlites. An active drilling

programme will start in mid 2010.

♦ Zimbabwe: AFD has joint venture applications for ground

in the Marange area.

♦ Cameroon: AFD is in early moves to acquire ground in

the Keto, Mobelong and Foumbon areas.

♦ Congo: AFD holds a 35% interest in Bugeco who hold

licences containing 10 known kimberlites.

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Corporate

♦ Quoted on AIM (London) since July 2003 and on the Botswana Exchange since March 2004

♦ 100.3M shares issued: 108.6M fully diluted

♦ Market cap: £40M @ £0.40

– Range in last 12 months £0.21 - £0.56

♦ Directors, family and associates: 25%.

♦ Significant institutional investors:

– Investec Botswana (11.6%)

– JP Morgan (10%)

– Altus (5.4%)

– De Beers (3.4%)

– Black Rock (3%)

♦ c.1,500 shareholders (c.300 in Botswana)

♦ Broker/Nomad: Finncap

♦ Liquid, 9 market makers

♦ Cash: USD3.6M

22

Management

John Teeling (64) - Executive Chairman

•30 years’ resources experience.

•20 years African management experience.

•Established a number of AIM companies.

•Doctorate from Harvard.

James Campbell (46) – Managing

Director

•Over 20 years’ diamond experience with

Anglo American plc & De Beers.

•Had world-wide responsibility for

diamond resource delivery in De Beers.

•Previously Personal Assistant to Nicky

Oppenheimer.

•Degrees in Geology and Business.

Alex Van Zyl (66) – Technical Director

•Over 40 years’ diamond experience with

Anglo American plc and De Beers.

•Had worldwide responsibility for

diamond exploration and evaluation.

•Led the discovery of Venetia Mine.

James Finn (51) – Finance Director

•20 years’ experience in exploration

companies.

•Currently Director of 5 AIM companies.

•Degrees in Accounting and

Management.

David Horgan (50) – Director

•Holds a Law degree from Cambridge

and an MBA from Harvard.

•He is Managing Director of AIM listed

Middle East oil explorer Petrel

Resources plc and Oil & Gas producer

Hydrocarbon Exploration plc.

23

Proposal

1. $20m loan to AFD to be used in CAPEX for the AK6

mine and for exploration

2. Six year term

3. 10% interest per annum rolled up

4. Bullet payment at end year 6

5. Life of Mine marketing rights on the AFD share of AK6

output

6. Similar rights on any other mines developed by AFD

during the loan life

7. Two directors on the main board (2 of 7)

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Summary

♦ JV with Lucara

♦ Mining License in place for world-class AK6 hard rock diamond mine

♦ Updated Feasibility Study received

♦ Commissioning due to commence late 2011

♦ Diamond market improving

♦ Wholly owned prime exploration ground in Botswana