River Diamonds is a Gem

River Diamonds PLC
21 December 2006


River Diamonds plc('River Diamonds' or 'the Company')
Completion of the Acquisition of the Panguma Diamonds Project
Issue of new Ordinary Shares
Appointment of Director

21 December 2006

Completion of the Acquisition and issue of new Ordinary Shares

On 25 October 2006, River Diamonds announced that it had agreed terms with
Olympus Development Company Limited ('Olympus'), a subsidiary of African
Precious Metals Limited, to acquire the Panguma Diamond Project ('Panguma') in
Sierra Leone (the 'Acquisition'). River Diamonds has been exploring Panguma
since January 2006 under the terms of a Joint Venture agreement which was signed
with Olympus in June 2005.

River Diamonds today is pleased to announce that it has successfully completed
the acquisition of Panguma. As was set out in the announcement of 25 October
2006, the consideration for the Acquisition is to be satisfied by the issue of
93,985,000 Ordinary Shares of 0.1 pence each ('the Consideration Shares') in
River Diamonds (roughly 16.7 per cent. of the enlarged issued share capital of
River Diamonds).

The new Ordinary Shares will rank pari passu with the existing Ordinary Shares
and an application for admission to trading of these Ordinary Shares on AIM will
be made, with admission expected to commence on 2 January 2007.

Based on the closing mid-market share price of River Diamonds as at 20 December
2006 (the most recent practicable date to the release of this announcement) of
0.75 pence, the consideration for the Acquisition is valued at approximately
£0.7 million.

Following the issue of the Consideration shares the total number of Ordinary
Shares in issue will be 563,912,966.

Appointment of Director

In addition, and as part of the Acquisition, Martin Grahame Hills, aged 50,
Projects Director of APM will be joining the River Diamonds board as a Non
Executive Director. His wealth of technical and operational experience in Africa
will further strengthen the Company's board and assist us in our developments in
Sierra Leone. Martin is a director of African Precious Minerals Ltd, and Panguma
Diamonds Co Ltd. There are no other requirements of AIM Rule Schedule 2(g) that
fall to be disclosed.

Background on Panguma

To date River Diamonds has been sampling, mapping and drilling the kimberlite
dykes at Panguma and has obtained encouraging results. The Company has defined
the lateral extent of the Talama 1 Kimberlite Dyke, proving up one kilometre and
inferring a further three kilometers of strike length, and in addition to this,
it has identified two further kimberlite intrusions one of which was sampled and
1.5 carats was subsequently recovered from a 2.6 tonne sample. In total the mini
bulk sampling has recovered 6.71 carats from 12.5 tonnes to date.

The Panguma area is about 230 kilometres from Freetown and covers approximately
54 square kilometres in eastern Sierra Leone. It is also approximately 50
kilometres from Koidu, where the first hard rock diamond mine in Sierra Leone is
being developed. The Panguma licence adjoins the Tongo diamond field, which
hosts kimberlitic dykes that are, in terms of diamond grade and quality, among
the highest in the world. A number of diamondiferous dykes, extending from
Tongo, were discovered at Panguma in the 1960's and one six tonne sample was
taken; this gave a grade of 38 carats per hundred tons ('cpht') although the
size of the sample may have given a misleading result as other samples taken on
three of the dyke exposures on the adjoining Tongo lease gave grades of 150cpht,
268cpht and 100cpht. Little commercial exploration work has been carried out at
Panguma, with no sampling or testing undertaken on the property in the last 40
years.