5 January 2017

ASX ANNOUNCEMENT

The Company wishes to advise that it has recovered a number of rough diamonds from operations at the Merlin Diamond mine including a 35.26 carat brown Diamond (which is the fifth largest Diamond discovered in Australia), a 14.6 carat brown Diamond as well as a number of smaller white diamonds.

The Merlin Diamond mine is known for its high quality large super white diamonds and Australia's largest Diamond ever found and the recoveries of the diamonds noted above continues to demonstrate the potential for large diamonds.

Merlin Diamonds Limited ABN 86 009 153 119 Level 1A, 42 Moray Street Southbank VIC 3008 T: +61 3 8532 2858 F: +61 3 8532 2805

W: www.merlindiamonds.com.au E: [email protected]

Rough Diamonds before cleaning and polishing

6.9cts

Q7.61cts

4.20cts

3.95cts

yellow

black bl ue f'

• • 0.34cts 0.49cts 0.1 2cts

Assorted diamonds

1.88cts

2.07cts

re 0.77cts

Merlin is known for its high quality white diamonds, and Australia's largest Diamond. Note that clarity and whiteness of diamonds are not visible on this photo. Professional photos will be released in the future. Photo released due to the relevance of the (lscovery of the large Diamond .