Merlin Diamonds : Appointment of Senior Diamond Advisor and Mine Manager; Entitlements Offer; and Auditor – 27/10/2017

27 October 2017

The Company is pleased to announce two key appointments.

Phil Plaisted has been appointed Senior Advisor. Phil is a Mining industry Consultant specialising in diamonds. He was Global Practice Leader Diamond Technology and Innovation at Rio Tinto from 2006 to 2013. Phil was responsible for technical work across Rio Tinto's global diamond business covering the entire value chain and including the evaluation of growth opportunities and improvement of current operations.

He was inaugural Managing Director of Murowa Diamonds from2003 to 2006 where he managed the design, construction and operation of a diamonds mine in Southern Zimbabwe. Prior to that he was Chief Consultant Technical Evaluation for 5 years during 1998 to 2003. During that time, he was responsible for the independent technical evaluation of major capital projects across the Rio Tinto Group.

Phil was General Manager at Argyle Diamonds for 17 years between 1981 and 1998. He held the role of Project Metallurgist, Manager Technology then various General Management roles over 11 years covering Technical Effectiveness, Business Analysis and Planning, Business Development, Organisation, Pink Diamond Business.

David Bates has been appointed Mine Manager for the Merlin diamond mine. David has a Bachelor of Engineering (Mining), is a member of AUSIMM and his career spans over 30 years in the mining industry throughout Australia, South East Asia and South America.

During that time he has held roles with Glencore, Rio Tinto, Pasminco, PT Cipta Kridatama, PT Darma Henwa TBK (formerly Henry Walker Eltin Indonesia) as Chief Operating officer and more recently as General Manager Mining/Deputy Project Director for PT Bumi Suksesindo, Director of Windsor Mining Services Pty. Ltd and a Director - PT Powertrain Solutions Indonesia.

He has experience in all facets of mining operations including planning and development of mining operations, procurement, providing technical advice on equipment, operating costs, production performance improvement, regulatory matters, contractual matters, and selection of mine capital.

The Company will be releasing to the market today the following documents:

• Entitlements Offer Document in relation to the offer to shareholders in Australia and New Zealand on the basis of 2 new shares for every 5 shares on issue at the record date of 13 November 2017 at an issue price of $0.005 per share;

• Cleansing statement: and

  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: info@merlindiamonds.com.au

• Appendix 3b - New Issue Announcement

The Company will be appointing a new auditor promptly as the existing auditor has pursuant to S329 (5) of the Corporations Act notified the Company that it intends to apply to ASIC to resign as auditor.