October 2013

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Forward Looking Statement

This presentation contains “forward looking statements”. Such “forward looking statements” may include without limitation (1) estimates of future earnings, the sensitivity of such earnings to diamond values and foreign exchange rate movements (2) estimates of future diamond production (3) estimates of future cash costs (4) estimates of future cash flow, the sensitivity of such flows to diamond values and foreign exchange rate movements (5) statements regarding future debt payments (6) estimates of future capital expenditure (7) estimates of reserves, resources and statements regarding future exploration results.

Where the Company expresses or implies an expectation or belief as to future events or results such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, “forward looking statements” are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by such “forward looking statements”. Such risks include but are not limited to diamond values, currency fluctuations, increased production costs and variances in grades or recovery rates from those assumed in mining plans, as well as political and operational risks in the countries and states in which the Company operates or sells product and governmental regulation and judicial outcomes.

The Company does not undertake any obligation to release publicly any revisions to any “forward looking statement” to reflect events or circumstances after the date of this presentation or to reflect the occurrence of unanticipated events, expect as may be required under applicable securities laws.

Competent Persons Statement

The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Dr DS Tyrwhitt who is a member of the Australasian Institute of Mining and Metallurgy. Dr DS Tyrwhitt is an independent consultant to the Company and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as Competent Person as defined in the 2004 edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Dr DS Tyrwhitt consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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Only 1% of discovered kimberlites are economically viable

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Over the past 24 months Merlin Diamonds has focused on pre-feasibility production trials and feasibility studies aimed at re-establishing operation at the Merlin Mine in the Northern Territory, Australia. Merlin Diamonds is also active in its other tenement holdings in the North Kimberley, and Arnhem Land, holding approximately 22,000km² in total under title.

MERLIN

Southern Cluster: PalSac, Launfal,

Excalibur, Tristram

Central Cluster: Gawain, Ywain

Northern Cluster: Gareth, Kaye, Ector,

Bedevere

OTHER PROJECT AREAS

North Kimberley Seppelt 1 & 2

Ashmore

Arnhem Land

MERLIN ORBIT

Tintagel

Lancelot

BORROLOOLA

Perth Exploration

Office

North Australian Craton

Melbourne Head Office

North Kimberley 1.5Mcts*

Arnhem Land

Merlin 7.2Mcts*

Argyle (Rio Tinto)

Ellendale (Gem Diamonds)

Borroloola

5 *Includes material classified as reserves and resources

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0m

80m

Open pits

PALSAC PIPE

438m

868m

JORC Probable Ore Reserve 8.1Mt

2,410,000carats

1,960,000 carats

14.69Mt 4.,370,000 Carats

JORC Inferred Resource 6.59Mt

Ore Reserve 69 metres 210,000 carats

Resource 240 metres 450,000 carats

Gawain is open at depth

Ore Reserve 47 metres 50,000 carats

Resource 120 metres 100,000 carats

Ywain is open at depth

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Merlin Diamonds Limited ( “Merlin Diamonds" or “the Company") is focused on developing its flagship Merlin Diamond Mine Project in the Northern Territory, Australia and is engaged in extensive exploration for additional sources of diamonds in and around Merlin

Merlin Diamonds has previously undertaken resource definition drilling resulting in the identification of sufficient resources to potentially underpin a 15 year plus mining project

Merlin is renowned for producing large, high clarity, super white, high value stones

Successful pre-feasibility production trials recovered 10,600cts of diamonds , which were valued at USD$351 per carat in June 2011 by Independent Diamond Valuers Pty Ltd , highlighting the viability of proceeding to a commercial mining operation

Merlin has commissioned the diamond recovery plant and processing of historic ROM stockpiles has begun. Borehole mining rig setup on the Ywain pit is complete and production from the first borehole will commence in October 2013.

Merlin is the only diamond mine in the Northern Territory and will be the third producer in Australia.

7 Merlin production assortment Some of the diamonds produced from

the Merlin 104.73ct stone The largest diamond found in Australia

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Refurbishment and commissioning of the diamond recovery plant is

now complete.

Construction of the gabion wharf for loading of the drill rig onto the

floating platform (barge) and construction and emplacement of the

barge is also complete. The borehole rig has mobilised onto the barge

and drilling of the pilot hole has commenced. First production from the

borehole is expected in October 2013.

Previously unprocessed kimberlite material that was stockpiled from

previous mining (and was too large to process) is now weathered

enough to reprocess after being exposed for over 15 years. Between

180,000 – 200,000 tonnes of this material is estimated to be available

and has been used for commissioning of the plant and can be used as

supplementary feed to the borehole mining ore.

The ROM stockpiles, apart from being bonus ore material that can be

processed at a low cost, also have the potential to host large diamonds

due to the fact that the previous plant could only process stones up to

20mm in diameter (approx. 100 cts). These larger stones, being more

dense than the host rock, will likely be at the base of the stockpiles and

if present, represent a significant windfall opportunity.

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Total Merlin JORC compliant combined Indicated and Inferred Mineral Resource is 19.02 million tonnes for a contained 4.31 million carats

Total Merlin JORC compliant Probable Ore Reserve is estimated at 11.1 million tonnes for a contained 2.9 million carats

Total Merlin Diamond Mineral Resource and Ore Reserve is now the second largest in Australia

10,600 carats of diamonds recovered in the pre-feasibility production trials, with the largest diamond recovered being a 24.12 carat gem quality diamond

2,590 carats were greater than 1ct, representing 24% of production

Of the +1ct diamonds, in excess of 75% were assessed as ‘gem’ or ‘near gem’ quality

Diamonds recovered in the 2010 production trial which were valued at USD$351 per carat in June 2011 by Independent Diamond Valuers Pty Ltd

Merlin Diamonds has delineated further drill ready kimberlite targets on the Merlin Mine Lease.

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Ore Classification Ore

(tonnes) Average Grade (ct per tonne)

Carats (Million carats)

Probable Ore Reserves 11.07 0.26 2.89

Indicated & Inferred

Mineral Resources 19.02 0.23 4.31

TOTAL 30.09 0.24 7.20 Merlin cut & polished diamonds, 2011

*Modifying factors for borehole mining have not been applied to this Ore Reserve estimate

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Indicated

Mineral

Resource

(Mt)

Inferred

Mineral

Resource

(Mt)

Total (Mt) Grade

(c/t)

Carats

(Mcts)

Southern Cluster

PalSac2 6.59 6.59 0.30 1.96

Launfal2 1.58 1.70 3.28 0.25 0.82

Excalibur1 0.46 0.31 0.77 0.34 0.26

Tristram2 0.74 0.74 0.06 0.04

Central Cluster

Gawain2 0.53 0.61 1.14 0.39 0.45

Ywain2 0.02 0.10 0.12 0.81 0.09

Northern Cluster

Gareth1 0.13 0.14 0.27 0.22 0.06

Kaye2 2.14 2.14 0.12 0.26

Ector1 3.47 3.47 0.07 0.26

Bedevere2 0.37 0.14 0.50 0.21 0.11

TOTAL 3.09 15.93 19.02 0.24 4.31

Probable

Ore Reserve

(Mt)

Grade (c/t) Carats

(Mcts)

Southern Cluster

PalSac2 8.1 0.30 2.41

Central Cluster

Gawain2 0.5 0.39 0.21

Ywain2 0.1 0.81 0.05

Northern Cluster

Kaye2 0.9 0.12 0.10

Ector1 1.5 0.07 0.11

TOTAL 11.1 0.26 2.89

The above Ore Reserves are additional to the Mineral Resources and are estimated on open pit and underground mining assumptions. A Reserve for alternative mining methods has not yet been estimated.

1Resource grade based on previous mining operation recovery using a +0.95 mm slotted bottom screen and a +0.95mm cut-off. 2Resource grade based on bulk sample test work using a +0.8 mm slotted bottom screen and a +0.95mm cut-off.

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0.01

0.1

0.11

2.41

0.05

0.21

0.08

0.03

0.40

0.16

0.21

0.04

0.03

0.03

0.43

0.10

0.26

0.26

1.96

0.08

0.24

0 100 200 300 400 500 600 700 800 900 1000

Tristram 0.04Mct

Bedevere 0.11Mct

Gareth 0.06Mct

Launfal 0.82Mct

Excalibur 0.26Mct

Kaye 0.36Mct

Ector 0.37Mct

PalSac 4.37Mct

Ywain 0.14Mct

Gawain 0.66Mct

Depth Below Each Pit Base (metres)

Depth of Kimberlite Pipes and Known Mineralisation

at Merlin

Reserve

Indicated

Inferred

2.20Mct 2.36Mct

Total carats for each classification shown on chart (Mct)

Pipe Total Carats (Mct)

2.64Mct

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Merlin Diamonds Limited is using borehole mining as a means to optimise the economics of ore extraction at Merlin.

Borehole mining involves the use of high pressure

water jets to cut and break rock formations in a drill hole with the resultant slurry being pumped to the surface.

Borehole mining can be undertaken to a depth of at least 500 metres.

• Merlin Diamonds Limited is working with Kinley Exploration, a US Company with an established operating history in relation to borehole mining including undertaking work at Diavik (Rio Tinto) and Ekati (BHP) Diamond Mines (where Kinley were getting good lift at 600metres depth).

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The first pilot borehole is currently being drilled at

Ywain pit with production from this hole commencing at the start of October. The drill rig is set up on a floating pontoon on the water surface of the submerged Ywain pit.

A borehole mining operation incorporating Gwain, Ywain, Excalibur and Palsac to 200 meters could have a potential carat population of 3.13 million carats. The opportunity exists to expand the borehole mining operation by incorporating other pipes at Merlin, or extensions to Gawain, Ywain, Excalibur and/or Palsac.

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Borehole mining is a proven technique for diamond extraction from Kimberlite pipes to depth, and has being successfully used by major diamond mines including Ekati (BHP) and Diavik (Rio Tinto)

Borehole mining removes the need for pit cut back and associated waste removal

No requirement for significant mining fleet, comprising excavators, haul trucks, loaders and other associated capital equipment

No requirement for drill and blast

Reduction in labour and capital equipment, results in reduced infrastructure requirements, related support staff, and working capital required for consumables such as diesel fuel, spare parts etc.

The above factors result in making borehole mining an economically attractive alternative to conventional open pit mining with lower capital risk.

As bore-hole mining does not require significant waste removal, development of ROM pads, large diesel fuel farms and explosives; there is a reduced environmental footprint compared to conventional mining, thus reducing rehabilitation costs and mine closure planning

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Merlin Accommodation Camp; Kitchen and Administration Facilities

Merlin Mine Private Airstrip

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Rio Tinto’s 1997 feasibility study on the Merlin Diamond Project made the following comments in regard to:

› Discovering more small pipes:

“Small pipes, such as Ywain, may be fairly common in the field,…..”

Merlin has commenced onsite exploration of the Mine Lease using a ground EM34 geophysical exploration tool. New targets already identified, previous data too widely spaced to discover all potenial Ywain/Gwain size pipes. Next stage to use ground gravity geophysical tool.

Gravity target

EM34 target

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Rio Tinto’s 1997 feasibility study on the Merlin Diamond Project also made the following comments in regard to:

› Discovering more large pipes:

“There is some potential for significantly larger pipes,….”

› Discovering new kimberlite fields:

“Within 100km radius of Merlin, there are seven areas in which both indicators, microdiamonds and in some instances commercial sized diamonds, have been recorded. A small kimberlite pipe was found at one location, in a structural position similar to the pipes at Merlin. This evidence indicates that the Merlin field is part of a broader kimberlite province.” and..

“ These factors (cretaceous cover, poor preservation of indicator minerals) while inhibiting the exploration effort, generally increase the possibility of other kimberlite fields and larger pipes to be present in the province.”

Evidence of a new kimberlite field is highlighted in Legend International’s ground such as the Abner Range Project located 50km to the west of Merlin.

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Lancelot / Tintagel – High priority target area

Evidence of commercially sized diamonds, microdiamonds and indicator minerals strongly suggest presence of a second diamond field

Trench mapping and heavy mineral sampling has led to the identification of indicator mineral bearing eluvial material, further trenching and sampling has been completed with samples being processed

Arnhem Land – Under explored but highly prospective for diamond bearing Kimberlites

Merlin Diamonds has a contractual right to obtain an 80% interest in 2 tenements in the prospective western region of Arnhem Land. These tenements are at the application stage

Seppelt Pipes, North Kimberly – Mining lease continues to retain commercial potential

Merlin Diamonds has identified an Inferred Resource of 1.57Mcts within the Ashmore, Seppelt 1 and 2 Kimberlite pipes, with Seppelt 2 having an exceptional grade of over 180cpht

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Represents a significant and unique opportunity to explore for

a large volume, high value, alluvial diamond deposit

Two granted tenements cover an area of approx. 1,150km²,

approx. 100km north of Merlin

Only major alluvial concentration at a low point, in this

catchment, known to host significant diamond deposits

Alluvial gravels drain through the MacArthur River, deriving

material from the catchment that contains the Merlin

kimberlite field and the Abner Range

The work program began in Sep 2011, following approval of a

Mine Management Plan

By the Dec 2011 quarter, Merlin Diamonds had extracted 5000

tonnes of alluvial material from 5 different work areas

3000 tonnes of material from 3 pits have been processed at

the Merlin Mine

22 diamonds weighing a total of 1.09cts were recovered and

diamond quality to be assessed upon completion of processing

Results to date confirm that the Borroloola Alluvial Gravels

host a macro-diamond population

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Mr. Joseph Gutnick Executive Chairman and Chief

Executive Officer

A leading mining industry entrepreneur, Mr Gutnick is the

President/ Chairman and CEO of the Gutnick Network of Companies. He was responsible for overseeing the discovery of the Plutonic 11 million

ounce gold deposit and the discovery, development and operation of the world class

Bronzewing and Jundee gold mines in Australia. Mr Gutnick is a Fellow

of the Australian Institute of Mining and Metallurgy, a Fellow of the AIM,

a Member of the Institute of Company Directors in Australia, and a former Director of the World Gold

Council. He was awarded the prestigious Diggers award at the

1997 Diggers and Dealers Industry Awards.

Mr. Craig Michael Executive Director

Mr. Michael has extensive experience as a geology

professional in the mining and resources industry. He is

currently Executive Director of the Gutnick Network of

Companies including Executive Director of Merlin Diamonds Ltd, Aurum, Inc. and Chief Executive Officer of Paradise Phosphate

Limited. His previous work was with Oxiana Ltd in South East Asia and Sons of Gwalia in the

goldfields of Western Australia. Mr Michael is a member of the Australian Institute of Mining

and Metallurgy and a Member of the Institute of Company

Directors in Australia.

Mr. Henry Herzog Non-Executive Director

Mr. Herzog has over 40 years of corporate experience and

has served in various positions as President, Vice President, and Director of a

number of listed public companies in the mining and exploration sector, both in Australia and the United

States.

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Dr. David Tyrwhitt Non-Executive Director

Dr Tyrwhitt has been involved in the diamond exploration industry

since 1959 when he was first employed by De Beers in Tanzania

as a diamond exploration geologist. He was the CEO and Managing Director of Ashton Mining Ltd from 1988 to 1991 where he was involved in the exploration and feasibility of

diamond deposits in Australia (including Merlin and Argyle),

Scandinavia and South East Kalimantan Indonesia. Since leaving Ashton, he has been

involved in diamond exploration in Canada, China and Australia. Dr

Tyrwhitt was chairman of JORC and whilst there introduced the

diamond reporting code.

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