RNS Number:5349J
Dwyka Diamonds Limited
02 April 2003


DWYKA DIAMONDS LIMITED


RE:  UPDATE ON MERGER WITH GRAVITY CAPITAL LIMITED AND OPERATIONAL ACTIVITIES

Summary

  * The merger with Gravity Capital Limited ("Gravity Capital") is on track -
    the documents have been lodged with ASIC and Gravity Capital expects to be
    able to send the Merger documentation to shareholders shortly.

  * The field season in India is underway, with results expected before the
    end of the current quarter.

  * The cash position of Dwyka Diamonds Limited ("Dwyka") is currently A$5m.

  * Negotiations are underway for the sale of the alluvial diamond mining
    operations, exploration properties and related plant and equipment.  The
    Directors of Dwyka expect a favourable outcome for shareholders from these
    negotiations. The Directors anticipate that the sale of these assets will
    involve a significant cash surplus and the opportunity to retain a major
    indirect interest in the underlying mineral assets.

Merger

The merger documentation has been forwarded to ASIC for review and a Court date
has been requested.  Both the Board of Gravity Capital and the Board of Dwyka
remain firmly committed to the merger with the operational synergies and diamond
discovery potential that it will bring.

India

The Indian exploration programme has recommenced.  The likelihood of further
discoveries of diamondiferous pipes near the 5 located to date, is considered to
be moderate to high.

Sale of South African alluvial operations

Negotiations are currently underway with a party interested in acquiring 100% of
Dwyka's South African alluvial diamond mining interests.  It is anticipated that
Dwyka would retain a significant indirect interest in these assets.

The orderly sale of plant and equipment has commenced in South Africa and the
Directors currently anticipate there will be a cash surplus at the end of the
divestiture programme.

The industrial products division continues to operate on a positive cash flow
basis.

                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

MSCUUVRROURSRAR