Amendment to Loan Conversion Arrangements

B"H

25 June 2020

Shefa Gems Ltd.

("Shefa Gems" or the "Company")

Amendment to Loan Conversion Arrangements

Shefa Gems (LSE: SEFA), a company focused on advanced exploration and development of multi-gemstone projects in Northern Israel, announced on 19 May the "Conversion of £1.25 Million of Loans into Equity" (RNS number: 2678N).

After discussions with certain Loan Holders, the following changes have been agreed:

Instead of converting £1,117,765 into 25,447,303 ordinary shares of NIS0.1 each in the capital of the Company, it has been agreed that £1,423,939 will be converted into 28,922,507 ordinary shares of NIS0.1 each in the capital of the Company, amounting to 16.45 per cent. of the Company's issued share capital.

Furthermore, David Ben David, the Chief Financial Officer of the Company, has informed the Company that he will not convert his convertible loan notes over a total amount of £79,480 into 1,589,590 ordinary shares of NIS0.1 in the capital of the Company, but instead will convert his convertible loan notes at a later date. Mr Ben David decided to hold off from converting his loans to the Company due to limitations regarding the maximum number of shares available to the Company's shares for issue in June 2020. He intends to convert his loan notes later this year.

Application will be made for these new Ordinary Shares to be admitted to the Main Market of the London Stock Exchange with dealings expected to commence on 30 June 2020.

Following the issue of the 28,922,507 new Ordinary Shares to the Loan Holders, the Company's enlarged issued share capital will be 204,759,442 Ordinary Shares. This figure of 204,759,442 Ordinary Shares may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA's Disclosure and Transparency Rules.

On 30 June 2020, the Company will grant the Loan Holders one unlisted warrant for every share received on conversion, exercisable for a period of 24 months from the date of the conversion, at a price of 10 pence per warrant. In the event that the Company's share price before 30 June 2022 does not at any time reach 10 pence per share, the Loan Holders will receive additional shares at that date in such an amount as to make the total number of shares issued to the Loan Holders have a value, based on the market price at that time, of double their individual investments.

Director Shareholding

Gershon Fraenkel is a Director of the Company and is currently interested in 60,000 ordinary shares (representing 0.03% of the current issued share capital). Following the conversion of his loan notes, he will be interested in 1,118,671 ordinary shares (representing 0.55% of the enlarged share capital).

Tali Shalem, CEO of Shefa Gems, said: "The decision of certain loan note holders to exercise their conversion rights at an average price of 4.9p per share being a significant premium over the current market price is a welcome sign of confidence in the company and its significant progress."

- Ends -

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Notes to Editors

About Shefa Gems Ltd

Shefa Gems Ltd (LSE: SEFA) is an explorer and developer of precious stones deposits operating in Northern Israel. Exploration activity is managed by professionally skilled and technically competent personnel and is accompanied by an international team of geological experts with decades of proven experience in their fields. It has two flagship projects, Mount Carmel and the Kishon Reach.

With its international geological consultant team, Shefa Gems has established a "Source to Sink" geological model and the presence of a Target Mineral Assemblage of gemstones ("TMA Suite") in both primary volcanic sources and in secondary alluvial deposits lying within the Kishon catchment, on Mount Carmel and in the Zevulun and Yizre'el valleys and their margins. The TMA suite comprises Precious Stones (Diamond, rare natural moissanite, sapphire, ruby, Carmel Sapphire™, garnet, hibonite, spinel, ilmenite) and heavy minerals including zircon and rutile.

All exploration activities are conducted under international standards and the internationally recognised SAMREC 2016 Code. Its three permits, granted to it by the Commissioner of Mines at the Ministry of Energy, Natural Resources Administration, Israel, extend over an area of approximately 488,366 Dunams (48,836 hectares) that includes the Kishon River, the volcanic bodies on Mount Carmel, the Zevulun and Yizre'el valleys and their margins. 

Alongside its exploration activities, the Company is building on the launch of the "Heaven on Earth" jewellery collection and developing the Company's "Mine to Market" strategy to promote unique jewellery collections utilising Shefa Gems' suite of precious gemstones.

The Company upholds environmental values and protects the nature in the areas where it operates, cooperating fully with all authorities.  

The exclusive "Heaven on Earth" collection is now available to view online on the website of the designer Yossi Harari at: https://www.yossiharari.com/collections/heaven-on-earth-1

For further information please visit the website at www.shefagems.com