Stellar Diamonds Making Progress at Baoule and Tongo Projects

- March 27th, 2015

Stellar Diamonds plc (LSE:STEL) released its unaudited interim results for the six months ended December 31, 2014, noting that during that time trial mining started up on schedule and on budget at its Baoule kimberlite pipe project, located in Guinea.

Stellar Diamonds plc (LSE:STEL) released its unaudited interim results for the six months ended December 31, 2014, noting that during that time trial mining started up on schedule and on budget at its Baoule kimberlite pipe project, located in Guinea. Trial mining has since reached target capacity of 50 tonnes per hour processed.

Other Baoule highlights include:

  • Gem quality diamonds up to 9 carats in size recovered and first exports achieved
  • Maiden sales and gross revenues totalling US$417,122 from 4,414 carats post-period (including goods from other Stellar projects)
  • Further diamond exports and sales expected in 2015

Highlights from the company’s Tongo kimberlite dyke-1 project include:

  • Bulk sampling programme completed generating a diamond parcel of 1,182 carats
  • 35% increase in inferred diamond resource to 1.45 million carats
  • 37% increase in average diamond grade to 165cpht, based on bulk sampling data
  • 42% increase in the scoping study NPV10 to US$75m for surface and underground mine

Key financial points are as follows:

  • US$0.9m invested to build and commission the Baoulé trial mining operation
  • Administrative costs reduced significantly to US$0.9m during the 6 month period (H2-13: US$1.5m)
  • Cash and diamonds held for sale of US$0.5m at period end
  • US$1.05m of funding in the period through the issue of equity and credit
  • Further US$1.55m raised post period through the issue of equity in January 2015

Karl Smithson, chief executive of Stellar, commented:

Stellar has made significant progress at both Baoulé in Guinea and Tongo in Sierra Leone during the report period. Bringing Baoulé into trial mining production during the Ebola crisis was a remarkable achievement and it is pleasing to see our first export and sales cycle being successfully completed. Processing to date has yielded over 4,100 carats at a grade of over 13cpht. We expect to continue the trial mining with an objective of at least 100,000 tonnes being processed in aggregate to establish the grade and value of the pipe with confidence, but importantly to recover some large, high value diamonds that the Aredor area of Guinea is world renowned for.

At Tongo we also successfully completed our bulk sampling programme despite the Ebola outbreak. As a result the inferred diamond resource for Dyke-1 was increased to 1.45 million carats with increasing grade and diamond values. A surface mining study has also been completed, which identified a technique that is expected to allow us to mine from surface for three years whilst underground mine development is completed. This positively impacts on expected project economics and we intend to conduct an updated preliminary economic assessment which should justify the decision to apply for a mine lease for the project during 2015.

Click here to read the full Stellar Diamonds plc (LSE:STEL) press release.

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