🕐21.02.11 - 10:27 Uhr
Strategic and Operational Update
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Re: News Releases - Monday, February 21, 2011
Strategic and Operational Update
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NOT FOR DISTRIBUTION IN THE UNITED STATES OR FOR DISSEMINATION TO US
NEWS WIRE SERVICES.
Stellar Diamonds plc ("Stellar" or the "Company")
Stellar Diamonds plc, the London listed (AIM:STEL) diamond exploration
and development company focused on West Africa, announces its strategic
decision to accelerate the development of its hard rock kimberlite
projects and provides an update on its alluvial diamond operations.
Highlights:
Strategic focus on kimberlite portfolio
In light of the strong rebound in diamond prices as evidenced by the
record diamond prices achieved from the recent sale of a parcel of
diamonds from the Companys Bomboko project, as well as those achieved
by other diamond producers, the Board of Stellar has decided that
substantial value may be created by focusing the Companys human and
other resources on fast tracking the development of its hard rock
kimberlite portfolio.
These projects include the Droujba kimberlite
pipe in Guinea and the Tongo kimberlite dyke in Sierra Leone.
If proven
economic, the Board considers that these projects have the potential to
generate substantial revenues over long mine lives and in turn have the
potential to transform Stellar into a significant diamond production
company in Africa.
Recently announced results from drilling at the Droujba kimberlite pipe
indicate that it has a number of hallmarks of a potentially substantial
kimberlite deposit with significant diamonds counts, including
commercial sized stones, and with the pipe remaining open below 120m.
Kimberlite has also been intersected in a priority geophysical anomaly
adjacent to the pipe, confirming the suspicion of an extension to the
pipe at depth.
Similarly the recently announced initial bulk sampling
results from Dyke 1 of the Tongo project suggest it has the potential
to be a high value kimberlite ore body, with an undiluted grade of
130cpht and a diamond value in the order of $169/ct having been
reported.
This suggests that the Tongo kimberlite has a potential
in-situ value of $220 per tonne.
Stellar has also recently embarked on
a bulk sampling exercise of the Bouro North kimberlite dyke, located
1km from the Companys Mandala diamond processing plant in Guinea.
Previously announced grades from Bouro suggest it has the potential to
be significantly diamondiferous, with grades of up to 500cpht reported
which potentially make it one of the most diamondiferous kimberlites
globally.
Proceeds from Diamond Sale
A 10,048 carat parcel of diamonds from Stellars operations was
recently sold in Antwerp for $361,000.
This parcel comprised 9,767
carats from Mandala and 281 carats from Bomboko.
The Mandala goods were
sold for an average price of $31 per carat (2010 average $32 per
carat).
The Bomboko goods, however, sold for a record average price for
the project at $201 per carat (2010 average $116 per carat).
The lower
than average price at Mandala is a reflection of a weaker diamond
parcel based on the lower than normal gem diamond content from the area
mined.
However, the excellent value achieved at Bomboko was driven by
some high value gem stones in the 2 to 4 carat range.
Mandala alluvial diamond project, Guinea
For the period of October 2010 to January 2011 mining and production
processed 86,534 tons of gravel which yielded 13,566 carats at an
average grade of 15.7cpht.
Recent mining has been testing areas in an
adjacent valley to the Mandala valley and this has yielded lower grades
than projected.
Although the production levels at Mandala have realised
the expected increase in tonnage throughput since the end of the rainy
season, the mining grade has not achieved past averages of 30cpht.
This
has impacted negatively on forecast cash flow from the project and as a
consequence the project has not realised an operational profit for this
period.
Once the current Bouro bulk sample is completed the Company
intends to focus its efforts on an as yet un-mined area in the
NKeliyani River valley, once access has been established.
This
extensive area has modelled higher grades based on previous evaluation
work.
However, should this area not realise a significant increase in
grade then the Mandala project will be placed on care and maintenance
and the plant will be modified to process bulk samples from the
high-grade Bouro North kimberlite, if warranted by results.
Bomboko alluvial diamond project, Guinea
Bulk sampling of the lower Bomboko valley resumed in December 2010
after a prolonged rainy season.
An extensive area was identified for
testing with the objective of establishing a potential future mineable
resource.
A number of sampling trenches were excavated and the
underlying gravel hauled to the Bomboko processing plant.
Some 360
carats were recovered at grades ranging between 1cpht to over 6cpht,
with an average grade of 2cpht.
The diamond sale that realised $201 per
carat was comprised of diamonds from this particular area.
Further
areas remain to be tested and a final report will be assembled within
two months on the delineated resource, the results of which will
determine whether or not the area is subjected to future commercial
scale mining.
Chief Executive Karl Smithson commented:
"Over the last three years Stellar has established an exciting
portfolio of key kimberlite diamond projects in Guinea and Sierra
Leone, in line with the Companys long term strategy.
With the recovery
in global diamond prices, the Board of Stellar considers that superior
and potentially transformational value may be created for the Companys
shareholders by focusing on the exploration and development of its hard
rock assets, which include potentially some of the highest grade and
highest value kimberlites globally.
I look forward to updating
shareholders on the results from the on going bulk sampling and
drilling programmes at our Tongo and Droujba projects respectively."
About Stellar Diamonds plc
Stellar is a London (AIM: STEL) listed diamond development company that
has a portfolio of projects in West Africa.
Tongo, Kono, Droujba and
Bouro are all potentially high grade kimberlites that are at various
stages of development.
Stellar is currently focussing on a bulk
sampling project at Tongo in Sierra Leone and completing an initial
drill project and diamond evaluation of the Droujba kimberlite pipe in
Guinea.
For further information please contact the following or visit the
Companys website at www.stellar-diamonds.com.
In accordance with the AIM Rules, the information in this announcement
has been reviewed by Karl Smithson, CEO of Stellar, a qualified
geologist with 22 years experience.
Stellar Diamonds plc
Karl Smithson, Chief Executive
Tel: +44 (0) 7783 707 971
Angus Ogilvie, Finance Director
Tel: +44 (0) 7885 201 903
RBC Capital Markets
Martin Eales / Daniel Conti
Tel: +44 (0) 20 7653 4000
Northland Capital Partners Limited
Charles Vaughan / Gavin Burnell
Tel: +44 (0) 20 7492 4763
Pelham Bell Pottinger
Charles Vivian / James MacFarlane
Tel: +44 (0) 20 7861 3232
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Copyright (c) 2011 STELLAR DIAMONDS PLC (All) All rights reserved.
For more information visit our website at
http://www.stellar-diamonds.com/ or send
mailto:
Message sent on Mon Feb 21, 2011 at 1:17:40 AM Pacific Time
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