Stellar Diamonds Regulatory News (STEL)

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6 August 2012

AIM: STEL

Stellar Diamonds plc

("Stellar" or the "Company")

High Diamond Grades from Bulk Sampling of the Katcha Dyke in Guinea

Stellar Diamonds plc, the London listed (AIM: STEL) diamond development company focused on West Africa, is pleased to provide an update on the initial bulk sampling results from the Katcha Dyke at the Company's Droujba project in Guinea.

Highlights:

·; 299 dry tonnes of kimberlite collected from Katcha Dyke to date

·; Processing of first 92 tonnes yielded 173 carats at an average grade of 188cpht (+1mm)

·; Largest gem quality diamond recovered to date of 5.55 carats

·; Previous drilling of 7 holes for 805m intersected kimberlite down to 130m from surface

·; Katcha Dyke has potential to add significant carats to the overall Droujba kimberlite resource

Chief Executive Karl Smithson commented:

"Bulk sampling of the first three Katcha Dyke samples has returned a significantly high grade of 188 carats per hundred tonnes, far in excess of the anticipated 100 cpht, and gem quality diamonds up to 5.55 carats in size. Based on these initial results and the previous drilling undertaken at Katcha by the Company, Stellar intends to bring a section of the 5km long dyke into the inferred resource category, to complement the 2.5 million carats already confirmed as an inferred resource at the nearby Droujba pipe.

"Bulk sample processing is ongoing at Droujba and we expect to upgrade the global project resource, including both the pipe and the Katcha Dyke, in the fourth quarter of this year prior to commencing a pre-feasibility study to analyse the economics for an open pit mine. I look forward to updating shareholders as we progress."

Katcha Kimberlite Dyke

The 5km long Katcha kimberlite dyke runs adjacent to the Droujba kimberlite pipe where an inferred resource of 2.5million carats has so far been identified. During the resource drilling of the Droujba pipe in 2011, seven holes for 805m were drilled into Katcha over a strike length distance of 600m. Intersections of up to 1.3m true width were made, at depths of up to 130m from surface. Bulk sample from the dyke was conducted in June and July in order to establish the diamond grade and value given its potential inclusion in to the Droujba resource base.

Katcha Bulk Sampling

The bulk sample site was targeted some 600m to the north west of the Droujba pipe. Some 9m of overburden was stripped over a 100m length of Katcha to access in-situ kimberlite dyke. Five separate samples, designated KBS1A to KBS1E, were collected along the length of the trench and were stockpiled separately prior to processing. The kimberlite was measured in detail for each sample so that accurate volumes could be calculated. In addition, a number of samples were collected from each of KBS1A to 1E and analysed for specific gravity and moisture content. These were averaged so that accurate dry tonnage figures could be calculated for each sub-sample prior to processing.

Bulk Sampling Results

The first three sub-samples of the Katcha bulk samples have been processed and the results are shown in the table below. Some 172.90 carats (+1mm) have been recovered from 92.02 dry tonnes of kimberlite to give an average grade of 187.89 carats per hundred tonnes ("cpht"). The separate samples range in grade from 174.44cpht (KBS-1C) to 223.63cpht (KBS-1A). A total of 9 stones over 1 carat have been recovered with the largest being a 5.55 carat gem quality stone. Processing of the remaining 200 tonnes will be completed in September.

All samples are processed via the Company's on-site 5 tonne per hour DMS plant with diamond recovery being achieved by X-Ray Flowsort and with grease back up in secure conditions and under observation from the Government Mines Representative.

Microdiamond Sampling

Some 250kg (wet) of kimberlite have been collected from the Katcha dyke from the bulk sample trench. This sample has been consigned to the Saskatchewan Research Council laboratory ("SRC") in Canada for microdiamond analysis, with results expected in late August. In addition, kimberlite intersections from the drill core will be collected and consigned to SRC for microdiamond analysis so that grade continuity with depth can be confirmed.

In accordance with the AIM Rules for Companies, the information in this announcement has been reviewed by Karl Smithson, Chief Executive of Stellar, a qualified geologist and Fellow of the Institute of Materials, Metals, Mining, with 23 years' experience.

About Stellar Diamonds plc

Stellar is a London (AIM: STEL) listed West African focussed diamond mining and exploration company which is advancing the Droujba kimberlite pipe in Guinea and the Tongo kimberlite dyke project in Sierra Leone, which combined have a JORC Compliant, inferred diamond resource of 3.1 million carats. The Company recently announced a dispute with the Ministry of Mines in Sierra Leone over its two Kono licences.

For further information please contact the following or visit the Company's website at www.stellar-diamonds.com.

Stellar Diamonds plc

Karl Smithson, Chief Executive Tel: +44 (0) 20 7257 2930

Northland Capital Partners Limited

(Nominated Advisor and Broker)

Gavin Burnell, Edward Hutton Tel: +44 (0) 20 7796 8800

Daniel Stewart & Company plc

(Co-Broker)

Martin Lampshire, Antony Legge Tel: +44 (0) 20 7776 6550

Pelham Bell Pottinger

James MacFarlane, Joanna Boon Tel: +44 (0) 20 7861 3232