14 Feb 2013 07:00
NOT FOR DISTRIBUTION IN THE UNITED STATES OR FOR DISSEMINATION TO US NEWS WIRE SERVICES.
14 February 2013
AIM: STEL
Stellar Diamonds plc
("Stellar" or the "Company")
COMMENCEMENT OF ECONOMIC SCOPING STUDIES
Stellar Diamonds plc, the London listed (AIM: STEL) diamond mining and exploration company focused on West Africa, announces that conceptual economic scoping studies on its Tongo and Droujba projects have commenced.
Highlights
·; Commencement of conceptual economic scoping studies on Tongo and Droujba projects
·; Paradigm Project Management ("PPM") appointed as independent consultants
·; Studies to determine financial base case for projects ahead of pre-feasibility stage
Karl Smithson, Chief Executive of Stellar, commented:
We are very pleased to have appointed the highly experienced team at Paradigm Project Management in order to move our key projects of Tongo and Droujba through the preliminary economic scoping stage. Tongo and Droujba currently have a combined inferred diamond resource of 4 million carats. Whilst this resource base can be increased though further exploration drilling, the Board considers that the projects now have critical mass. Moving them through the conceptual study stages is in line with the plans we announced at the time of our recent placing. The results of the studies will enable us to decide whether to move into the pre-feasibility stage later this year."
Conceptual Economic Scoping Studies
The purpose of a conceptual economic scoping study ("CESS") is to define the preliminary economic and business case for advancing the projects to the pre-feasibility stage. The results of both the CESS's will provide the Stellar Board with an independent validation of the respective project economics and allow prioritisation of the projects as they potentially move into the pre-feasibility stage. It is estimated that the CESS's will take up to six months to complete.
The studies will focus on the following aspects of each project:
- Mine design
- Mine planning
- Treatment plant design
- Ore processing options
- Capital budgeting
- Infrastructure options
- Operating cost analysis
- Financial analysis
Tongo CESS Programme
The Tongo Dyke-1 kimberlite has an inferred JORC compliant resource of 1.074 million carats at a modelled average diamond value of $248 per carat. The CESS will investigate a mine plan for an operation that can produce in the region of 80,000 carats per annum over an initial life of mine of 10 years. This CESS will not take into consideration the other resource potential including the deeper zones of Dyke-1 or the nearby Dyke-2 (est. grade 140cpht) and Dyke-4 (est. grade 109cpht).
Droujba CESS Programme
The Droujba and Katcha kimberlites have a combined inferred JORC compliant resource of 2.92 million carats at diamond values of $38 and $48 per carat respectively. The CESS will only investigate a mine plan for an open pit operation at Droujba which potentially holds up to 1.5 million carats of the resource, to be mined at a rate of approximately 300,000 carats per year over five years. This CESS will not take into consideration the other resource potential including the deeper resource areas of the Droujba pipe or the Katcha dyke where only 10% of this 5km long body has been brought into resource to a 150m depth.
About Paradigm Project Management
Paradigm Project Management is a project management and engineering company founded in 2006. PPM is active in the mining, infrastructure and renewable sectors of the economy and focusses on work that spans all phases of concept, prefeasibility and feasibility studies as well as project implementation and operational ramp up. PPM has completed projects in many African countries (including Sierra Leone) and has an extensive client base in the diamonds sector, including Anglo American, De Beers, Gem Diamonds, Rockwell Diamonds, Trans Hex and Lucara Diamonds. PPM has achieved over one million LTI free man hours worked since October 2007.
PPM worked with African Diamonds plc and then Lucara Diamonds Corp. to reduce the overall capital requirements for the Karowe Mine (then AK6 project) from the previously calculated $400M during a feasibility study to $125M. The mine was delivered for this amount and is now in commercial production.
About Stellar Diamonds plc
Stellar is a London (AIM: STEL) listed West African focussed diamond mining and exploration company which is advancing the Droujba and Tongo kimberlite projects in Guinea and Sierra Leone respectively. These projects have a combined JORC compliant, inferred diamond resource of approximately 4 million carats. In April 2012 the Company announced a dispute with the Ministry of Mines in Sierra Leone over its two Kono licences and remains in discussions with the Government of Sierra Leone regarding the proper reinstatement of these licences.
Further information about the Company can be found at www.stellar-diamonds.com
Enquiries:
Stellar Diamonds plc
Karl Smithson, Chief Executive Tel: +44 (0) 20 7010 7686
Northland Capital Partners Limited
(Nominated Advisor and Broker)
Gavin Burnell, Edward Hutton Tel: +44 (0) 20 7796 8800
Daniel Stewart & Company plc
(Joint Broker)
Martin Lampshire, Antony Legge Tel: +44 (0) 20 7776 6550
Pelham Bell Pottinger
James MacFarlane, Joanna Boon Tel: +44 (0) 20 7861 3232