Stellar Diamonds Regulatory News (STEL)

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18 March 2014

AIM: STEL

Stellar Diamonds plc

("Stellar" or the "Company")

Continued High Grade and Diamond Quality at Tongo Project, Sierra Leone

Stellar Diamonds plc, the London listed (AIM: STEL) diamond development company focused on West Africa, is pleased to announce that bulk sampling at its 1.1 million carat resource Tongo kimberlite dyke project in Sierra Leone continues to yield high grades and exceptional quality diamonds.

Highlights:

· Continual high grade results from bulk sampling programme at Dyke-1 of Tongo Project as part of Definitive Feasibility Study ('DFS')

· Consistent outstanding gem quality diamonds recovered with stones up to 6.7 carats in size

· Processing to date has yielded 551.6 carats at an average grade of 126.3cpht

· Grade anticipated to increase as further diamonds are recovered from re-processing

· Objective to recover a minimum 1,000 carat parcel for diamond grade and value confirmation

· Previous results established a grade of 120cpht at a modelled value of US$248 per carat

· DFS on Dyke-1 targeted to be completed by YE 2014, with production decision to follow

Stellar Diamonds Chief Executive Karl Smithson commented, "The results from the on-going bulk sampling programme are excellent and continue to underscore the high grade nature of the Tongo Dyke-1 kimberlite. The presence of larger gem stones up to 6.7 carats in size bodes well for the diamond valuation, which will be undertaken as part of the definitive feasibility study that is on track for delivery towards the end of 2014. Our bulk sampling programme will continue with the objective of recovering a parcel of at least 1,000 carats for diamond grade and value modelling on the current 1.1 million carat JORC compliant resource, calculated on one of four diamondiferous dykes on the project."

Dyke-1 Bulk Sampling Progress:

Bulk sampling at Dyke-1 is being undertaken as part of the DFS and has to date delivered 2,150 tonnes of material to the sample stockpile. Processing of this material commenced in mid-January 2014 using the Company's on-site 5 tonne per hour dense media separation ('DMS') plant.

The sample can be broadly divided into sub-samples based on their location on the kimberlite. Sample-9 was collected through drilling and blasting a 33m section of the kimberlite to a depth of up to 17m. This sample comprises fresh, hard kimberlite. Dilution was measured in detail at 44%, based on the blasting width. The results announced on 12 February 2014 were all derived from Sample-9.

Sample-10 was collected to the west of Sample-9 and closer to surface, where the kimberlite and surrounding country rock was heavily decomposed. This material was collected by use of an excavator over 77m of strike and to a depth of approximately 3m. This sample experienced an expected higher amount of dilution of the kimberlite with country rock (67%) due to the method of collection.

Dyke-1 Bulk Sampling Results:

To date a total of 990.5t of kimberlite and country rock have been processed via the DMS plant. This has yielded 551.6 carats of +1mm stones at a diluted grade of 55.7cpht. Taking into account the dilution the actual in-situ kimberlite grade is calculated at 126.3cpht.

As can be seen in the table below, results for Sample-10 at 150.7cpht are higher than Sample-9 at 110.9cpht. This is attributed to the fact that Sample-10 is heavily decomposed and therefore there was a higher liberation of diamonds during the processing when compared to the harder Sample-9. Re-processing and re-crushing of Sample-9 is likely to liberate more diamonds, and therefore the grade is expected to increase from the currently calculated 110.9cpht. The average grade of 126.30cpht is also likely to increase as a result of this reprocessing.

Sample-9 results are inclusive of the initial results announced on 12 February 2014. It is positive to note that that the grade has improved (up to 110.9cpht from 106.7cpht) even before the re-processing of the sample.

Bulk sampling and processing will continue for the next two quarters and the Company will continue to report on results regularly.

Tongo Dyke-1 Diamond Characteristics

The diamonds from Sample-9, which were collected from fresh kimberlite, are classified as being 88% gem quality. Many of the diamonds from Sample-10 have a coating due to the weathering of the kimberlite. These coatings are expected to be removed after deep acid boiling (acidisation), meaning the current 72% gem quality content is likely to significantly increase upon cleaning.

The Company notes that the diamonds can be classified as predominantly sawables and makeables with a small clivage component. Some 35 stones are greater than 1 carat in size, with the largest diamond being a high quality octaheadal gem stone of 6.7 carats.

Pictures of the latest Diamonds from the Tongo project can be seen at the following link http://stellar-diamonds.com/operations/photo-gallery/tongo-project/latest-diamonds 

About Stellar Diamonds plc:

Stellar is an AIM quoted (AIM: STEL) West African focused diamond development company which is advancing the 1.1 million carat Tongo Dyke-1 resource into the feasibility stage and towards a production decision in 2014. The Company continues to prepare for its resource definition programme at its 5 hectare Baoulé pipe in Guinea. In addition, Stellar holds the 3 million carat Droujba project and continues to pursue both diplomatic and legal channels to ensure the proper reinstatement of its Kono licences.

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