Stellar Diamonds Regulatory News (STEL)

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1 February 2011

AIM: STEL

Stellar Diamonds plc

("Stellar" or the "Company")

Encouraging Initial Diamond Results from Droujba Kimberlite Pipe in Guinea

Stellar Diamonds plc, the London listed (AIM:STEL) diamond mining and exploration company focused on West Africa, is pleased to report encouraging initial diamond recoveries from drill core samples of the Company's 100% owned Droujba kimberlite pipe in south east Guinea.

Highlights:

·; 538 diamonds recovered from 291.62kg of Kimberlite

·; 5 commercial sized diamonds larger than 0.85mm recovered

·; Largest recovered diamond measures 5.60mm x 2.80mm x 1.80mm

·; Majority of diamonds are classified as white, colourless and transparent

·; Macrodiamond grade forecast to be undertaken

Karl Smithson, Chief Executive Officer, commented:

"These excellent results confirm that the Droujba kimberlite pipe has the potential to be significantly diamondiferous. It is encouraging to not only see a large number of diamonds recovered, but also to confirm the presence of commercial sized stones in the relatively small sample processed.

"We have made strong progress with our kimberlite projects in both Guinea and Sierra Leone and with aggressive work programmes planned for Droujba as well as Tongo we believe that we have established a strong base from which to unlock shareholder value. We look forward to updating the market on progress made at Droujba and our other key development projects in the near future."

Microdiamond Analysis Results

The first two samples of Droujba kimberlite drill core dispatched to the Saskatchewan Research Council laboratory in Canada ("SRC") for microdiamond analysis comprised 196.72kg of hypabyssal facies kimberlite and 94.54kg of kimberlite breccia. A total of 538 diamonds larger than the 0.075mm sieve size were recovered from both samples, with five diamonds being larger than the 0.85mm sieve size. Of these five commercial sized diamonds, four were classified as white/colourless and transparent, with one diamond classified as off-white and transparent. The hypabyssal kimberlite sample yielded an average of 2.49 diamonds per kilogram of kimberlite, whereas the kimberlite breccia averaged 0.50 diamonds per kilogram of kimberlite. However, the kimberlite breccia yielded the largest diamond that on one axis measured over 5mm, and weighed 0.18 carats.

The following table summarises the caustic fusion results from the Droujba kimberlite samples:

The SRC is an independent laboratory that is accredited by the Standards Council of Canada to the ISO/IEC Guide 25 standard for diamond recovery by caustic fusion.

Drilling Programme and Further Analyses

The planned 3,000m drilling programme is progressing well, as reported on 17th January, 2011. As drilling continues the drill log information will be collated in order to obtain a provisional geological model for the pipe down to a depth of at least 120m. Additional kimberlite material will also be dispatched to the laboratory in Canada for further microdiamond analysis, which will then be modeled in terms of macrodiamond grade forecasts and provide more robust data on the potential commercial grade of the pipe.

About Stellar Diamonds plc

Stellar is a London (AIM: STEL) listed diamond mining and exploration company that has a portfolio of projects in West Africa. Two projects in Guinea, Mandala and Bomboko, are undergoing mining and trial mining respectively, which provide cash flow to the Company.

Stellar also owns full rights over four high-grade kimberlites that are the focus of exploration and development. In Sierra Leone at the Tongo project a bulk sampling programme is currently underway on one key kimberlite to assess the diamond grade and value, with initial results expected in the near future. At the Kono underground trial mine, bulk sampling by the Company has produced 4,200 carats as part of an economic evaluation exercise. In Guinea drilling is ongoing on the Droujba kimberlite pipe and bulk sampling is being planned on the high grade Bouro kimberlite dyke, which is adjacent to the Company's Mandala diamond mine.

For further information please contact the following or visit the Company's 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 707971

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