Stellar Diamonds Regulatory News (STEL)

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17 January 2011

AIM: STEL

Stellar Diamonds plc

("Stellar" or the "Company")

Drilling Intersects Significant New Zone at Droujba kimberlite Pipe in Guinea

Stellar Diamonds plc, the London listed (AIM:STEL) diamond mining and exploration company focused on West Africa, provides an update on the drilling programme at the Company's 100% owned Droujba kimberlite pipe in south east Guinea.

Highlights:

·; Drilling of geophysical target intersects 138m of kimberlite adjacent to known pipe

·; Seven holes completed to date for 1,364 metres

·; Deepest kimberlite intersection to date of 126m from surface

·; Petrographic analysis of kimberlite samples completed and assigned a "high interest" rating

·; Diamond results from first two sample batches expected shortly

Karl Smithson, Chief Executive Officer, commented:

"The drilling programme at Droujba is progressing well with a potentially significant extension intersected immediately to the south west of the known pipe which is coincident with a geophysical target. This could represent a "blind lobe" to the pipe at depth. Further drilling around the pipe and this extension will enable us to generate an initial geological model of the ore body upon completion of the programme.

"With this exciting development, Droujba continues to demonstrate considerable potential as we progress with our planned drill programme. Along with Tongo, Droujba will remain a key focus for the Company as we look to accelerate development of our kimberlite projects in West Africa.

"I look forward to updating shareholders on the continued progress at Droujba in Guinea. I also anticipate being in a position to announce the grade results from the first bulk sample at the Tongo kimberlite project in Sierra Leone in the near future as the plant construction is almost complete."

Drilling Programme

Seven holes for 1,364 metres have been completed at Droujba under the current 3,000m drill programme with kimberlite intersected in all but one hole. The deepest intersection of the kimberlite so far is 126m from vertical. One hole was drilled beneath a ground geophysical anomaly directly adjacent and southwest to the known pipe and intersected kimberlite between 56m to 194m, giving a down hole intersection of 138m and true intersection width of 90m. This potentially represents a blind blow or lobe that could significantly increase the sub-surface potential of the pipe.

Further drilling will be orientated towards delineating the pipe so that a first geological model can be defined. In addition, remaining priority geophysical targets will be drilled to test for further kimberlite discoveries.

Microdiamond Analysis

The first two samples dispatched to the Saskatchewan Research Council laboratory in Canada for microdiamond analysis are already being processed and results are expected by the end of January. These samples comprise 197kg of hypabyssal facies and 94kg of kimberlite breccia.

Petrographic Analysis

Seven selected samples of kimberlite (4 samples), contact breccia (2 samples) and country rock (1 sample) were submitted to Mike Skinner, a renowned kimberlite petrologist with over 35 years experience, for petrographic analysis. The four kimberlite samples were identified under thin section as macrocrystic, phlogopite hypabyssal kimberlites and were all assigned a high interest rating with respect to diamond potential.

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 previous 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