Stellar Diamonds Regulatory News (STEL)

NOT FOR DISTRIBUTION IN THE UNITED STATES OR FOR DISSEMINATION TO US NEWS WIRE SERVICES.

20 April 2015

AIM: STEL

Stellar Diamonds plc

("Stellar" or the "Company")

First 5,000 Carats Achieved from Trial Mining at Baoulé Kimberlite, Guinea

Stellar Diamonds plc, the London listed (AIM: STEL) diamond development company focused on West Africa, announces an operational update from trial mining at its 75% owned, five hectare Baoulé kimberlite pipe ("Baoulé" or "the Project") in Guinea.

Highlights:

· Trial mining has yielded a total of 5,087 carats to date at an average grade of 13.5 cpht

· High quality gems continue to be recovered, including stones of 12.6 carat and 10.0 carat

· First sale of 733 gem quality carats from Baoulé last month realised $195,000 for an average value of $266 per carat (which formed part of a larger sale of 4,414 carats)

· Included in this sale was a 5.55 carat stone which sold for US$5,000 per carat and several stones which exceeded US$1,000 per carat underpinning the high value and quality of some Baoulé gems

· Next diamond sale planned for May 2015

· Objective to recover a total of 15,000 carats to complete the trial mining phase and provide a basis for deciding whether to advance Baoulé to commercial scale mining

· JORC Resource to be confirmed on completion of trial mining. Current in-house estimate of 3.3 million carats based on previous drilling and average target grade of 15cpht

Stellar Diamonds Chief Executive Karl Smithson commented:

"Good progress continues to be made from trial mining at Baoulé. Our objective is to produce 15,000 carats from this exercise to enable us to determine the grade, value and presence of large stones in the pipe, with a view to using this information to consider a decision to advance Baoulé to commercial scale mining. It is pleasing that we have achieved our maiden revenues following the first diamond sale from Baoulé, as well as other Stellar projects. We are currently planning the next export and sale of Baoulé goods and remain committed to targeting additional diamond sales throughout 2015. I look forward to updating shareholders on progress as we continue the trial mining programme at Baoulé and in the process increase our cashflow."

Trial Mining Production and Processing

Trial mining of the eastern lobe of the Baoulé kimberlite pipe has continued during the first quarter of 2015. In order to maximise the pit area in preparation for the second 3m cut, mining progressed towards the eastern and southern margin of the pipe where a lower grade contact breccia was recently encountered, reducing the average grade to 13.5cpht at a 1.25mm cut off. This has resulted in fewer carats being produced than anticipated at this point in time, but mining and processing of the second cut is expected to see a return to higher grades, based on the results realised from the first cut of the lobe.

Simultaneous to this mining, stripping of the western lobe of the pipe has commenced in advance of the rainy season. Overburden and ground disturbed by diamond diggers is currently being stripped to access the uncontaminated kimberlite in preparation for bulk sampling.

The processing plant is running at a steady state average capacity of approximately 50 tonnes per hour over a double shift (16 hours). The kimberlite material remains predominantly weathered, however some harder blocks of kimberlite are being encountered. Since these blocks are too hard to scrub but are also too soft to efficiently crush, they are being sent to an oversize stockpile where they are broken down with an excavator prior to being re-fed into the plant to ensure maximum diamond liberation and integrity of results.

The overall objective of the trial mining exercise is to produce up to 15,000 carats for grade and diamond value determination of the Baoulé pipe. The Company remains on track to achieve this objective and is currently one third of the way through this exercise. A short operational update of the mining can be found at the following link:

http://stellar-diamonds.com/wp-content/uploads/2015/04/Baoule-Presentation-Apr-15.pdf 

Diamond Results

A total of 5,015 carats have been recovered to date from Baoulé at a +1.25mm cut off, giving an average grade of 13.6cpht. This still compares favourably with the historically reported +1mm grade of 13cpht. A total of 380stones greater than 1 carat have been yielded and numerous gem diamonds of over 5 carats and more recently gem diamonds of 10.0 and up to 12.6 carats have been recovered to date.

Diamond Sale

The first diamond sale of 2015 was announced on 24 March 2015. Included in this sale were 733 carats of gem quality diamonds from Baoulé that sold for an average of US$266 per carat and which realised US$195,000 in revenues. This sale included a stone of 5.55 carats which attracted a price of US$5,000 per carat, as well as other stones that exceeded US$1,000 per carat in value, which demonstrates the high quality of some of the goods at Baoulé. Stellar opted to withhold 1,617 carats of predominantly near gem/industrial goods from this sale as the Company believed a stronger price could be realised for the goods in future sales. Stellar will present these withheld goods for sale alongside the next export from Baoulé at a sale currently planned for May 2015. Further information will be announced in relation to the next planned sale, when the final number of carats and definitive dates are established.

Ebola Update

Although the Ebola virus persists in some areas of Guinea there have been no recorded cases in the area of operation for some time. Nevertheless, the Company remains vigilant and adheres to strict operating procedures to ensure the continued well-being of all employees and the local communities.

Competent person

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 26 years' experience.

About Stellar Diamonds plc

Stellar is an AIM quoted (AIM: STEL) West African focused diamond development company which has commenced trial mining of its Baoulé kimberlite in Guinea, and is progressing the 1.45 million carat Tongo Dyke-1 resource in Sierra Leone through the mining licence application process. In addition, Stellar holds the 3 million carat Droujba project in Guinea and continues to pursue diplomatic channels to ensure the proper reinstatement of its Kono licences in Sierra Leone.

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