Stellar Diamonds Regulatory News (STEL)

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6 February 2012

AIM: STEL

Stellar Diamonds plc

("Stellar" or the "Company")

Encouraging Diamond Grades from Lion-5 Kimberlite Project in Kono, Sierra Leone

Stellar Diamonds plc, the London listed (AIM: STEL) diamond mining and exploration company focused on West Africa, provides initial bulk sampling diamond grade results from the Lion-5 kimberlite dyke at its 87km2 Kono diamond licence in eastern Sierra Leone.

Highlights:

·; Lion-5 kimberlite mapped over 1,990m with an average width of 1.5m at the bulk sample site

·; 346 dry tonnes of kimberlite sampled yielding 244 carats for in-situ grade of 70cpht

·; Diamonds of 4.45ct, 3.22ct, 3.07ct, 3.0ct & 2.57ct, with 62% of stones observed as gem quality

·; Previous trial mining at Kono by Stellar produced 4,200 carats of high quality diamonds

Chief Executive Karl Smithson commented:

"These results indicate that the Lion-5 kimberlite has significant exploration potential. The dyke forms part of an extensive swarm of kimberlite dykes that run from the Stellar licence areas into the adjacent mine lease held by Koidu Holdings, which is embarking on a US$150million mine expansion programme. The kimberlite grade of 70cpht is consistent with our previous trial mining results from the Pol-K and Bardu kimberlites at Kono, where we previously recovered 4,200 carats of good quality diamond from our established 50 tonne per hour DMS plant. It is clear that the Kono permits hold significant value for Stellar and we intend to continue the exploration and evaluation work to develop this potential."

Lion-5 Bulk Sampling and Processing

The Lion-5 kimberlite has been mapped over a distance of 1,990m to date, however based on satellite imagery and the presence of previous artisanal workings the kimberlite is expected to extend beyond this distance. The kimberlite was excavated by Stellar over a 60m length, adjacent to the Koidu Holdings mining lease, with observed widths ranging from 84cm to 198cm, and with the average width calculated at 148cm. Since the kimberlite was competent in nature, drilling and blasting was required to extract it. Dilution with granitic country rock during this process was calculated at 14%.

The kimberlite extracted was transported to the Company's active sampling plant at Tongo, some 60km to the south. Here the sample was crushed and processed via a 5 tonne per hour Dense Media Separation plant with diamond recovery being by grease tables in a secure container. The whole process was observed by a Government Mines Monitoring Officer.

Some 400.59 tonnes of kimberlite/granite was extracted from the sample trench, of which 346.35 tonnes was calculated to be kimberlite. From this sample some 243.8 carats were recovered for a +1mm in-situ dry grade of 70.39cpht. Encouragingly, approximately 62% of the diamonds recovered (by weight) are classified as gem quality, with the five largest stones recovered weighing 4.45ct, 3.22ct, 3.07ct, 3.00ct, 2.57ct. The results of the processing are summarised below.

Re-processing of the plant tailings at a smaller crusher setting remains to be completed so it is likely that more carats will be recovered from the sample and hence the calculated diamond grade will increase.

Kono Project

The Kono project comprises two permits held by Basama Diamonds Limited, a 100% owned Stellar subsidiary. During the years 2006 to 2008 a joint venture with Petra Diamonds Limited sunk a number of exploration shafts to test certain kimberlites in the Kono dyke swarm. The focus was primarily on the Pol-K and Bardu kimberlite shafts where a total of 4,200 carats of diamonds were recovered at diamond grades of approximately 65cpht. However, the grade of the Bardu kimberlite exceeded 140cpht during its final days of sampling. The underground trial mining was placed on care and maintenance during the 2009 financial crisis and in May 2010 Petra exited the joint venture, returning to Stellar its 51% project equity in return for 4.5m Stellar shares at a price of 20p per Stellar share. Expenditure on the Kono project to date exceeds $17m.

In accordance with AIM rules the information in this announcement has been reviewed by Karl Smithson, Chief Executive of Stellar, a qualified geologist with 23 years' experience.

About Stellar Diamonds plc

Stellar is a London (AIM: STEL) listed diamond mining and exploration company focussed on West Africa where programmes aimed at generating maiden resource estimates at Droujba (Guinea) and Tongo (Sierra Leone) are ongoing and are expected to be delivered in the first quarter of 2012. Bulk sample processing of the Lion-5 dyke at Kono (Sierra Leone) is also ongoing.

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

Stellar Diamonds plc

Karl Smithson, Chief Executive Tel: +44 (0) 20 7257 2930

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