Stellar Diamonds Regulatory News (STEL)

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12 April 2012

AIM: STEL

Stellar Diamonds plc

("Stellar" or the "Company")

Kono Licence Dispute

Stellar Diamonds plc (the "Company"), the London listed (AIM: STEL) diamond mining and exploration company focused on West Africa, announces it has received a letter from the Ministry of Mines of Sierra Leone (the "Ministry") in relation to its two licences in the Country's Kono district (the "Licences"). The Company has operated over the Licences since their initial grant in January 2005 in accordance with prevailing law, including the most recent annual renewal dated 25th May 2011. Licence renewals for the 2012 year were submitted to the Ministry of Mines on 2nd November 2011 in accordance with the Mines and Minerals Act of 2009.

The letter from the Ministry asserts that the Ministry ought not to have granted the renewals of the Company's licences in 2010 under the Mines and Minerals Act of 2009 and that as a result the Company no longer has mineral rights over the licences.

The Company disputes the assertions and is seeking clarification of the position with the Ministry. The Company has not received any similar correspondence on the Tongo exploration licence which was also renewed in November 2011 on the same basis as the Kono licences. Furthermore, the Company received a letter of good standing from the Ministry of Mines for the Tongo licence dated 30th December 2011.

Chief Executive Karl Smithson commented:

"Whilst this uncertainty is frustrating and unfortunate we strongly believe that our legal tenure over the Kono licences is intact and will be engaging with the Ministry of Mines to clarify and then satisfactorily resolve this issue.

"Over the past 12 months we have been conducting exploration and bulk sampling over the Lion kimberlite dyke project which is strategically located in the Kono diamond district. The Company has recently announced independent resource estimates from our key projects of Droujba and Tongo where we have established an initial resource base of 2.5 million carats and 0.66 million carats respectively."

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.

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