11 Nov 2013 07:00
NOT FOR DISTRIBUTION IN THE UNITED STATES OR FOR DISSEMINATION TO US NEWS WIRE SERVICES.
11 November 2013
AIM: STEL
Stellar Diamonds plc
("Stellar" or the "Company")
Mandala Diamond Mining Licence in Guinea Successfully Renewed
Stellar Diamonds plc, the London listed (AIM: STEL) diamond exploration and development company focused on West Africa, announces the renewal of its Mandala mining licence in south eastern Guinea.
Highlights:
· Mandala alluvial mining licence renewed for a further five year period
· Considering options to restart production following improvement in rough diamond prices
· Previous mining at Mandala yielded 128,000 carats at a grade of 33cpht with gems up to 37 carats
Chief Executive Karl Smithson commented:
"The renewal of the mining licence at Mandala allows the Company to resume mining and generate cash flow. Based on the previous mining rates a further 200,000 carats are modelled to remain in resource and there is significant potential for additional untested channels. Following the improvement in the rough diamond market, the Board is currently considering funding options at the project level which would enable the Company to bring Mandala back into production in early 2014. Separately, the bulk sampling which forms part of the project feasibility study at the Tongo kimberlite dyke project in Sierra Leone is on going. I look forward to updating shareholders on our progress in the near future."
Mandala Licence
The Company was recently informed by the Ministry of Mines in Conakry that the Mandala mining licence was renewed as from 17th October 2013 for a further period of five years. As part of the renewal process, and in accordance with the Mining law, the licence was reduced in area and covers a total of 5km2, centred on the diamondiferous valleys of the Mandala and adjoining N'Keleyani rivers.
Mandala Alluvial Diamond Mine
Between 2009 and 2011 Stellar produced 128,000 carats at an average grade of 33cpht at Mandala. The project yielded a number of gem quality diamonds, including a fancy yellow stone of 37 carats. The overall average price realised was $30 per carat, reflecting the prevailing weak rough diamond market at the time and the lower quality smaller stones. The mine was placed on temporary care and maintenance in 2011, pending an improvement in the market conditions and outlook.
The rough diamond market has since shown an on-going improvement in prices and Stellar is therefore currently considering funding options at the project level to re-open the Mandala mine. An independent resource (not in accordance with the JORC code) for the mine has been calculated at approximately 135,000 carats. The majority of this diamond resource is located within the N'Keleyani river valley where previous mining by Stellar yielded average diamond grades of over 50cpht and up to 100cpht in some areas. Based on potential extensions to these diamondiferous gravel horizons, Stellar is estimating an increase in this resource to approximately 200,000 carats at Mandala.
About Stellar Diamonds plc
Stellar is a London (AIM: STEL) listed West African focused diamond exploration and development mining company which is advancing the 1.1 million carat Tongo Dyke-1 resource into the feasibility stage and towards a production decision. In addition, the Company holds the Droujba project which has a defined 3 million carat resource. Stellar remains in dispute with the Ministry of Mines in Sierra Leone regarding its two Kono licences and is pursuing both diplomatic and legal channels to ensure the proper reinstatement of these licences.
For further information 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 7010 7686
Philip Knowles, Chief Financial Officer
Daniel Stewart & Company plc
(Nominated Adviser & Broker)
Antony Legge, James Thomas, Colin Rowbury Tel: +44 (0) 20 7776 6550