Stellar Diamonds Regulatory News (STEL)

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6 January 2015

AIM: STEL

Stellar Diamonds plc

("Stellar" or the "Company")

Progress Update on 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") in Guinea.

Highlights:

· Trial mining has yielded a total of 2,145 carats to date at an average grade of 15cpht

· High quality gems continue to be recovered including stones of 8.5ct and 6.6ct

· Processing plant running at target rate of 50 tonnes per hour

· Monthly production of 2,000 carats expected, assuming average grade of 15cpht

· Larger c. 5,900 carat parcel being prepared for first sale, which has been deferred to January 2015 to maximise first revenues, consisting of:

o First exported Baoulé parcel of 941 carats

o Second Baoulé parcel to be exported to Antwerp, increasing Baoulé parcel for sale to c. 2,200 carats

o Inventory of 3,700 carats currently stored in Antwerp from other projects

· Regular exports expected from Baoulé in 2015

Stellar Diamonds Chief Executive Karl Smithson commented:

"We are pleased with the on-going progress of the trial mining at Baoulé. The regular occurrence of larger gem quality stones is highly encouraging, as is maintaining our target plant processing capacity and run of mine grade, in order to achieve our objective of processing 2,000 carats per month during 2015.

"In order to maximise the revenues from our first sale we will conduct a second export from Baoulé in early January to complement the goods of the first export made in December. The planned sale will be scheduled for later in January, when buying activity resumes in Antwerp after the end of year break. Furthermore, we will sell our inventory of diamonds from other projects (approximately 3,700 carats) currently being stored in Antwerp, which will further enhance our first revenues in 2015 from the sale of a total of c. 5,900 carats. I look forward to updating shareholders on our first sale and continual trial mining at Baoulé."

Diamond Exports and Planned Sale

The Company undertook its first diamond export of 941 carats from Baoulé to Antwerp in December 2014. This parcel was cleaned, sorted and valued prior to a planned sale later that month. Due to the onset of the end of year holidays in Antwerp the sale of this parcel was deferred until January 2015 when buying activity resumes in the trading centre.

Stellar therefore plans to export a second parcel of c. 1,250 carats from Baoulé in the first half of January and add those diamonds to the first parcel currently held in Antwerp to increase the size of the Baoulé parcel to be offered for sale to approximately 2,200 carats.

Furthermore, the Company also holds approximately 3,700 carats in diamond inventory, which have been recovered from various phases of bulk sampling on the Company's other projects and will offer these for sale in January 2015 in order to maximise total revenues from the first sale process in January.

During 2015, the Company expects to export and sell goods every two months in order to generate regular cash flow as well as determine with a high degree of confidence the diamond grade, value and frequency of large, high value diamonds from the Baoulé kimberlite pipe.

Trial Mining Production

Trial mining of the eastern lobe of the five hectare Baoulé kimberlite pipe continues to progress well. The material being mined comprises predominantly green, weathered hypabyssal kimberlite and a yellow kimberlite breccia that often overlays the green kimberlite. The processing plant is running at a steady state average capacity of 50 tonnes per hour over a double shift (16 hours) and if maintained should, at the existing grade of 15cpht, yield the targeted 2,000 carats per month.

Diamond Results

A total of 2,145 carats have been recovered to date at a +1.25mm cut off, giving an average grade of 14.6cpht. This compares favourably with the historically reported +1mm grade of 13cpht. A total of 138 stones greater than 1 carat have been yielded and numerous gem diamonds of over 5 carats and up to 9.2 carats have been recovered to date. This would suggest that the pipe is host to a large stone size distribution and justifies the strategy of trial mining 100,000 to 200,000 tonnes of kimberlite over the coming year in order to determine the presence of large, high value stones in the pipe. Gem and near gem diamonds represent approximately 60% of the diamond population recovered.

Internal Resource Model

Stellar has previously modelled and reported the historical drilling data for the Baoulé pipe. A target resource of 22 million tonnes to a depth of 300m was established by in-house (non JORC) modelling. Assuming the current +1.25mm mining grade of 15cpht is maintained, this would suggest that a target resource of 3.3 million carats is contained in the pipe to the 300m depth. During the course of 2015 Stellar plans to undertake reconfirmation drilling and commission an independent resource estimate.

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.

Ebola Update

Operations at Baoulé are continuing but under strict conditions. The Company has been at the forefront of elevating awareness amongst the workforce and the surrounding local communities and civic leaders of the threat of Ebola and its prevention. Increased levels of sanitation and health screening have been established at the camp and project sites and also the homes of the Company's employees. Restrictions on staff travel are also implemented and a total ban on travel to the epicenters of the Ebola virus in Guinea is in place. The Company continues to monitor the situation very closely to ensure the continued well-being of all employees and that of the local communities.

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 a definitive feasibility study. 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.