5 Jul 2012 07:00
NOT FOR DISTRIBUTION IN THE UNITED STATES OR FOR DISSEMINATION TO US NEWS WIRE SERVICES.
5 July 2012
AIM: STEL
Stellar Diamonds plc
("Stellar" or the "Company")
Resource Expansion Drilling at Tongo Kimberlite Project, Sierra Leone
Stellar Diamonds plc, the London listed (AIM: STEL) diamond development company focused on West Africa, is pleased to announce commencement of its Phase-2 resource expansion drilling of the 660,000 carat Dyke 1 kimberlite at its Tongo diamond project in eastern Sierra Leone.
Highlights:
·; Objective of doubling existing 660,000 carat inferred diamond resource
·; Up to 3,000m of drilling to be undertaken with 10 holes planned
·; Drilling of 0.6km un-drilled section of 2.5km long dyke and to 300m depth for whole resource
·; CAE Mining Africa appointed as independent technical consultants to compile an updated resource statement
Chief Executive Karl Smithson commented:
"We are firmly focused on significantly expanding the resource at Tongo, which has shown exciting potential to date. This drilling and evaluation programme is designed to double Tongo's existing inferred diamond resource to over 1.2 million carats. The previously announced resource has a grade of 120cpht and a modelled diamond value of between $225 and $270 per carat, demonstrating the strength on Tongo within the Stellar portfolio."
"Upon achieving this next key milestone Stellar intends to embark upon a pre-feasibility study in order to better define the economics of the resource, prior to the onset of underground trial mining. At current grades and diamond values, the in-situ value of the Dyke 1 kimberlite is estimated by the Company to be almost $300 per tonne, making it potentially one of the highest known value per tonne kimberlites globally. We expect the completion of drilling and upgrade of the resource statement during the fourth quarter of this year and I look forward to updating shareholders as we progress."
Resource Drilling
Boart Longyear has been contracted to drill up to 3,000m in July and August and has recently mobilised to site and commenced drilling. Previous drilling of Dyke 1 was completed over a 1.9km section of the 2.5km long dyke, to a depth of up to 200m from surface. This current 3,000m programme is designed to drill the as yet untested 600m strike of Dyke 1 and to extend the inferred resource to a depth of 300m from surface. Assuming grade continuity along strike and at depth, which will be modelled by microdiamond analysis, and assuming similar widths to the dyke as already drilled this would enable the current 660,000 carat resource to potentially be increased to over 1.2 million carats.
Independent Consultants
CAE Mining Africa has been appointed to oversee the exploration drilling programme, independently verify the technical data collected and update the current resource model with this technical data. An updated independent resource report will be compiled and issued by CAE Mining Africa on completion of the exercise, currently expected for early fourth quarter of 2012.
Current Tongo Resource
In March 2012, the CAE Mining Africa technical resource report detailed an inferred resource for Tongo of 660,000 carats at a grade of 120cpht, with a modelled diamond value of between $225 and $270 per carat (all at a +1mm cut-off). This resource report was announced by Stellar on the 26th March 2012 and further details can be found on the Company's website. Key details are summarized in the table below:
Tongo Dyke-1 | +1.0mm diamonds | +1.18mm diamonds |
Tonnes | 550,000 | 550,000 |
Grade (cpht) | 120 | 100 |
Carats in resource | 660,000 | 550,000 |
Diamond Value Lower (US$/ct) | 225 | 245 |
Diamond Value Mid (US$/ct) | 247.5 | 267.5 |
Diamond Value Upper (US$/ct) | 270 | 290 |
$ per tonne in-situ at Mid Diamond Value (US$/t) | $297.0/t | $267.5/t |
In accordance with the AIM Rules for Companies, the information in 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 23 years' experience.
About Stellar Diamonds plc
Stellar is a London (AIM: STEL) listed West African focussed diamond mining and exploration company which is advancing the Droujba kimberlite pipe in Guinea and the Tongo kimberlite dyke project in Sierra Leone, which combined have a JORC Compliant, inferred diamond resource of 3.1 million carats. The Company recently announced a dispute with the Ministry of Mines in Sierra Leone over its two Kono licences.
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
(Co-Broker)
Martin Lampshire, Antony Legge Tel: +44 (0) 20 7776 6550
Pelham Bell Pottinger
James MacFarlane, Joanna Boon Tel: +44 (0) 20 7861 3232