Stellar Diamonds Regulatory News (STEL)

NOT FOR DISTRIBUTION IN THE UNITED STATES OR FOR DISSEMINATION TO US NEWS WIRE SERVICES.

AIM: STEL

16 October 2014

Stellar Diamonds plc

("Stellar" or the "Company")

SHARE SUBSCRIPTION

ISSUE OF WARRANTS

Stellar Diamonds plc, the AIM quoted (AIM: STEL) diamond mining and exploration company focused on West Africa, announces that the Company has raised approximately £396,180 before expenses through a subscription of 25,560,016 new ordinary shares of 1p each (the "Subscription Shares") at a price of 1.55p per Subscription Share (the "Subscription"). Participants in the Subscription have also been issued one half warrant per Subscription Share to subscribe for 12,780,008 new ordinary shares, in aggregate, also at a price of 1.55p per share ("The Warrants"). The Warrants are exercisable immediately and expire on 30 April 2015.

Use of proceeds

The funds placed will be used to purchase a number of earth moving machines ("Machinery") that will be allocated to the Tongo and Baoulé projects in Sierra Leone and Guinea respectively. Baoulé will receive most of the equipment in an effort to boost the mining and production rate as part of the large scale bulk sampling, or trial mining, over the next twelve months. Stellar recently reported that first diamonds had been recovered from Baoulé as part of the successful processing plant commissioning process and now looks to increase mining and processing capacity.

These machines have a total aggregate value of approximately Euro0.5 million and will be purchased from Stellar's major shareholder Foradex Invest SRL. Stellar has conducted extensive due diligence of the second hand market for similar earth moving machines and has confirmed that the units and prices offered by Foradex are fair and market related.

The Subscription

The Subscription has raised a total of £396,180 through the issue of 25,560,016 Subscription Shares at the subscription price of 1.55 pence per Subscription Share. The Subscription Shares will be issued credited as fully paid and will rank pari passu in all respects with the existing Ordinary Shares, including the right to receive all dividends and other distributions declared on or after the date on which they are issued. Application will be made for admission to AIM of the Subscription Shares ("Admission") which is expected to occur, and trading to commence at 8.00 a.m. on 21 October 2014.

Total voting rights

Following Admission, the Company's total issued share capital will comprise of 723,567,658 Ordinary Shares ("Issued Share Capital"). The Company does not hold any ordinary shares in treasury. Therefore the total number of shares with voting rights in the Company will be 723,567,658. This figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company following Admission.

Substantial Shareholdings

Foradex Invest SRL ("Foradex"), the Company's largest shareholder, is subscribing for all 25,560,016 Subscription Shares. Following Admission, Foradex will hold 187,371,150 Ordinary Shares representing 25.9 per cent. of the Company's Issued Share Capital.

Full exercise of the Warrants would increase Foradex's interest to 27.18 per cent. of the Company's Issued Share Capital as enlarged by the Warrants

Related Party Transaction

In view of Foradex being a substantial shareholder in the Company, the Subscription by Foradex, the issue of Warrants to Foradex and the purchase of the Machinery from Foradex (together the "Transaction") constitutes a related party transaction under the AIM Rules. The Directors who are independent of the transaction consider, having consulted with the Company's nominated adviser, Daniel Stewart, that the terms of the Transaction are fair and reasonable in so far as the Company's shareholders are concerned.

About Stellar Diamonds plc:

Stellar is an AIM quoted (AIM: STEL) West African focused diamond development company which is advancing its diamondiferous Baoulé kimberlite in Guinea towards trial mining, as well as progressing the 1.1 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 both diplomatic and legal 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.