Stellar Diamonds Regulatory News (STEL)

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26 March 2012

AIM: STEL

Stellar Diamonds plc

("Stellar" or the "Company")

Significant Maiden Diamond Resource at Tongo Kimberlite Dyke Project

Stellar Diamonds plc, the London listed (AIM: STEL) diamond development company focused on West Africa, is pleased to announce the maiden resource for the Tongo kimberlite dyke project in eastern Sierra Leone.

Highlights:

·; 660,000 carats JORC compliant inferred resource for Dyke-1

·; Resource grade of 120 carats per hundred tonnes (+1.0mm cut-off)

·; High quality diamond value, modelled at between $225 per carat to $270 per carat (+1.0mm cut-off)

·; In-situ contained diamond value estimated by Stellar to be between $148m and $178m to date

·; In-situ kimberlite value calculated to be between $270 to $324 per tonne

·; The kimberlite remains open along strike and at depth

·; Potential to grow the resource at Dyke-1 as well as adjacent dykes

Chief Executive Karl Smithson commented:

"The maiden inferred resource for the Tongo project confirms its potential as a high value, high quality growth asset for the Company. This is a significant milestone for Stellar Diamonds, as we look to extract value from our portfolio. The maiden resource at Tongo provides a very strong base from which to move forward with our strategy focused on accelerating our kimberlite projects through to production.

"In addition there is 25% of the mapped strike of Dyke-1 yet to be drilled into the resource category and there is considerable potential to expand the resource with depth. Similar operational kimberlite dyke hosted diamond deposits in South Africa are mined to a depth of 700m below surface. Furthermore, additional resource potential exists from other nearby kimberlite dykes, including the 1km long Dyke-4 which has recently been bulk sampled and returned a diamond grade of 109cpht and an average diamond value of $100 per carat.

The high diamond grades and values exhibited by Dyke-1 make it one of the highest value kimberlites in terms of dollars per tonne worldwide and this maiden resource provides a robust platform for Stellar to unlock significant shareholder value."

Resource Statement

CAE Mining has prepared the independent maiden JORC compliant resource statement. The following data and information were utilised in calculating the resource:

- 32 core holes drilled along a 1.9km section of the 2.5km long Dyke-1.

- Each hole drilled to intersect the kimberlite at a depth of 50m, 100m and either 150m or 200m from surface.

- Microdiamond results from 400kg of kimberlite collected from near surface of Dyke-1.

- Microdiamond results from 123.9kg kimberlite collected from drill core at various depths and along strike intersections of Dyke-1.

- A 948.75 tonne kimberlite bulk sample collected from a 60m long trench of Dyke-1.

- Valuation reports of 1,143 carats of diamonds (+1.0mm) recovered from the Dyke-1 bulk sample.

- Bulk densities collected from numerous kimberlite and country rock samples.

Using the Datamine Studio 3 software all drilling information was collated, the volume of kimberlite calculated and a block model defined. Using a specific gravity of 2.79g/cm3, the total inferred resource of 550,000 tonnes was calculated for the drilled 1.9km section of Dyke-1 down to a depth of 200m from surface.

Using the microdiamond data and bulk sample results, the diamond grade was modelled by plotting cumulative size distribution log probability curves. At a cut off of +1.0mm the modelled diamond grade is calculated to be 120 cpht (close to the bulk sampled grade of 121cpht). At a +1.18mm cut off the modelled diamond grade is calculated to be 100cpht.

The diamond value was modelled using the three exports that comprised the 1,143 carats produced from the bulk sampling. These diamond parcels were valued during 2011 and 2012 and the values were combined and modelled to simulate the likely diamond value in a full production parcel. At a cut off of +1.0mm the diamond value was modelled at between $225 and $270 per carat (mid-range of $248 per carat). At a +1.18mm cut off the modelled diamond value increases to between $245 and $290 per carat (mid-range of $268 per carat).

A summary of the declared inferred resource is given in Table 1 below:

Using the analysis above, it is suggested that there is more contained value and potentially a higher margin in using a +1.0mm cut-off in any future mining scenario. This is due to the unusually high value of the small stones present in the Dyke-1 resource.

Future Resource Potential

This maiden JORC inferred resource is only based on a 1.9km section of the 2.5km long Dyke-1 kimberlite. There is additional resource potential from Dyke-1 and other kimberlites in the licence area, as follows:

- Resource drilling of the 600m section of Dyke-1 that has not yet been drilled.

- Deeper drilling of Dyke-1, to depths of up to 700m in line with other kimberlite dykes mined in South Africa.

- Resource drilling of Dyke-4, which has a bulk sampled grade of 108.5cpht and an average diamond value of $100 per carat (based on three independent valuations). It should be noted, however, that the diamond parcel was small at 91 carats so this is not considered to be a representative parcel size.

- Drilling and bulk sampling of the 800m long Dyke-2 which is located only 200m to the north of Dyke-1. A statistically representative microdiamond sample of Dyke-2 was processed in 2008 and gave a +1.0mm modelled diamond grade of 140cpht.

The Tongo resource statement report will be lodged on the company's website at www.stellar-diamonds.com.

Stellar is currently planning the next phase of resource development work at the Tongo project, with the objective of increasing the resource base and adding further value to the project.

The CAE Mining competent person who prepared the resource statement is Dr. Matthew Field (B,Sc., B.Sc. Hons, M.Sc., PhD., Pr. Sci. Nat, MGSSA, FGS), a senior consulting geologist with 28 years of experience in the diamond sector. In accordance with AIM Rules, Dr. Field and CAE Mining have reviewed the information contained in this news release.

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 and Kono kimberlite dyke projects in Sierra Leone.

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