Stellar Diamonds Regulatory News (STEL)

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13 June 2016

AIM: STEL

Stellar Diamonds plc

("Stellar" or the "Company")

Trial Mining Evaluation Completed at Baoulé kimberlite in Guinea

Stellar Diamonds plc, the London listed (AIM: STEL) diamond development company focused on West Africa, is pleased to provide an operational update from trial mining at its 75% owned, five hectare Baoulé kimberlite pipe ("Baoulé" or "the Project") in Guinea.

Highlights:

· 100,000 tonne bulk sample completed

· 11,808 carats recovered at an average grade of 11.4cpht at a +1.25mm cut off

· Grade of the eastern lobe higher than western lobe at 13.3cpht vs. 9.8cpht respectively

· Over 8,400 carats sold to date in three diamond sales realising over US$1 million in revenues

o Gem diamonds of high quality achieving prices of up to US$6,800 per carat

· Sale of over 3,100 carats planned later this month

· Diamond value and grade modelling under way as part of establishing the diamond resource targeting ~3 million carats

Stellar Chief Executive commented:

"The trial mining exercise at Baoulé has been successfully completed, ahead of schedule, through the processing of over 100,000 tonnes of kimberlite from the eastern and western lobes of the 5 hectare pipe. A total of 929 stones greater than 1 carat have been yielded including numerous high value gem and fancy coloured (yellow) diamonds. Additionally as announced on 15 March 2016, one 55 carat stone has been recovered, which confirms the Company's belief that the Baoulé pipe is a source of large diamonds that are renowned in the Aredor area of Guinea. The results show a clear difference in grade and diamond quality between the eastern and western lobes, with the volumetrically larger eastern lobe being of higher grade and quality. With the higher grade area identified, we intend to sell a further 3,188 carats later in June, with these diamonds all arising from the western lobe. This planned sale will add to US$1 million generated to-date from diamonds sold, which has contributed significantly to the costs of the exercise. We will then complete the necessary diamond grade and value modelling as part of the resource estimation exercise, with our resource target remaining approximately 3 million carats contained within the Baoulé pipe. This will then allow us to formulate the next development steps for the project."

Trial Mining Production and Processing

Trial mining evaluation of the Baoulé kimberlite pipe was recently completed through the mining, extraction and processing of over 100,000 dry tonnes of kimberlite. The geology of the pipe is complicated in parts with what seem to be multiple intrusions and brecciated contact zones in both lobes, with the western lobe in particular hosting a number of late stage and cross-cutting kimberlite dykes. For the purposes of evaluation it was not possible to separate and process separately each kimberlite lithology. However, the east and west lobes were sampled and processed separately, which did confirm a difference in grade between the two. Some 46,561 tonnes were processed from the eastern lobe whereas some 56,555 tonnes were processed from the western lobe.

The following link shows a pictorial of the trial mining exercise from start to finish: http://stellar-diamonds.com/wp-content/uploads/2016/06/Baoulé-Trial-Mining-Review-June-2016.pdf

Diamond Results

A total of 11,808 carats have been recovered to date from Baoulé at a +1.25mm cut off, giving an average grade of 11.4cpht. However, it is clear that the eastern lobe has a higher grade at 13.3cpht than the western lobe at 9.8cpht. This could be a consequence of different kimberlite types or processing efficiencies, since it was noted that the western lobe did yield a fewer percentage of -7 sieve stones (

A total of 929 stones greater than 1 carat have been yielded including numerous high value gem and fancy coloured (yellow) diamonds of up to 12 carats in size. The presence of the 55 carat stone confirms the Company's belief that the Baoulé pipe is a source of large diamonds that are renowned in the Aredor area of Guinea.

A full statistical analysis will be made to compare the eastern and western lobes in terms of diamond grade, value and size distribution.

The table below sets out the diamond results to date from Baoulé:

Diamond Sales

A total of three diamond sales have been held to date. Some 8,400 carats have been sold realising US$1 million in revenues. Diamond values have varied widely from US$91 to US$156 per carat depending on the market sentiment at the time of the sale and the diamond mix of the parcels sold. However, it is notable that a number of gem and fancy coloured diamonds commanded premiums and values of up to US$6,800 per carat, confirming the presence of high value stones in the Baoulé pipe.

The fourth diamond sale of over 3100 carats is scheduled for June 2016. The sale will be via online auction using the DDA Trading platform. Viewings of the goods will take place from 20 to 27 June 2016 in Antwerp with the auction closing on 28 June 2016. Results of the auction will be announced soon after the auction is closed and sales proceeds received.

Competent person

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 27 years' experience.

About Stellar Diamonds plc

Stellar is an AIM quoted (AIM: STEL) West African focused diamond company with projects at the trial mining and mine development stages in Guinea and Sierra Leone.

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For further information contact the following or visit the Company's website at www.stellar-diamonds.com.