Guinea/Sierra Leone – Despite the tough year experienced, Aim-listed diamond development company Stellar Diamonds has continued to make tremendous progress and has delivered a trial mining operation at Baoulé and advanced the Tongo project to the mining licence application, CEO Karl Smithson says.
In its final results for the period ended 30 June 2015, Stellar reported that it experienced poor market conditions, which led to widespread erosion of market capitalisations as well the Ebola epidemic in Guinea and Sierra Leone which further drove the poor market sentiment of those companies working in the West African region.
In contrast to the bad conditions, trial mining of the 5 ha kimberlite pipe at the Baoulé project in Guinea commenced. Processing via its 100tph dense-media separation plant has so far yielded over 6 400 carats at a +1.25mm run-of-mine grade of 13.5cpht with maiden revenues of US$700 000 with the most recent diamonds sale in May achieving an average value of $156 per carat.
A number of diamonds have achieved high prices with a 10 carat fancy yellow stone fetching $6 800 per carat which indicates the high value potential of the diamonds contained in the Baoulé pipe.
Meanwhile, at the Tongo Dyke-1 Project in Sierra Leone, Stellar spent the most part of 2015 actively compiling the various exploration data from the project into a preliminary economic assessment (PEA), mine plan and financial model. The PEA delivered a very robust mine plan and financial model, which prompted the board to advance the project to the mining licence application stage.
The independent PEA outlines an 18 year life of mine at a modest capital requirement of $24.8 million yielding a targeted 1 million carats and $386 million in revenues. Early cash flow expected to be generated and low capital requirement of $24.2 million for surface and underground mining is needed.
“We look forward with excitement to the year ahead which we believe will be transformational for Stellar. Securing the mining licence and necessary funding to get Tongo into mine development and production, and continued positive results from trial mine evaluation of Baoulé should hopefully deliver the returns that shareholders deserve,” says Smithson.