Stellar Diamonds boule
London-listed Stellar Diamonds has entered into a contract for the front-end engineering and design (FEED) study for the underground mine development at Tongo-Tonguma.

Sierra Leone – This forms part of the binding tribute mining agreement and revenue share agreement which diamond development company Stellar Diamonds entered into with with Octea Mining on 28 April 2017.

Stellar Diamonds appointed South Africa-based project management and engineering company Paradigm Project Management (PPM) to prepare the FEED study at the Tongo-Tonguma diamond project in eastern Sierra Leon – a very important first step in the mine development process.

“Having announced the signing of the tribute mining agreement on the Tongo-Tonguma project, we are pleased to already be announcing the signing of the FEED contract [less than a week later],” says Stellar Diamonds CEO Karl Smithson.

PPM are highly experienced in the delivery of diamond mine projects and together with independent engineering and scientific consultancy SRK Consulting they will refine all elements of the mine plan as determined in the preliminary economic assessment to higher levels of confidence in order to reduce the project delivery risk.

“With over 66 000 m of drilling completed at the project to date, we will undertake mine plan related drilling to a depth of 75 m concurrent with the FEED study,” says Smithson.

“Once work commences on the FEED, it is expected to take approximately four months to deliver (including drilling) and will mark the onset of the mine development programme.

FEED Objectives

The FEED results will better define the technical requirements of the project in order to ensure that the correct underground mine design is implemented and that the treatment plant design and layout is properly designed and the unit processes are clearly identified.

Although the combined Tongo-Tonguma projects have seen some 66 000 m of drilling, approximately 5 000 m of additional core drilling will be undertaken at 50 m intervals to better define the near-surface geology of the kimberlites in resource with particular reference to siting of the decline portals, the declines and the development drives for the first two levels of mining to a depth of 75 m below surface.

Furthermore, the drilling will provide the necessary geotechnical and hydrogeological information for the initial years of mining.

The FEED will also define the final capital expenditure definitive estimate and the operating cost budgets.  In addition, the project execution plan will also be developed.  A refined financial model will also be developed for the mine which currently shows a project post-tax NPV of US$167 million and IRR of 33%, of which Stellar’s attributable NPV is $104 million.

Key FEED elements and deliverables

The following list highlights the key FEED work streams and deliverables by PPM/SRK Consulting and Stellar Diamonds:

  • Mining
  • Underground geotechnical
  • Hydrology
  • Underground infrastructure
  • Hydrogeology
  • Surface geotechnical
  • Surface infrastructure
  • Bulk services (power and water supply)
  • Treatment plant
  • Security and product protection
  • Operational readiness (including manpower plan, preliminary project procurement )
  • Procurement and logistics
  • Project execution plan
  • Risk and opportunity management
  • Project Management and services
  • Infill drilling
  • Environmental management in line with approved EIA’s
  • Social and community liaison
  • Legal and permitting

Feature image credit: Stellar Diamonds