Droujba Bulk Sampling Results (0205G)

TIDMSTEL

RNS Number : 0205G

Stellar Diamonds PLC

25 June 2012

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

25 June 2012

AIM: STEL

Stellar Diamonds plc

("Stellar" or the "Company")

Further Encouraging Diamond Grades from Bulk Sampling of the Droujba Kimberlite Pipe in Guinea

Stellar Diamonds plc, the London listed (AIM: STEL) diamond development company focused on West Africa, is pleased to provide an update on the initial results of the phase-2 bulk sampling programme at the Company's diamondiferous Droujba kimberlite pipe in Guinea.

Highlights:

   --      2,023 dry tonnes of kimberlite collected from Droujba pipe from 8 separate sample pits 

-- Processing of first sample and initial part of second sample returned diluted dry grades of 70cpht and 109cpht (+1mm)

   --      Largest gem quality diamond recovered to date of 6.9 carats 
   --      Other diamonds of 9.55, 7.68, 5.55, 4.25 and 4.0 carats 
   --      Bulk sampling of the adjacent Katcha kimberlite also to be undertaken 

Chief Executive Karl Smithson commented:

"We continue to make strong progress as we advance the Droujba pipe through the bulk sampling stage. The early results from the first phase-2 samples processed are very encouraging, with high grades and the presence of larger gem quality diamonds than have previously been recovered from the earlier bulk sampling. Furthermore, the recovery of large stones up to 9.55 carats from the small volume of kimberlite processed is indicative that Droujba may have a coarse stone size distribution. Once the processing has been completed the diamond parcel will be exported to Antwerp for valuation and upgrading of the independent resource model. We remain confident of the potential that Droujba offers and we continue to focus on the near term objective of increasing the size and confidence level of the presently defined 2.5 million carat inferred resource."

Bulk Sampling and Results

As previously reported, four bulk samples (DBS1-4) were collected from a depth of 15m from surface at the base of the Droujba pipe. Each sample was accurately measured and the specific gravity and moisture content was carefully determined in order that the dry tonnage could be calculated. These four samples weighed 919 dry tonnes in total and yielded 669.55 carats in the +1mm size fraction, for a diluted grade of 72.75cpht. The first diamond parcel weighing 506.46 carats achieved an average value of $48/ct: on the basis of a larger more representative sample, the average diamond value could increase to $70/ct, as reported in the Droujba independent resource statement.

It was decided to increase the size of the bulk sampling to provide a larger diamond parcel on which to base a more confident diamond valuation. A further eight bulk samples of approximately 250 tonnes each were extracted, for a total of 2,023 dry tonnes. These samples have been stockpiled adjacent to the Company's 5 tonne per hour DMS plant and processing has commenced.

Processing of the first sample (DBS-5), weighing 244.48 dry tonnes, yielded 171.20 carats for a grade of 69.98cpht, which is consistent with the established average diluted grade for the pipe. However, initial processing of the second sample DBS-06 yielded 151.30 carats from the first 138.06 tonnes processed for a diluted grade of 109.59cpht. The higher grade of DBS-6 could be a function of less internal country rock dilution. The average grade from all sampling to date is now 76.20cpht, slightly higher than reported in the resource statement.

The largest gem quality diamond recovered from the recent processing weighed 6.9 carats in size. A further 29 diamonds were all larger than 1 carat in size, including stones of 9.55, 7.6, 5.55, 4.25 and 4.00 carats. The presence of these larger stones in the relatively small volume processed is indicative that Droujba may have a coarse stone size distribution.

 
 Sample                   Dry Tonnes processed   Carats Recovered   +1mm dry grade 
                                                                     (cpht) 
-----------------------  ---------------------  -----------------  --------------- 
 Phase-1 bulk sampling 
  (DBS1-4 completed)      919.26                 669.55             72.75 
-----------------------  ---------------------  -----------------  --------------- 
 Phase-2 bulk sampling 
  (DBS-5 completed)       244.48                 171.20             69.98 
-----------------------  ---------------------  -----------------  --------------- 
 Phase-2 bulk sampling 
  (DBS-6 in progress)     138.06                 151.30             109.59 
-----------------------  ---------------------  -----------------  --------------- 
 Totals and average 
  grade                   1,301.80               992.05             76.20 
-----------------------  ---------------------  -----------------  --------------- 
 

All samples are processed via the Company's 5 tonne per hour DMS plant with diamond recovery being achieved by X-Ray Flowsort and with grease back up in secure conditions and under observation from the Government Mines Monitoring Officer.

Katcha Bulk Sampling

The 5km long Katcha kimberlite dyke runs adjacent to the Droujba kimberlite pipe. Historical exploration results, as reported by previous operators, indicate grades for Katcha of up to 100cpht.

During the resource drilling of the Droujba pipe some six holes for 805m were drilled into Katcha over a strike length distance of 800m, with intersections up to 1.3m true width being made at depths of up to 100m from surface. Considering the added resource potential that Katcha represents to the overall Droujba resource base, a bulk sample from the dyke will be collected and processed to establish the diamond grade and value.

The bulk sample site is targeted some 600m to the north west of the Droujba pipe which coincides with the historical bulk sample location. Some 9m of overburden has been stripped to access in-situ kimberlite dyke with a measured width of 1.7m. Bulk sampling will be undertaken with the objective of collecting a minimum of 300 tonnes of kimberlite. Results are expected over the coming months.

In accordance with the AIM Rules for Companies, the information in 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 23 years' experience.

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 kimberlite dyke project in Sierra Leone, which combined have a JORC Compliant, inferred diamond resource of 3.1 million carats. The Company recently announced a dispute with the Ministry of Mines in Sierra Leone over its two Kono licences.

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: [phone] 

Northland Capital Partners Limited

(Nominated Advisor and Broker)

   Gavin Burnell, Edward Hutton                                          Tel: [phone] 

Daniel Stewart & Company plc

(Co-Broker)

   Martin Lampshire, Antony Legge                                     Tel: [phone] 

Pelham Bell Pottinger

   James MacFarlane, Joanna Boon                                    Tel: [phone] 

This information is provided by RNS

The company news service from the London Stock Exchange

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