Stellar Diamond raises R13 m capital for its West Africa operations

Stellar Diamonds, the London-listed diamond development company has conditionally raised R13 million ( £600,000), to finance the development its mining interests in Guinea and Sierra Leone in West Africa, through a share issue and the sale of diamonds from its Baoulé project.

At present, Stellar is trial mining its Baoulé kimberlite project in Guinea, and is developing the 1,45 million carat Tongo Dyke-1 resource in Sierra Leone through the mining licence application process. In addition, Stellar holds the 3 million carat Droujba project in Guinea and continues to pursue channels to ensure the proper reinstatement of its Kono licences in Sierra Leone.

Issue of equity

The company has conditionally raised the money before expenses, through a placing of 4,4 million new ordinary shares of 1 pence each at 10 pence per share in the company and through the subscription of 1,6 million new ordinary shares at 10 pence per share.

The proceeds of which will be used for general working capital purposes in addition to being used to:

support the Tongo Mine Licence application process

complete the trial mining and diamond sales exercise at Baoulé

complete a maiden resource statement at Baoulé targeting 3 million carats

Baoulé diamond sale

Stellar recently sold 3,291 carats at auction in Antwerp, raising R4,8 million, at an average of R1465,89 per carat. The lower average price when compared with the previous sale in May 2015 (R2,500 per carat) is due to a different mix of goods with a higher proportion of lower quality stones as well as a broadly weaker rough diamond market since mid-last year.
However, certain gemstones fetched over R16,000 per carat and up to R74,000 per carat, mostly white gems and fancy coloured yellows, demonstrating that the Baoulé pipe is yielding some high-quality stones are present.