Tongo-Tonguma diamonds resource of 4.5mn cts!
Stellar Diamonds focused on West Africa, announces its unaudited interim results for the six months to 31 December 2017 & says, Successful disposal of Guinea assets for gross proceeds US$1.25 million. & Environmental Licence issued for Tongo paving way for issuing of the large scale mining licence subject to licence fee payment being made.
Stellar Diamonds Chief Executive Karl Smithson commented, “The interim reporting period has primarily been focussed on sourcing the necessary funding to bring the Tongo-Tonguma project into production. The capital markets in the UK have proven extremely difficult to raise funds for junior mining companies in recent years.
Furthermore, the market capitalisation of Stellar during the last six months hovered around the US$2 million level, which provided additional challenges of raising capital to develop the mine in Sierra Leone. However, we were pleased to report on 1st February 2018 that a possible share offer to acquire Stellar by ASX listed Newfield Resources, at a significant premium for Stellar shareholders, was received which, if successful and alongside a planned fundraise by Newfield Resources, would also bring the required project development capital for Tongo-Tonguma.
Alongside any possible offer for the Company and subsequent to the period ended 31 December 2017, Newfield Resources has advanced to Stellar an unsecured US$3 million loan with which to primarily commence the FEED programme, mine plan drilling and, as a result of the recent completion of the tribute mining agreement, payment of Tonguma mining licence fees of US$1.25 million (covering the period up to July 2018).
The loan will also be used to pay legal and corporate financial advisor costs including those related to the possible offer for the Company. Working capital will therefore remain constrained as we continue discussions with Newfield Resources regarding the possible offer.
“In addition, Stellar completed the disposal of its Guinea assets and three Guinean subsidiary companies to BDG Capital in return for an overall payment of US$1.25 million, meaning Stellar can focus its resources on the Tongo-Tonguma project in Sierra Leone.”
Tongo-Tonguma Project, Sierra Leone: Just before the interim period commenced, Stellar signed a conditional Tribute Mining and Revenue Share Agreements with Octea Mining, which was formally completed on 28 February 2018. The combined resource of Tongo-Tonguma is established at 4.5 million carats, of which 4 million carats is estimated to be recovered during the initial 21 year life-of-mine.
The recoverable diamond grades of the kimberlites in resource range from 100 carats per hundred tonnes (cpht) to 260 cpht and modelled diamond values range from US$209 per carat to US$310 per carat. Stellar has calculated the potential post-tax returns based on certain assumptions and the fiscal terms of the Tonguma mine lease and Sierra Leone Income Tax Act (2000) as amended, and estimates the post-tax NPV(8) and IRR of US$113 million and 31% respectively to Stellar.
