Stellar Diamonds plc is a listed diamond production and development company that was formed from the merger of Stellar Diamonds Limited and West African Diamonds plc. The Company has a portfolio of projects in West Africa. Two projects in Guinea are in production, Mandala and Bomboko, which provide robust cash flow to Stellar. Mandala has produced over 78,000 carats whereas Bomboko has produced over 4,000 carats (to 28 June 2010), generating over $2.7 million in revenue. Both production projects are currenly undergoing expansion programmes that will increase monthly carat production and revenues to the Company. Stellar also owns rights over four high-grade kimberlites that are the focus of further development.
Stellar Diamonds chief “extremely pleased” with latest drilling results at Droujba
Stellar Diamonds (LON:STEL) chief executive Karl Smithson declared himself “extremely pleased” with the latest drilling results from the Droujba kimberlite pipe project in eastern Guinea.
Independent geological modelling by CAE Mining indicates the potential for a 15 million tonne mine to a depth of 350 metres. There are plans to drill down to 400 metres to assess the full extent of the Droujba pipe.
Interestingly the main pipe and southern blind pipe coalesce giving increased size with depth.
Bulk sampling work is scheduled to begin in December and construction of the plant and the de-watering of the historic workings have already begun.
This bulk sampling when it occurs will be the basis for a maiden JORC compliant resource due in the first quarter of next year.
Stellar has drilled 31 holes for a total of 6,425 metres so far.
CEO Smithson said: "We are extremely pleased with the significant progress we have made with drilling of the Droujba kimberlite pipe, which continues to deliver encouraging results.
“Geological modelling undertaken by independent consultants CAE Mining is guiding the drill programme and demonstrating that Droujba has significant tonnage potential.
“We are also on track to commence the bulk sampling programme in December.
“The results from our drilling and bulk sampling programmes will enable the company to produce a maiden JORC compliant independent resource estimate in the first quarter of 2012. I look forward to keeping shareholders updated as we continue our progress."
Droujba is the bigger of the two main Stellar prospects (the other is Tongo in Sierra Leone).
Discovered in the 1960s by the Russians, it was mined down to 20 metres, and it was believed there was nothing below that depth. However this has been thoroughly disproved by the Stellar drilling programme.
Last month the company began resource drilling at its high-grade Tongo kimberlite diamond project in eastern Sierra Leone.
It expects the 6,000 metre diamond core drilling programme will help define a maiden inferred resource estimate to at least 200m below surface.
Bulk sampling has already yielded 926 carats for undiluted grade of 115 carats per hundred tonnes, with potential in-situ kimberlite value estimated at up to US$220 per tonne.
The company recently signed up E-Global Drilling to undertake the 6,000m core drilling at Tongo, with an option to extend the meterage if necessary. This first phase of drilling will be focussed on the 2.5km strike length of Tongo Dyke 1 in order to establish lateral and depth continuity of the kimberlite ore body at every 100m along strike.
Holes are being planned to intersect the kimberlite at depths of 50m, 100m and 200m from surface, with some holes targeting intersections at 300m vertical depth.
In addition, the Tongo Dyke 4, located 1km to the north of Dyke 1, will also be drilled as part of the programme. Previous mini-bulk sampling of Dyke 4 undertaken by Stellar returned grades of 100chpt.
CAE Mining is also overseeing the Tongo the resource drilling and bulk sampling programmes as part of its mandate to independently establish a maiden inferred resource estimate for the project.
The outlook for the rough diamond market is encouraging. Demand from the rapidly growing middle and upper classes of China and India is underpinning prices, while demand from the US, still the main consumer of the gemstones, will maintain that upward pressure.