Sierra Leone : Stellar on the way for mining licence for Tongo diamonds

Stellar Diamonds Plc is awarded, it said, the environmental licence that marks an important milestone in the development of the Tongo kimberlite diamond project into commercial production. It now expects that the National Minerals Agency will draw up the Tongo Mining Licence for consideration and signature by the Minister of Mines and Mineral Resources.

The Tongo licence is located in the heart of the well known Tongo Diamond fields in eastern Sierra Leone. Since 2007, the AIM-listed company has carried out systematic and extensive exploration programmes which have culminated in the establishment of diamond resource of just over 1.45 million carats for the Tongo Dyke 1 kimberlite dyke project. The project forms part of 4.5 million carat combined Tongo-Tonguma mine development which has the potential to be the second largest hard rock diamond mine in West Africa.

Stellar Diamonds established on Tongo-Tonguma kimberlite diamond project an independently generated mine plan which is based on over 66,000m of drilling that has been completed. The plan envisages the production of over 4 million carats, generating gross revenues of more than US$1.2 billion, over a 21 year life of mine.

Initial production at Tongo-Tonguma is scheduled to occur in the first year of development, building up to over 200,000 carats per annum, with a weighted average modelled diamond value of $229 per carat. The Tongo-Tonguma mine is estimated to give Stellar an attributable Post-tax NPV(8) of US$109 million and IRR of 30%.