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UPDATE - Stellar shares up 9%, Tongo programme continues to unearth 'exceptional' stones

Last updated: 01:15 19 Mar 2014 AEDT, First published: 02:15 19 Mar 2014 AEDT

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Shares in Stellar Diamonds (LON:STEL) rose 9% after it said it continued to recover high grades and ‘exceptional’ quality stones from its Tongo kimberlite dyke project in Sierra Leone.

So far the group has recovered 551.6 carats from its bulk sampling programme at an average grade of 126.3 carats per hundred tonnes, which is higher than the estimated grade 120 carats per hundred tonnes.

Not just that, a number of ‘outstanding’ gem quality diamonds have been uncovered with stones up to 6.7 carats in size.

Stellar said it anticipates the grade will increase as further diamonds are recovered from re-processing.

The bulk sampling of the 1.1mln carat Tongo dyke is taking place as part of the definitive feasibility study, which is on track for completion by the end of this year.

Chief executive Karl Smithson said: “The results from the on-going bulk sampling programme are excellent and continue to underscore the high grade nature of the Tongo Dyke-1 kimberlite.

“The presence of larger gem stones up to 6.7 carats in size bodes well for the diamond valuation, which will be undertaken as part of the definitive feasibility study that is on track for delivery towards the end of 2014.

“Our bulk sampling programme will continue with the objective of recovering a parcel of at least 1,000 carats for diamond grade and value modelling on the current 1.1 million carat JORC compliant resource, calculated on one of four diamondiferous dykes on the project.”

At 11.15pm, the stock, up almost 100% in the year to date, rose 0.17p to 2.07p. Broker Daniel Stewart holds a price target of 5p, suggesting there is plenty of headroom for growth.


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