viewStellar Diamonds PLC

Stellar Diamonds successfully lists on AIM


African Aura Mining (TSX-V: AUR, AIM: AAAM) has announced that its 31.8% owned Stellar Diamonds (AIM: STEL) was admitted to trading on the AIM market of the London Stock Exchange today, which injected a fresh £5 million into Stellar.

On admission, Stellar has 96.5 million ordinary shares in issue and a market capitalisation of approximately £19 million.

“We are delighted that Stellar will be increasingly autonomous with a fresh cash injection...to deliver on its growth strategy. African Aura firmly believes Stellar has the potential to become a leading diamond producer and explorer in Africa. For African Aura the listing crystallises value and evidences our solid strategy to create value for our shareholders,” said Chief Executive of African Aura Luis da Silva.

African Aura is the principal shareholder in Stellar and used to hold a 58.5% stake in the company prior to the admission of the enlarged capital to trading on AIM.

Stellar Diamonds was formed as a result of the merger of Stellar Diamonds Limited and West African Diamonds (AIM: WAD). WAD acquired Stellar for a consideration equating to approximately three times the value of WAD, represented by an approximate 75:25 split of the share capital in the enlarged group prior to the issue of placing shares, with 75% set to be allotted to Stellar shareholders and the remaining 25% to WAD shareholders.

The company has a portfolio of projects in West Africa, including Mandala and Bomboko in Guiena, which are currently in production and undergoing expansion programmes. At the time of the merger, Mandala had produced over 53,000 carats and Bomboko had produced over 2,000 carats.

Stellar also owns rights over four high-grade kimberlites that are the focus of further development, including the Droujba kimberlite pipe and the Bouro kimberlite dykes, which have demonstrated grades of up to 500 cpht (carats per hundred tonnes) and 200 cpht respectively.

The necessary resolutions to approve the reverse takeover of West African Diamonds by Stellar were passed last week, allowing the parties to go ahead with the transaction. The reasons behind the acquisition included the corporate and operational synergies, which are expected to bring down the operational cost base per carat, reduction of financial risk by securing revenue streams from two producing alluvial mines and a stronger project pipeline with four high grade kimberlites at various stages of development.

The placing proceeds will be used to capitalise existing producing mines, accelerate the company’s production ramp up and advance key kimberlite development and exploration projects.

Quick facts: Stellar Diamonds PLC

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Market: AIM
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