December 12, 2017

Amendments to Convertible Loan Notes

12 December 2017

AIM: STEL

Stellar Diamonds plc

(“Stellar” or the “Company”)

Amendments to Convertible Loan Notes

Stellar Diamonds plc, the London listed diamond development company focused on West Africa, announces an extension to the longstop date of its US$1.65 million outstanding convertible loan note (“DB CLN”) with Deutsche Balaton. The longstop has been extended to 31 March 2018. Details of the DB CLN are contained in the announcements by the Company of 2 November 2015, 6 October 2016, 24 February 2017, 5 May 2017 and 3 July 2017 and 11 September 2017 (“CLN Announcements”). The maturity date of the warrants attached to the DB CLN are eighteen months after the earlier of the date on which the Tongo-Tonguma tribute mining agreement (“Transaction”) completes, or the date on which the Company makes an announcement that the Transaction will not proceed. There are no other changes to the DB CLN.

Furthermore, the Company announces an extension to the longstop date (“Transaction Default”) of its US$1.34 million outstanding Convertible Loan Note with Deutsche Balaton, Creditforce and Steven Poulton (“US$1.34m CLN”) to the 30 April 2018. The most recent details of the US$1.34m CLN are contained in the announcement dated 14 August 2017. There are no other changes to the US$1.34m CLN.

Stellar also announces that it has entered into an interest free unsecured loan agreement with Rowan Carr, the Company’s Chief Operating Officer, for US$109,500 in relation to funds advanced by Rowan Carr for project costs incurred by the Group in Guinea whilst the recent asset disposal process was being completed (“Loan”). At present there is no fixed repayment schedule however the Company has committed to repay the Loan using the proceeds of future fundraises.

Note on Related Party Transaction

By virtue of Deutsche Balaton being a substantial shareholder and Steven Poulton being a Director of the Company the amendments to the DB CLN and the US$1.34m CLN (together the “CLNs”) above constitute related party transactions under the AIM Rules for Companies. By virtue of Rowan Carr being a director of a subsidiary company of Stellar, the Loan also constitutes a related party transaction. The Directors who are independent of the CLNs and the Loan consider, having consulted with the Company’s Nominated Adviser, that the amended terms of the CLNs and the Loan are fair and reasonable insofar as the Company’s shareholders are concerned.

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

About Stellar Diamonds plc

Stellar is an AIM listed (AIM: STEL) diamond development company focused on the 4.5 million carat high-grade and high value Tongo-Tonguma kimberlite diamond project in the world famous diamond fields of eastern Sierra Leone. An independently generated mine plan, based on over 66,000m of drilling that has been completed to date, 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 a Post-tax NPV(8) of US$109 million and IRR of 31%.

For further information contact the following or visit the Company’s website at www.stellar-diamonds.com.

Karl Smithson, CEO Stellar Diamonds plc Tel: +44 (0) 20 7164 6371
Emma Earl

Sandy Jamieson

Cairn Financial Advisers (Nominated Adviser) Tel: +44 (0) 20 7213 0880
Jon Bellis Beaufort Securities Limited (Joint Broker) Tel: +44 (0) 20 7382 8300
Martin Lampshire

Rory Scott

Peterhouse Corporate Finance (Joint Broker)

Mirabaud Securities (Financial Advisers)

Tel: +44 (0) 20 7469 0930

Tel: +44 (0) 20 7878 3360

Tim Blythe

Nick Elwes

Blytheweigh

(Financial PR)

Tel: +44 (0) 20 7138 3204

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

Caution regarding forward looking statements

Certain statements in this announcement, are, or may be deemed to be, forward looking statements. Forward looking statements are identified by their use of terms and phrases such as ”believe”, ”could”, “should” ”envisage”, ”estimate”, ”intend”, ”may”, ”plan”, ”potentially”, ”will” or the negative of those, variations or comparable expressions, including references to assumptions. These forward looking statements are not based on historical facts but rather on the Directors’ current expectations and assumptions regarding the Company’s future growth, results of operations, performance, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, business prospects and opportunities. Such forward looking statements reflect the Directors’ current beliefs and assumptions and are based on information currently available to the Directors.

A number of factors could cause actual results to differ materially from the results discussed in the forward looking statements including risks associated with vulnerability to general economic and business conditions, competition, environmental and other regulatory changes, actions by governmental authorities, the availability of capital markets, reliance on key personnel, uninsured and underinsured losses and other factors, many of which are beyond the control of the Company. Although any forward looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions, the Company cannot assure investors that actual results will be consistent with such forward looking statements. Accordingly, readers are cautioned not to place undue reliance on forward looking statements. Subject to any continuing obligations under applicable law or any relevant AIM Rule requirements, in providing this information the Company does not undertake any obligation to publicly update or revise any of the forward looking statements or to advise of any change in events, conditions or circumstances on which any such statement is based.

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