October 31, 2016

Competent Persons Report on Tonguma and Tongo Project in Sierra Leone

31 October 2016


Stellar Diamonds plc

(“Stellar” or the “Company”)

Competent Persons Report on Tonguma and Tongo Project in Sierra Leone

Stellar Diamonds plc, the London listed diamond development company focused on West Africa, is pleased to announce that an Independent Competent Person’s Report (“CPR”) has been completed by MPH Consulting (“MPH”) on the Tongo and Tonguma project (the “Project”) in Sierra Leone confirming the Project’s initial inferred recoverable resource of 4.0 million carats (+1.18mm) and endorsing the mine plan for the Project. In its announcement (the “Transaction Announcement”) of 22 August 2016 the Company provided details in respect of its proposed acquisition of the Tonguma project (the “Proposed Acquisition”) to combine with its adjacent Tongo project. On 5 October 2016 the Company announced the results of the independent preliminary economic assessment (“PEA”) for the Project demonstrating an estimated pre-tax Project NPV(10) and IRR of $172 million and 49% respectively.

The CPR by MPH includes the Project as well as the portfolio of other diamond projects held by Stellar. A copy of the CPR is available for download from the Stellar website here.

Chief Executive Karl Smithson commented:

“The publication of the CPR marks another key milestone in the Proposed Acquisition of the Project and follows the independent mine plan and financial model in the PEA. We continue to make good progress with the necessary legal and other due diligence work required to complete the Proposed Acquisition. I look forward to providing further updates in due course.”

By virtue of the Proposed Acquisition being classified as a reverse takeover under the AIM Rules for companies, trading in the Company’s shares on AIM will remain suspended until either an admission document is published or the Company announces that the Proposed Acquisition will not occur.

The Proposed Acquisition, if completed, would result in Stellar holding a 75% economic interest in the Project following, inter alia, preferential repayment of the initial investment made by Stellar and payment of certain revenue royalty payments as outlined in the Transaction Announcement. Shareholders should note that the Proposed Acquisition remains subject to a number of conditions, including inter alia, publication of an admission document and shareholder approval.

Review by competent person

This announcement has been reviewed by Karl Smithson, Chief Executive of Stellar, a qualified geologist and Fellow of the Institute of Materials, Metals, Mining, with 28 years’ experience.

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.

About Stellar Diamonds plc

Stellar is an AIM listed (AIM: STEL) West African focused diamond company with projects at the trial mining and mine development stages in Guinea and Sierra Leone.

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

Karl Smithson, CEO

Philip Knowles, CFO

Stellar Diamonds plc

Stellar Diamonds plc

Tel: +44 (0) 20 7010 7686

Tel: +44 (0) 20 7010 7686

Jon Bellis Beaufort Securities Limited (Broker) Tel: +44 (0) 20 7382 8300
Rory Scott Mirabaud Securities (Financial Adviser) Tel: +44 (0) 20 7878 3360
Emma Earl

Sandy Jamieson

Cairn Financial Advisers (Nominated Adviser) Tel: +44 (0) 20 7213 0880
Lottie Brocklehurst

Charlotte Page

St Brides Partners Ltd Tel: +44 (0) 20 7236 1177