November 28, 2017

Corporate Update & Issue of Equity

28 November 2017

AIM: STEL

Stellar Diamonds plc

(“Stellar” or the “Company”)

Corporate Update

Issue of Equity

Stellar Diamonds plc, the diamond development company focused on West Africa, announces that it has completed all necessary Guinean governmental tax payments, and has received the required tax clearance certificates in relation to the disposal of its Guinea companies and assets to BDG Capital (“BDG”). BDG is completing its review of these documents after which it is expected that the transaction will complete and the balance of the funds will be transferred to Stellar, as announced on 16 October 2017. The funds are expected to be utilised towards ongoing project costs in Sierra Leone as well as general working capital.

Stellar is in discussion with its Convertible Loan Note (CLN) holders regarding extensions to the outstanding loan notes and is confident these will be secured in the near future. Furthermore, Stellar is in discussion with Octea Mining regarding an extension to the Tribute Mining Agreement longstop date and is expected to secure such an extension in the near future. The Company also continues discussions with certain funding groups in relation to the required capital requirements for the Tongo-Tonguma mine development in Sierra Leone.

The Company has also agreed to issue today 1 million new ordinary shares in Stellar at a price of 3.25p per share as settlement of certain advisory fees (“Fee Shares”) in order to preserve cash. Application will be made for the Fee Shares, which will rank pari passu with the existing Ordinary Shares, to be admitted to trading on AIM. Admission is expected to occur on 4 December 2017.

Further announcements will be made in due course as the Guinea transaction completes and extensions to the CLN’s and transaction longstop date are finalised.

Total voting rights

Following the issue of the Fee Shares today, the Company’s current issued share capital comprises 62,007,748 Ordinary Shares of 1 pence each. This figure may be used by Shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the Financial Conduct Authority’s Disclosure and Transparency Rules.

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 30%.

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”, “expect”, ”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, contract extensions, 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, but not limited to, completion of the Guinean disposal or the Tongo-Tonguma transaction not occurring, conditions relating to the Tribute Mining Agreements not being met or the agreement being terminated before the end of the Project mine life, recoverability of diamonds not being as expected, 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. The Company is also currently reliant on the continued support of the convertible loan note holders – in the event that the support is withdrawn before the Company completes its project funding, the Company’s financial condition would be materially adversely affected. 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

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

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

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