October 17, 2011

FINAL RESULTS FOR THE YEAR ENDED 30 JUNE 2011

17 October 2011

AIM: STEL

Stellar Diamonds plc

 

(“Stellar” or the “Company”)

 

FINAL RESULTS FOR THE YEAR ENDED 30 JUNE 2011

 

Stellar Diamonds plc, the London listed (AIM: STEL) diamond mining and exploration company focused on West Africa, announces its audited results for the year ended 30 June 2011.

Operational Highlights:

  • 12,000m drill programme at the Droujba kimberlite pipe project in southeastern Guinea well under way, with 6,425m drilled as at 13 September 2011
    • Droujba drill programme and geological modelling has confirmed a significantly larger kimberlite than initially anticipated with potential for 15 million tonnes to 350m depth
    • Bulk sampling expected to commence in December 2011 with maiden resource estimate expected in Q1 2012
  • Bulk sampling at Tongo continues to provide encouraging results with grades in excess of 100cpht
    • 6,000m drill programme has commenced with two rigs on site
    • Valuation of 946 carats in Antwerp for an average value of US$185/ct suggesting a potential value of US$200/t for kimberlite ore at Tongo
  • Strategic portfolio review to redirect cash and operational resources to focus on high priority kimberlite projects
    • Trial mining at Bomboko ceased and equipment and personnel relocated to Droujba to help accelerate development programme

Financial Highlights:

  • US$9.9m (£6.2m) placement in March 2011 to establish maiden resource estimate for both Tongo and Droujba kimberlite projects as well as undertake further bulk sampling at Kono and Bouro projects
  • Strong cash position at 30 June 2011 of US$6.5m (30 June 2010: US$0.69m)
  • Net assets at 30 June 2011 of US$21.1m (30 June 2010: US$23.1m)
  • Operating loss before interest, tax and impairments of US$6.25m (30 June 2010: US$5.4m)

Karl Smithson, CEO, commented:

“We are extremely pleased with the progress made during the financial period and the subsequent months. The decision to refocus our resources on our core kimberlite projects has proved to be successful, with strong results achieved at both our Droujba and Tongo projects as we have sought to considerably accelerate the pace of work at both these projects. Drilling at both projects has revealed very encouraging results and we are confident in our ability to create further value and momentum from these projects. Although the current market environment is characterised by volatility and risk aversion, Stellar is well capitalised to progress with our work programmes. We are expecting a maiden resource for both projects in the first quarter of 2012, and this will be a major milestone for Stellar as we look to create significant value from our portfolio of diamond projects.”

About Stellar Diamonds plc

Stellar is a London (AIM: STEL) listed diamond mining and exploration company focussed on West Africa where programmes aimed at generating maiden resource estimates at Droujba in Guinea and Tongo in Sierra Leone are ongoing. Bulk sampling of the Lion-5 dyke at Kono (Sierra Leone) is due to commence shortly and at Bouro (Guinea) a previous bulk sample realized a grade of 243cpht. Mining at Mandala is currently on a seasonal break.

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

Stellar Diamonds plc

Karl Smithson,Chief ExecutiveTel: +44 (0) 20 7257 2930

Northland Capital Partners Limited

Gavin Burnell, Edward Hutton

Charles Vaughan (Sales) Tel: +44 (0) 20 7796 8800

Daniel Stewart & Company plc

Martin Lampshire, Oliver Rigby Tel: +44 (0) 20 7776 6550

Pelham Bell Pottinger

James MacFarlane/Joanna Boon Tel: +44 (0) 20 7861 3232

Stellar Diamonds 2011 Annual Report