November 9, 2016

Joint Ventures Signed in Guinea and Liberia

9 November 2016


Stellar Diamonds plc

(“Stellar” or the “Company”)

Joint Ventures Signed in Guinea and Liberia

Stellar Diamonds plc, the London listed (AIM: STEL) diamond development company focused on West Africa, announces that it has signed joint venture agreements (“JVA’s”) with Citigate Commodities Trading (“Citigate”), a Dubai based commodities group, over the Company’s Baoulé kimberlite project in Guinea (“Baoulé project”) and two earlier stage exploration licences in western Liberia (“Liberia project”), which were awarded to Stellar in February 2016. The Company currently has a 75% interest in the Baoulé Project and a 100% interest in the Liberia Project.

The attractive terms of the JVA’s remain as announced on the 28 July 2016, providing Stellar with essentially a free-carry on the projects, and are summarised as follows:

Highlights of the Baoulé Joint Venture:

  • Staged earn-in by Citigate’s subsidiary company SAFA Afrique Ltd. of up to 75% of Baoulé;
    • Phase-1 expenditure of US$1.5 million for a 25% shareholding
    • Phase-2 expenditure of US$2 million for a further 25% shareholding
    • Phase-3 fund a pre-feasibility study for a further 25% shareholding
  • Stellar to be paid a Phase-1 management fee of US$150,000
  • Stellar to receive 56% of gross revenues from Phase-1 trial mining
  • Citigate awarded off-take rights on goods exported during the Citigate earn-in process

Highlights of the Liberia Joint Venture:

  • Staged earn-in by Citigate’s subsidiary company SAFA Afrique Ltd. of up to 85% of the Liberia project;
    • Phase-1 expenditure of US$250,000 for a 25% shareholding in the licences
    • Phase-2 expenditure of US$2 million for a further 25% shareholding
    • Phase-3 expenditure of US$4 million for a further 35% shareholding
  • Stellar to be paid Phase-1 management fee of US$25,000
  • Stellar to receive pro-rata revenues from any diamond sales during any phase of earn-in
  • Citigate awarded off-take rights on goods exported during the Citigate earn-in process

For each JVA above, Phase 1 is expected to take place over a 12 month period. In the event of the projects moving to Phase 2, work is expected to take place over a 2 year period with Phase 3 expected to occur over a 3 year period. SAFA Afrique Ltd will be awarded a 25% holding in each project upon receipt by Stellar of initial funds due. This will be adjusted proportionately in the event that the full Phase 1 earn-in funding, which is expected to be received over the 12 month work programme for each project, is not received.

Stellar Chief Executive Karl Smithson commented:

“Stellar is focussed on the proposed Tongo-Tonguma transaction in Sierra Leone, as previously announced. As such we are delighted to finalise these joint ventures on terms which are highly attractive to Stellar and our shareholders, who will retain an ongoing interest in the projects, including a proportion of any revenues commensurate with each parties’ shareholding during each particular Phase. Stellar’s experienced local teams will manage the programmes for at least the first Phase of work, for which the Company will receive a management fee. We expect the first phase of work to commence on each project towards the end of November.

“Importantly, these joint ventures will allow the key management of Stellar to focus on the proposed Tongo-Tonguma transaction in Sierra Leone, which we believe offers significant value potential. The combined Tongo-Tonguma project demonstrated robust economics in a Preliminary Economic Assessment, with an estimated pre-tax project NPV(10) of US$172 million, an IRR of 49%, and projected life of mine project revenues of US$1.5 billion. We therefore look forward to focussing our efforts on the advancement of Tongo-Tonguma, whilst retaining exposure to Baoulé and the Liberian projects.”

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 quoted (AIM: STEL) West African focused diamond company with projects at the trial mining and mine development stages in Guinea and Sierra Leone and exploration licences in Liberia.

About Citigate

Citigate Commodities Trading Limited is a subsidiary of Citigate International Limited (“Citigate”), a UAE-based international group led by entrepreneur and founder Tohib Iyiola. Citigate, via SAFA Afrique Limited, a diamond exploration and development company, which functions as the group’s nominee company and which has been appointed to develop and operate its West African diamond projects, has exploration assets in Sierra Leone, currently coordinated by SRK Consulting, and also specialises in the supply of raw commodities, gold and diamonds in particular, to manufacturing and retail groups.

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For further information contact the following or visit the Company’s website at

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