September 26, 2012

Large Diamonds and High Grades from Bulk Sampling of Droujba Kimberlite in Guinea

26 September 2012

AIM: STEL

Stellar Diamonds plc

(“Stellar” or the “Company”)

Large Diamonds and High Grades from Bulk Sampling of Droujba Kimberlite in Guinea

Stellar Diamonds plc, the London listed (AIM: STEL) diamond development company focused on West Africa, provides the results of the Phase-2 bulk sampling programme at the Company’s Droujba kimberlite pipe in Guinea.

Highlights:

  • 1,482 dry tonnes of kimberlite processed from 6 separate bulk sample pits
  • 1,477 carats recovered for an average diluted grade of 100cpht (+1mm)
  • Two large diamonds estimated at 67 and 49 carats were broken during processing
  • 4 diamonds greater than 10.8 carats and 43 diamonds greater than 2 carats recovered
  • Droujba’s 2.5 million carat inferred resource model being updated

Chief Executive Karl Smithson commented:

“The second phase of bulk sampling at Droujba has returned excellent results with a diamond grade of just under 100cpht, exceeding the 71cpht recovered from the first phase bulk sampling. The presence of two large boart diamonds of 67 and 49 carats, which were broken during processing, indicates that Droujba has the potential to yield large stones. Coupled with the high grades recently announced from the adjacent Katcha kimberlite dyke, these results from Droujba demonstrate the potential for the project to host a larger diamond resource than the currently JORC inferred resource of 2.5 million carats.

“All of the recent data is being independently reviewed and an updated resource statement is on track to be delivered ahead of schedule during the fourth quarter of 2012. I look forward to providing further updates as we progress.”

Bulk Sampling and Results

As previously reported, the second phase bulk sampling of the Droujba pipe had the objective of increasing the existing 506 carat diamond parcel to 2,000 carats. To achieve this, six samples were excavated from the base of the Droujba pit and processed via the on-site 5 tonne per hour Dense Media Separation plant under the observation of a Government Mines Monitor.

The second phase samples were designated DBS-5 to DBS-10 and for each sample the volume of the trench excavation was accurately measured and the specific gravity and moisture content carefully determined in order that the dry tonnage could be calculated. Furthermore, detailed mapping of all trench side walls enabled the country rock content (dilution) to be calculated.

These six samples weighed a total of 1,482 dry tonnes and yielded 1,477 carats in the +1mm size fraction, for a diluted grade of just under 100 carats per hundred tonnes (“cpht”). This grade is higher than the grade derived from the Phase-1 bulk sampling of 71cpht, potentially due to a combination of more efficient processing and less sample dilution. The average of both the Phase-1 and 2 bulk sampling is 88.68cpht, whereby a total of 2,147 carats have been yielded from processing 2,421 dry tonnes of Droujba kimberlite. The full results are presented in the Table below. The tonnes and grades for the Phase-1 sampling differ slightly from those reported on the 25th June 2012 due to some minor changes to the tonnage calculations.

Sample Number Dry Tonnes processed Carats Recovered +1mm dry grade (cpht) Largest Stone (carats)
DBS-1-4 (Ph-1 average) 938.68 669.55 71.33 13.80
DBS-5 244.60 171.20 69.99 7.60
DBS-6 239.14 232.70 97.31 9.55
DBS-7 257.36 270.30 105.03 49.20 estimated
DBS-8 269.96 264.70 98.05 11.15
DBS-9 288.33 238.65 82.77 3.45
DBS-10 183.02 299.85 163.83 67.0 estimated
DBS5-10 (Ph-2 average) 1,482.41 1,477.40 99.66 67.0 estimated
Average Ph-1 and Ph-2 2,421.06 2,146.95 88.68 67.0 estimated

A total of 122 diamonds greater than 1 carat in size was recovered from the Phase-2 bulk sampling, of which 43 were greater than 2 carats and four in excess of 10.80 carats. The two largest stones are estimated to be 49.20 carats and 67.0 carats in size on the basis of reassembling broken pieces of diamond that were too large to fit through the top screen size on the bulk sampling plant. Although these stones were boart in quality their presence indicates that Droujba has a large stone size frequency. Other large stones recovered were 11.15ct (rejection), 9.55ct (rejection), 6.90ct (gem), 5.5ct (near gem). The parcels of Droujba and Katcha diamonds will be exported to Antwerp for valuation in the near future.

Resource Statement

The current 2.5 million carat inferred resource statement for Droujba is in the process of independent revision to incorporate these results and those recently reported for the adjacent Katcha kimberlite dyke. An updated independent resource statement is scheduled to be delivered during the fourth quarter of 2012.

In accordance with the AIM Rules for Companies, the information in 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 23 years’ experience.

About Stellar Diamonds plc

Stellar is a London (AIM: STEL) listed West African focussed diamond mining and exploration company which is advancing the Droujba kimberlite pipe in Guinea and the Tongo kimberlite dyke project in Sierra Leone, which combined have a JORC Compliant, inferred diamond resource of 3.1 million carats. The Company recently announced a dispute with the Ministry of Mines in Sierra Leone over its two Kono licences.

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

(Nominated Advisor and Broker)

Gavin Burnell, Edward Hutton Tel: +44 (0) 20 7796 8800

Daniel Stewart & Company plc

(Co-Broker)

Martin Lampshire, Antony Legge Tel: +44 (0) 20 7776 6550

Pelham Bell Pottinger

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