December 4, 2012

Tongo Resource Expanded to Over One Million Carats in Sierra Leone

NOT FOR DISTRIBUTION IN THE UNITED STATES OR FOR DISSEMINATION TO US NEWS WIRE SERVICES.

4 December 2012

AIM: STEL

Stellar Diamonds plc

(“Stellar” or the “Company”)

Tongo Resource Expanded to Over One Million Carats in Sierra Leone

Stellar Diamonds plc, the London listed (AIM: STEL) diamond development company focused on West Africa, is pleased to announce the upgraded resource for the Tongo kimberlite dyke project in eastern Sierra Leone.

Highlights:

· 1,074,000 carats JORC compliant inferred resource for Dyke-1 (63% increase)

· Resource grade of 120 carats per hundred tonnes (+1.0mm cut-off)

· Modelled diamond value at between $225 per carat to $270 per carat (+1.0mm cut-off)

· In-situ kimberlite value calculated to be between $270 to $324 per tonne

· 2.5 km Dyke-1 remains open at depth and is one of four known dykes on the Tongo project

Chief Executive Karl Smithson commented:

“We are very pleased to report that the Dyke-1 resource has expanded beyond the one million carats milestone. This has been achieved from successful drilling along its 2.5km strike to depths below 300m and modelling that has confirmed the continuity of the high diamond grade of 120cpht with depth.

““We note the recent weakening in rough diamond prices, however the average diamond value remains as previously modelled in March 2012 at approximately $248 per carat, giving a modelled in-situ kimberlite value of almost $300/t and a modelled in-situ resource value of approximately $266 million. Tongo Dyke-1 therefore has the potential to be a high value, high quality growth asset for the Company.

“Additional resource potential exists from other nearby kimberlite dykes, including the 1km long Dyke-4 which has previously been bulk sampled and returned a diamond grade estimate of 110cpht and an estimated average diamond value of $100 per carat.

“Consistent with our focused strategy of accelerating our key kimberlite projects through the development pipeline and into production, the next phase of work on Dyke-1 will be moving towards conceptual economic scoping and thereafter pre-feasibility studies. I look forward to updating shareholders as we progress.”

Updated Resource Statement

CAE Mining has updated the independent maiden JORC compliant resource statement. The following data and information from both phases of resource evaluation work were utilised in calculating the resource:

– 43 core holes drilled along the 2.5km long Dyke-1

– Holes drilled to intersect the kimberlite at a depths of 50m, 100m, 150m, 200m or 300m from surface

– Microdiamond results from 400kg of kimberlite collected from near surface of Dyke-1

– Microdiamond results from 148.22kg kimberlite collected from drill core at various depths and along strike intersections of Dyke-1

– A 948.75 tonne kimberlite surface bulk sample collected from a 60m long trench of Dyke-1 (+1mm grade of 121cpht)

– Valuation estimates of 1,143 carats of diamonds (+1.0mm) recovered from the Dyke-1 bulk sample

– Bulk densities collected from numerous kimberlite and country rock samples

Using the Datamine Studio 3 software all drilling information was collated, the volume of kimberlite calculated and a block model defined. Using a specific gravity of 2.79g/cm3, the total inferred resource of 895,000 tonnes was calculated for Dyke-1 down to a depth of between 300m and 400m from surface. The deepest drill intersection of the kimberlite resource was 347m below surface.

The diamond grade model was based on microdiamond data and bulk sample results. At a cut off of +1.0mm the modelled diamond grade was estimated at 120cpht (The bulk sampled grade was 121cpht).

The diamond value was modelled in March 2012 using the three exports that comprised the 1,143 carats produced from the bulk sampling. These diamond parcels were valued during 2011 and 2012 and the values were combined and modelled to simulate the likely diamond value in a full production parcel. At a cut off of +1.0mm the diamond value was modelled at between $225 and $270 per carat (mid-range of $248 per carat).

A summary of the declared inferred resource is given in Table 1 below:

Tongo Dyke-1 Maiden Resource (Mar-12) Upgraded Resource (Nov-12)
Tonnes 550,000 895,000
Grade (cpht) 120 120
Carats in resource 660,000 1,074,000
Diamond Value Lower (US$/ct) 225 225
Diamond Value Mid (US$/ct) 247.5 247.5
Diamond Value Upper (US$/ct) 270 270
$ per tonne in-situ at average $247.5/ct Value 297 297

Future Resource Potential

There is additional resource potential from Dyke-1 and other kimberlites in the licence area, as follows:

– Deeper drilling of Dyke-1, to depths of up to 700m in line with kimberlite dykes mined in South Africa.

– Resource drilling of Dyke-4, which has a bulk sampled grade of 108.5cpht and an average diamond value of $100 per carat (based on three independent valuations in March 2012). However, the diamond parcel amounts to 91 carats which is not a representative parcel size.

– Drilling of Dyke-2 located 200m to the north of Dyke-1. Material obtained from the 800m long Dyke-2 was sampled for recovery of microdiamonds. Treatment of a 200kg sample took place in 2008 and yielded 345 stones which suggest a modelled diamond potential of 140cpht at +1mm recovery.

Stellar is currently planning the next phase of development work at the Tongo project, which is likely to include conceptual economic scoping studies followed by a pre-feasibility study during 2013.

The CAE Mining competent person who prepared the resource statement is Johannes Ferreira MSc., Pr. Sci. Nat. In accordance with AIM Rules, Johannes Ferreira and CAE Mining have reviewed and signed off on the information contained in this news release.

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 24 years’ experience.

The Tongo resource statement report will be lodged on the company’s website at www.stellar-diamonds.com

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 3.5 million carats. In April 2012 the Company announced a dispute with the Ministry of Mines in Sierra Leone over its two Kono licences and remains in discussions with the Government of Sierra Leone regarding the proper reinstatement of these licences.

For further information 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