March 6, 2017

Tongo-Tonguma Updated Presentation

6 March 2017

AIM: STEL

Stellar Diamonds plc

(“Stellar” or the “Company”)

Tongo-Tonguma Updated Presentation

Stellar Diamonds plc, the London listed diamond development company focused on West Africa, announces that it has updated a presentation summarising the Tongo-Tonguma project which covers the world famous Tongo diamond fields of Sierra Leone and which is subject to, inter alia, entering into a proposed Tribute Mining Agreement (“Tribute Agreement”) with Octea Mining (“Octea”). The presentation is now available for download from the Company’s website:

Stellar Diamonds Q1 2017 Tongo Tonguma Presentation

Key highlights

  • Robust estimated attributable post-tax Project NPV(8) and IRR of US$104 million and 31% respectively1
  • Potential estimated attributable NPV is in excess of 40 times the current market capitalisation of Stellar
  • Estimated projected life of mine revenues of US$1,518 million1
  • Significant estimated 4.5 million carats resource with target of additional 8 million carats
  • High recoverable diamond grades and values for first three kimberlites to be mined of:
    • Kundu: 260cpht and $209 per carat ($543 per tonne)
    • Lando: 220cpht and $209 per carat ($440 per tonne)
    • Tongo: 100cpht and $310 per carat ($310 per tonne)
  • Low estimated Capex of US$31.8 million in first two years (including 15% contingency)
  • Stellar to fund the mine development and recover its investment prior to paying to Octea a 10% revenue share on future mine revenues
  • High estimated operating margin of 50% over the life of mine
  • Potentially rapid initial cash flow within 12 months and commercial production within 24 months ramping up to over 200,000 carats p.a
  • Significant mine equipment, including a 50tph production plant to be acquired for nominal value as part of the Tribute Agreement

1 Company estimates based on the preliminary economic assessment. Assumes the proposed Tribute Agreement remains in place for the estimated lift of the mine.

Further details of the exclusive heads of terms entered into with Octea and the proposed Tribute Agreement are set out in the announcement of 20 February 2017 which Shareholders are encouraged to read in full.

Review by 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 listed (AIM: STEL) West African focused diamond company with projects at the trial mining and mine development stages in Sierra Leone and Guinea.

** ENDS **

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

Lottie Brocklehurst

Charlotte Page

St Brides Partners Ltd

(Financial PR)

Tel: +44 (0) 20 7236 1177