Stellar is currently advancing the Tongo project in Sierra Leone to the mine development stage after a positive preliminary economic assessment demonstrated an NPV of US$53 million and IRR of 31% (pre-tax) through mining almost 1 million carats over an 18 year life of mine. The starting capital for the first four years is estimated to be US$24.8 million which will enable both surface and underground mining to be established. The Tongo mine is expected to generate robust cash flows on a long-term and sustainable basis. a mining licence application was submitted in November 2015 and is currently being processed. In addition an Environmental Impact Assessment study has been submitted and approved by the authorities.
Stellar has recently signed a Heads of Terms with Octea Mining Limited for a proposed transaction to combine Stellar’s Tongo kimberlite diamond project with Octea’s adjacent kimberlite diamond project, Tonguma, and to bring both assets into production under the same production infrastructure in Sierra Leone. A combined inferred JORC diamond resource of 4.5 million carats at a +1.18mm cut off has been defined with diamond grades ranging up to 290 carats per hundred tonne. At this cut off the average diamond price is calculated to be in the order of US$ 310 per carat. An exploration target or geological potential of up to 8 million carats may exist.
Stellar has completed its initial trial mining evaluation programme of the 5 hectare Baoulé pipe in the Aredor area of SE Guinea. A total of 103,418 dry tonnes has been collected and processed through our owner operated DMS treatment plant with 11,808 carats mined to date. Two diamond sales during 2015 and two during 2016 have realised revenues in excess of US$ 1.23 million.
In house modelling using historical drill data has defined a 22 million tonne ore body to a 300m depth which is expected to host a diamond resource of approximately 3 million carats.