The Tongo licence in eastern Sierra Leone is located in the heart of the well known Tongo Diamond fields. Since 2007 Stellar has carried out systematic and extensive exploration programmes which have culminated in the establishment of a JORC compliant diamond resource of just over 1.45 million carats. A recently completed and independently generated Preliminary Economic Assessment (PEA) has defined robust economics for an 18 year life of mine on the Dyke-1 kimberlite, with significant opportunity to enhance both life of mine and project economics through either deeper mining and potentially bringing in any of the three other high grade kimberlites (Dykes 2, 3 and 4) on the property into the mine life.


Within Stellar’s licence area are four dykes designated Dykes 1 to 4. A resource statement (JORC compliant) has been declared for the 2km long Dyke 1 kimberlite at 1,450,000 carats at a grade of 165 cpht. If a lower grade model of 120cpht is assumed the average diamond value is modelled at $270 per carat giving an in-situ value of $324 / tonne.


The PEA was undertaken on Dyke-1 only and defined a 18 year life of mine from both surface (years 1-4) and underground (years 3-18) which yields a total of over 955,000 carats generating gross revenues of US$387 million. A pre-tax NPV(10) of $53.2 million is established.


There is significant scope to increase the life of mine and enhance the long-term project economics. Firstly the resource and mine model is defined to a depth of 350m. Similar kimberlite fissure mines in South Africa have been exploited at depths of over 600m, indicating that there is potential to increase depth of mining for Dyke 1. In addition Dyke 4 has delivered bulk sample grades of 110 cpht with diamond values of $140 / carat, while modelled grades of 140 cpht and 185 cpht have been applied to Dykes 2 and 3 respectively. These kimberlites could deliver additional resource to the Dyke-1 mine but further exploration and evaluation work would be required.