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Stellar Diamonds plc is a London listed (AIM:STEL) diamond exploration and development company that is focused on the West African countries of Sierra Leone and Guinea. Stellar has an advanced portfolio of high grade kimberlites that are currently subject to resource definition thorugh drilling, bulk sampling and trial mining. Initial resource statements are expected in early 2011 from Tongo and Droujba. In addition, Stellar has also mined and sold over 125,000 carats of diamonds from two alluvial operations in Guinea.
Stellar Diamonds shares rise after ‘excellent’ bulk sampling results at Tongo kimberlite
Stellar Diamonds (LON:STEL) shares gained over 6 per cent today following bulk sampling results from Dyke 1 of the Tongo kimberlite project, in Sierra Leone, that were described as “excellent”.
The group also confirmed it is on track for a maiden resource statement by the end of this quarter.
The bulk sample grade was 121 carats per hundred tonnes with an average diamond value of US$185 per carat, while microdiamond analysis indicates “encouraging size distribution”.
Initial resource drilling of a 1.9 kilometre section of the 2.5 kilometre long Dyke 1 kimberlite was completed in December.
The remainder will be drilled during the next phase of resource definition.
Some 32 holes for 4,048 metres were drilled and kimberlite was intersected in 27 of the holes.
The deepest intersection of kimberlite was recorded at 202 metre vertical depth from surface and the kimberlite remains open at depth and along strike, the company said.
Chief executive Smithson added: "The drilling and bulk sampling of the high-grade 2.5km long Dyke 1 kimberlite has now been completed and has generated excellent results.
“With a diamond grade of 121 carats per hundred tons and diamond value of $185 per carat, the calculated in-situ value of the kimberlite is $224 per tonne.”
Independent consultants CAE Mining will compile the maiden Tongo resource statement for Dyke 1.
Analysts at Fairfax Securities say the trend for the bulk sampling at Dyke 1 is positive, showing improving grades and higher potential in-situ values for the resource.
“This is encouraging for the resource statement expected in the first quarter of 2012,” it said.
Meanwhile Northland Capital analyst Dr Ryan Long today upgraded his target price from 14.3p to 15.1p. This upgrade reflects the potential increase in the Stellar share price that is likely to occur as a result of Tongo’s initial resource estimate, he said.
Long says 2012 will be an important year for Stellar. He highlights that in addition the resource statement at Tongo, the Droujba prokect in Guinea will provide many milestones in the coming months.
According to Long these milestones will culminate in a maiden resource for the exploration project.
The Northland analyst team recently returned from a site visit to Droujba.
“Our visit to the Droujba diamond project, Guinea, provided the opportunity to witness the Dense Media Separation (DMS) Bulk Sampling plant producing its first diamonds.
“This is the first of many milestones expected, at the Droujba project this year.
“The company is finalising the commissioning of the DMS plant by processing material removed from the pit, after the de-watering and de-sliming phase, for testing purposes.
“Once this optimisation is completed, the four bulk samples (totalling 1,000t) collected from the base of the pit will be processed, with a maiden inferred resource estimate expected towards the end of the first quarter.”
