--ADDS BROKER COMMENTS--
The AIM quoted diamond mine developer revealed that bulk sampling grades from the kimberlite now exceeds 150 carats per hundred tonnes (cpht) after tailings were reprocessed – it increased 29% to 155cpht from 120 cpht.
A total of 843 carats have now been recovered through processing material from the bulk sampling programme. Stellar says the diamonds are high quality, with a modelled value of US$248 per carat, or US$384 per tonne on in-situ ore.
The company says it is anticipated the project’s resource size, currently estimated at 1.1mln carats, will be increased.
"Tongo continues to yield excellent results underpinning the project's significant potential,” said chief executive Karl Smithson.
“This grade compares very favourably with the previously calculated resource grade of 120cpht and should impact positively on project economics as well as the resource size, which is currently independently estimated at 1.1 million carats (JORC compliant).
“The final bulk sample to complete the 1,000 carat parcel is currently being extracted and processed and we expect the final grade and value data to be available in August."
Final bulk sampling results are expected next month.
“Using the current resource tonnage and the 155 cpht in-situ grade would imply an estimated potential diamond resource of 1.39 million carats,” said Austin McKelvie, analyst at Daniel Stewart.
“We expect the uplift to positively impact on Tongo’s economics where a definitive feasibility study is due for completion in 2015.”
The City broker repeated a ‘buy’ recommendation for Stellar, with a punchy 5p per share target which suggests considerable upside to the current price of 1.4p.