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Stellar Diamonds set to bring in £1.26mln for working capital

Stellar Diamonds is to bring in around £1.26mln net via a convertible loan note agreement and subscription deal, which will be used for ongoing working capital, it said, as it unveiled a big reorganisation of its shares.
Stellar Diamonds set to bring in £1.26mln for working capital
Stellar Diamonds is set to bring in around £1.26mln net via a convertible loan note agreement and subscription deal,

Stellar Diamonds (LON:STEL) is to bring in around £1.26mln net via a convertible loan note agreement and subscription deal, which will be used for ongoing working capital, it said, as it unveiled a big reorganisation of its shares.

The AIM firm wants to complete its Tongo mining licence application in Sierra Leone and resume the trial mining of the  kimberlite pipe at  Baoulé in Guinea which has to date yielded over 6,400 carats.

The miner said it would issue new convertible notes to Deutsche Balaton AG to raise around £1.06mln. It will also issue  Deutsche Balaton warrants to subscribe for new Stellar shares worth around £1.06 million.

Conditionally, Stellar will also raise around £497,452 via a subscription through the issue of 7.6mln new subscription shares following the capital reorganisation.

That reorganisation will see every 50 shares consolidated into a single share of 50p each, which will then be sub-divided into one new share of 1 pence  and one deferred share of 49 pence.

The aim at Baoulé remains to process 100,000 tonnes of kimberlite to justify the next stages of project development. 

Diamond sales from trial mining evaluation have to date realised over US$700,000 with the latest sale in May 2015 achieving an average price of US$156 per carat.

Due to current weak rough diamond market conditions, however, Stellar expects the next diamond sale to be pushed back to the first quarter of 2016.

The rainy season in Guinea started in July this year which led to a hiatus in the trial mining.

It is expected that trial mining will recommence in this month (November), which the firm believes should result in an increase in diamond inventory for the next export and planned sale.

Shares in Stellar eased 20% to 0.30p.

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