Stellar Diamonds PLC (LON:STEL) said it has collected a bulk sample of approximately 500 tonnes from a 60 metre section of the Tongo kimberlite Dyke 1 in Sierra Leone.
The objective of the bulk sampling programme is to yield between 1,000 and 2,000 carats for grade and valuation purposes.
The construction of the processing facility is almost complete and Stellar expects the first results in early 2011.
Chief executive Karl Smithson said: “I am pleased to report that good progress is being made at the Tongo kimberlite diamond project after some initial delays on importing the processing plant. The construction of the processing facility is almost complete and we anticipate the first results in early 2011. In the meantime we are stockpiling ore from Dyke 1 with the target of a total sample of approximately 1,500 tonnes that is representative of the kimberlite. “
Previous mini bulk sampling results of Dyke 1 returned encouraging grades of 100 carats per hundred tonnes, with all the diamonds being of gem quality and valued at US$144 per carat in June 2010. The same parcel was valued at up to US$189 carat in late 2008.
"With the recent commencement of drilling at the company's Droujba kimberlite pipe in Guinea and the ongoing bulk sampling at Tongo in Sierra Leone, Stellar is delivering on its strategy of developing its portfolio of kimberlite diamond projects."
Northland Capital featured Stellar in its 'Morning Report', saying the company continues to offer an attractive mix of operational cash flow positive alluvial production with exploration upside. "With Tongo well advanced and Droujba exploration underway, we see potential significant near terms catalysts," the broker added.
Stellar has a portfolio of projects in West Africa. Two projects in Guinea, Mandala and Bomboko, are undergoing mining and trial mining respectively, which provide cash flow to the company.
Stellar also owns full rights over four high-grade kimberlites that are the focus of future development. In Sierra Leone, apart from Tongo, the Kono project is presently on care and maintenance, however previous underground trial mining has produced 4,200 carats as part of an economic evaluation exercise. In Guinea drilling has recently commenced at the Droujba kimberlite pipe and a bulk sampling programme is planned over the Bouro kimberlite dykes, which are located in proximity to the company's Mandala mine.