Northland Capital is looking forward to significant news flow from Stellar Diamonds (LON:STEL) in the new year.
In a note to clients Northland analyst Andrew McGeary said he was expecting news on Stellar’s key expansion projects, with results from the Tongo kimberlites in Q1 and from Droujba in Q2/Q3.
Stellar today released its final results for the year ended 30 June 2010. This was the first set of annual results since Stellar joined AIM, following its reverse takeover of West African Diamonds back in February 2010.
“The results reflect a challenging period integrating and expanding the new business,” Mc Geary said.
“However the company can cite significant progress in restructuring the alluvial operations.”
The analyst highlighted Stellar’s significant upside potential, by maintaining his 18.9 pence per share valuation.
This morning, Stellar’s chief executive Karl Smithson said the company should receive wider recognition for its strong growth profile as the diamond market continues to improve.
“Stellar has successfully evolved from a privately owned exploration and development company to a quoted diamond producer which is delivering cash flow while advancing a portfolio of high grade kimberlites,” Smithson said.
Stellar reversed into West African Diamonds in February. Then, in May, it boosted its project portfolio further when it acquired the Kono kimberlite in Sierra Leone.
The company has two producing diamond mines in Guinea, Mandala and Bomboko, which produced just over 50,000 carats in the period, driving revenues to around US$2.15 million.
It ended the period with US$0.7 million in the bank and net assets of US$23.1 million.
In the post-reporting period it has raised new funds to facilitate bulk sampling at the Tongo kimberlite in Sierra Leone, as well as drilling at the Droujba kimberlite in Guinea.
On 1 December it had US$1.4 million in cash.