Stellar Diamonds (LON:STEL) said this morning it has cash of £800,000 (US$1.3 million) after a last October’s £1.9 million share placing as it revealed how it will progress its Tongo and Droujba projects.
Its 3,000 metre drilling programme on the Droujba kimberlite in Guinea began last November.
The company already knows that the pipe is larger than expected, while of the first 300 kilos of drill-core indicates Droujba is “potentially significantly diamondiferous”.
At Tongo in Sierra Leone the plan for 2011 is to begin underground bulk sampling through shaft sinking and opening up development drives at 30m and 60m depth.
This will enable the company to collect larger bulk samples, and in turn provide more information on diamond grade and value, as well as underground mining conditions.
Chief executive Karl Smithson said: "Stellar is focused on unlocking the potential of its kimberlite portfolio, which includes some of the highest grade and highest value per ton of ore projects globally.
“After a challenging period, with diamond prices coming off their lows, the company is going through an exciting transformation.
“We have recently reported excellent results from the company's kimberlite drilling and bulk sampling programmes and I look forward to building on this progress through 2011 which will position Stellar as a leading diamond company in Africa."
Stellar posted a pre-tax loss of US$3.97 million in the six months to December 31, which lead to a reduced loss per share of 3 cents compared with 6 cents a year earlier.
Diamond sales in the period were US$971,561 for the period from its Mandala and Bomboko operations, both in Guinea.
The company said it intends to raise further funds as the two alluvial diamond operations have not performed as well as expected.
Chairman Lord Daresbury, meanwhile, is upbeat on the outlook for the diamond market. “We have seen strong demand for recent diamond sales and record prices of over US$200 per carat for Bomboko goods have been achieved,” he added.
“The directors concur with the view of most diamond and industry analysts that suggest the diamond market will remain robust for 2011 and that the fundamentals of rough diamond supply and demand remain favourable for the medium to long term with strong growth from emerging markets and a rebound from the important US market.
“Stellar's strategy therefore remains to position the company as a significant diamond producer from one or more of its four core kimberlite assets.”