Stellar Diamonds PLC (LON:STEL) reported encouraging diamond grades from initial bulk sampling at its wholly-owned Bouro kimberlite dyke project in Guinea.
The first sample collected and processed from the Bouro North kimberlite has returned a significantly high diamond grade of 243 carats per hundred tonnes (cpht).
Stellar plans to collect a further two samples in order to obtain more representative information from this 5 kilometre long kimberlite. The diamonds recovered will be exported to Antwerp for valuation and sale in order to establish the preliminary diamond value for the kimberlite.
A total of 232.81 tonnes of kimberlite were collected and processed over the past month, from which 565.16 carats of diamonds were recovered.
Twenty stones of greater than 1 carat were recovered and the largest diamond was 3.67 carats. Preliminary analysis shows that 4 percent of the diamonds are classified as gem quality, similar to the Mandala production, although this is expected to increase after the diamond parcel has been subjected to acidisation and cleaning.
This will take place in Antwerp in April, after which the goods will be valued and sold in order to establish the diamond value for the sample.
Chief executive Karl Smithson said: "Bouro is one of four high grade kimberlites in Stellar's portfolio and is located only 1km from the Mandala alluvial project and processing plant. It is considered that Bouro is one of the likely primary sources for the diamonds mined at Mandala. The company has considerable diamond mining infrastructure at Mandala and therefore the evaluation of the Bouro kimberlite can be undertaken in a rapid and cost effective manner.
"Following on from our successful placing of £6.2million, Stellar has the necessary funds in place to advance its strategy of organic growth through the development of its portfolio of high grade kimberlites."
Northland Capital commented on today's news in its 'Morning Note', saying Bouro has previously been the subject of significant artisanal mining and, anecdotally, was already considered a very high grade deposit.
"These initial results encourage that there may be a more robust case for further development of the kimberlite. The initial grade of 243cpht is very high in world terms and while too early to be conclusive this is, nevertheless, an encouraging start," the broker said.
"If Bouro were to prove economic, this would have significant strategic benefit for the group. The sample was processed via the Mandala plant located 1km from Bouro. If ultimately successful, Bouro would offer a natural replacement for lower margin Mandala alluvial operations," Northland added.
Fellow broker Daniel Stewart also called the sample results "encouraging".
It said in its 'Morning Meeting' note that production from Mandala has recently been selling for an average of US$26.94 per carat, reflecting the fact that most of the production is of industrial quality. "If this value is applied to the Boura bulk sample, it suggests that the kimberlite sampled may have a gross value of around
US$65 per tonne. If so, it would be highly profitable to mine," Daniel Stewart said.
Stellar holds three licences, totalling 207 square kilometres, over the Bouro area. These licences cover four known kimberlite dykes, of which Bouro North is the most extensively sampled, as well as a number of unresolved mineral and geophysical anomalies that could potentially represent undiscovered kimberlites.
Stellar owns a 100 percent interest in four high-grade kimberlite projects that are the focus of exploration and development.
In Sierra Leone at the Tongo project a bulk sampling programme is ongoing on one key kimberlite to assess the diamond grade and value.
At the Kono underground trial mine, bulk sampling by the company has produced 4,200 carats as part of an economic evaluation exercise.
In Guinea drilling is continuing on the diamondiferous Droujba kimberlite pipe and bulk sampling is underway on the high grade Bouro kimberlite dyke, which is adjacent to the company's Mandala alluvial diamond operation.