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West Africa focused Stellar Diamonds (LON:STEL) reported “encouraging” bulk sampling diamond grade results from the Lion-5 kimberlite dyke at its 87 sq km Kono diamond licence in eastern Sierra Leone.
The results indicate that the Lion-5 kimberlite has significant exploration potential, the group said.
Lion-5 kimberlite has been mapped over a distance of 1,990 metres to date, however based on satellite imagery and the presence of previous artisanal workings the kimberlite is expected to extend beyond this distance. The kimberlite was excavated by Stellar over a 60 metres length.
Of the 400.59 tonnes extracted from the sample trench, 346.35 tonnes was calculated to be kimberlite. Stellar extracted some 243.8 carats from the sample for a +1mm in-situ dry grade of 70.39 carats per hundred tons (cpht).
Approximately 62 per cent of the diamonds recovered are classified as gem quality, with the five largest stones recovered weighing 4.45ct, 3.22ct, 3.07ct, 3.00ct and 2.57ct.
Re-processing of the plant tailings at a smaller crusher setting remains to be completed so it is likely that more carats will be recovered from the sample and hence the calculated diamond grade will increase, Stellar said.
Chief executive Karl Smithson said: “The dyke forms part of an extensive swarm of kimberlite dykes that run from the Stellar licence areas into the adjacent mine lease held by Koidu Holdings, which is embarking on a US$150million mine expansion programme.
“The kimberlite grade of 70cpht is consistent with our previous trial mining results from the Pol-K and Bardu kimberlites at Kono, where we previously recovered 4,200 carats of good quality diamond from our established 50 tonne per hour DMS plant. It is clear that the Kono permits hold significant value for Stellar and we intend to continue the exploration and evaluation work to develop this potential," he added.
Analyst Dr Ryan Long, at broker Northland, said: "This is further good news for Stellar which has recently produced good results from bulk sampling at the Tongo project where a maiden resource estimate is expected Q112.
"Results from the Lion-5 Dyke highlight the potential of the Kono project and, in our opinion, could lead to the recommencement of trial mining."
The analyst added: "Overall we continue to believe Stellar Diamonds’ shares are undervalued and maintain our price target of 15.1 pence per share, with the Kono project contributing 2.7 pence per share."
Northland maintains its 'buy' rating on the stock.
As at 1.45pm, shares in the company were up 2.04 per cent, to trade at 6.25 pence.