Stellar Diamonds (LON:STEL) shares rose more than 9 per cent today after it unveiled better than expected bulk sampling results from the Katcha Dyke at the company's Droujba project in Guinea.
Earlier the group said the first 92 tonnes of the 299 collected to date yielded 173 carats, or the equivalent of 188 carats per hundred tonnes. This is well ahead of the anticipated 100cpht. The largest gem diamond was 5.55 carats, Stellar revealed.
“Although at an early exploration stage, we believe that Katcha has the potential to add significant resource carats to the overall Droujba kimberlite project,” said Daniel Stewart.
“The grades from the Katcha Dyke show improving grades and exceed the grades found at Droujba to date – we look forward to seeing the valuation on the latest bulk samples,” added John Meyer of City firm Fairfax.
Chief executive Karl Smithson said based on these initial results and the previous drilling, Stellar expects to bring a section of the five kilometre long dyke into the inferred resource category.
This will complement the 2.5 million carats already confirmed as an inferred resource at the nearby Droujba pipe.
At 3.15pm the shares were up 0.29 pence and changing hands for 3.41 pence. Daniel Stewart reckons the stock is worth 27 pence, while broker Northland has a price target of 10.2 pence.
“The dyke could clearly have a material impact on the overall Droujba economics,” said Northland’s Dr Ryan Long.
“The presence of gem quality stones, including the 5.5 carat diamond, from a relatively small sample, bodes well.
“However, at this stage we would assume a value equivalent to the $60 per carat estimate for the main Droujba pipe.”