Stellar Diamonds (LON:STEL) has reported a 63% increase in the resource at Dyke-1 at its Tongo kimberlite dyke project in eastern Sierra Leone.
The company said the inferred resource at Dyke-1 is now 1.074mln carats at a grade of 120 carats per hundred tonnes using a 1.0mm cut-off.
Karl Smithson, chief executive, said this new resource followed from drilling along its 2.5km strike to depths below 300m. Modelling had confirmed the continuity of the high diamond grade of 120 carats per hundred tons (cpht) with depth.
He added that even with rough diamond prices under pressure recently, Tongo Dyke-1 is potentially a valuable asset.
"We note the recent weakening in rough diamond prices; however, the average diamond value remains as previously modelled in March 2012 at approximately US$248 per carat, giving a modelled in-situ kimberlite value of almost US$300/t and a modelled in-situ resource value of approximately US$266 million.
"Tongo Dyke-1 therefore has the potential to be a high value, high quality growth asset for the company.”
Dyke-1 is one of four potential dykes at Tongo and Smithson said there remains potential to expand into these other kimberlite dykes.
The 1km long Dyke-4 which has previously been bulk sampled and returned a diamond grade estimate of 110cpht and an estimated average diamond value of US$100 per carat.
"Consistent with our focused strategy of accelerating our key kimberlite projects through the development pipeline and into production, the next phase of work on Dyke-1 will be moving towards conceptual economic scoping and thereafter pre-feasibility studies," Smithson added.