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UPDATE - Stellar Diamonds happy with sale of first Baoule diamonds

Last updated: 14:51 24 Mar 2015 GMT, First published: 15:51 24 Mar 2015 GMT

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-- adds broker comment--

Stellar Diamonds (LON:STEL) generated revenues of US$417,000 from a diamonds sale in Antwerp that included the first stones from Baoulé in Guinea.

The group sold a total of 4,414 carats, with a further 1,617 carats held back to be re-sold at a later date. Baoule diamonds accounted for 39% of the total put up for sale.

Overall, Stellar said it was pleased with the result in a challenging market for rough diamonds, adding that one five carat high quality diamond was sold for more than US$25,000.  

The next sale is planned for May.

Trial mining only recently started at the Baoulé kimberlite, while Stellar is working through a definitive feasibility study at the Tongo Dyke-1 resource in Sierra Leone. 

Broker Sanlam said the results were difficult to interpret as it was not clear whether the diamonds sold were exclusively from Baoule or from Tongo or another of Stellar’s properties. 

The quality of the 1,617 carats not sold was also unclear. If they are mostly high quality stones, the average carat value could rise very significantly especially as the Baoule conceptual model is based on a $200/ct value.

Karl Smithson, Stellar’s chief executive, said he hopes for more large diamonds to produced from Baoule.

It is in an area renowned for 100ct-200ct sized alluvial discoveries, but also where no one has yet tested the kimberlite pipes.

As bulk sampling develops and the company gains a better understanding of the pipes he is hopeful of finding more large stones.

The next diamond sale will be of 4,000 carats, he added.

 

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