Stellar Diamonds provides update on disposal of Guinea assets
Monday, Oct 16, 2017
Stellar Diamonds plc, the diamond development company focused on West Africa, announces that it has signed conditional share purchase agreements with Gold Knight Limited, a wholly owned subsidiary company of BDG Capital Limited ("BDG") in relation to the proposed sale (the "Transaction") of Stellar's assets in the Republic of Guinea ("Guinea"), as previously announced on 5 June and 14 August 2017.

Following the due diligence process undertaken by BDG, a final purchase price of US$1,250,000 has been agreed for the Transaction, of which Stellar has received US$500,000 to date.  The proceeds already received have been applied to the Company's working capital since June. Completion of the Transaction and receipt of the balance of funds is conditional upon payment by Stellar of certain government taxes in Guinea, amounting to approximately US$123,000 which are due by Stellar's locally incorporated subsidiary in Guinea which is being sold. Completion is expected to occur later this month. A further announcement will be made in due course regarding completion.

Chief Executive Karl Smithson commented:

"We are delighted to be able to bring the disposal of our Guinea assets to a close. Stellar's carrying cost in Guinea is approximately US$70,000 per month and we look forward to focusing our resources exclusively on progressing the high-grade and high value 4.5 million carat Tongo-Tonguma kimberlite mine development project in Sierra Leone.

"We wish BDG every success in taking the Guinea projects forward."

Further terms of the Transaction

Pursuant to the conditional share purchase agreements entered into, Stellar has made customary warranties and indemnities in respect of the Guinea assets.

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

About Stellar Diamonds plc

Stellar is an AIM listed (AIM: STEL) diamond development company focused on the 4.5 million carat high-grade and high value Tongo-Tonguma kimberlite diamond project in the world famous diamond fields of eastern Sierra Leone. An independently generated mine plan, based on over 66,000m of drilling that has been completed to date, envisages the production of over 4 million carats, generating gross revenues of more than US$1.2 billion, over a 21 year life of mine. Initial production at Tongo-Tonguma is scheduled to occur in the first year of development, building up to over 200,000 carats per annum, with a weighted average modelled diamond value of $229 per carat. The Tongo-Tonguma mine is estimated to give Stellar an attributable a Post-tax NPV(8) of US$109 million and IRR of 30%.

For more information, please visit: http://stellar-diamonds.com

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