Stellar Diamonds has released a positive economic scoping study on the Tongo kimberlite project in Sierra Leone, which has a potential NPV of $53m at a 10% discount.
Stellar has raised £618,000 at 1p a share in order to finance a feasibility study for Tongo and finance an ongoing dispute with the authorities over the Kono licences. More cash will be required to develop Tongo and there are discussions with potential investors and partners.
The scoping study outlines a 13 year life for the mine. The study assumes that 682,338 carats of diamonds will be recovered out of an inferred resource of 1.07m carats at the Tongo Dyke-1 fissure. If the mine life is extended to 17 years then the NPV rises from $16m to $53m.
The placing shares will have a warrant attached, which is exercisable at 2p a share.
Stellar reversed into West African Diamonds on 22 February 2010. Stellar raised £5m and had a market value of £19m.
At 1.25p a share, Stellar is valued at £5m.
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