RAPAPORT... Stellar Diamonds conditionally raised approximately $3.1 million (GBP 1.85 million) by issuing 148,179,476 new ordinary shares of 1 pence each at 1.25 pence per share to new and existing private and institutional investors.
The proceeds will be used predominantly to advance the Baoule kimberlite project in Guinea toward trial mining, as well as continuing bulk sampling at Tongo dyke-1 in Sierra Leone, settlement of outstanding fees and for general working capital.
Stellar Diamonds intends to allocate funds to accelerate Baoule to a trial mining phase and is in the process of relocating its equipment from Droujba and Mandala to Baoule. The company expects its MB 100 dense media separation (DMS) plant to be operational in August, with trial mine processing commencing in September.
At the Tongo project in Sierra Leone, on-going bulk sampling of the 1.1 million carat dyke-1 resource continues to yield very high diamond grades with exceptional quality diamonds. Stellar recently reported recovering 551 carats and will continue with the sampling program into July in order to achieve at least a 1,000 carat diamond parcel for valuation and modeling.
Given the tough market conditions for small mineral resources companies, the directors of Stellar believe that accelerating work at Baoule is the correct strategy to deliver shareholder value as it has the potential to generate cash flow during the second half of 2014. The work at Tongo will continue through the bulk sampling exercise, although completion of the full definitive feasibility study will now be targeted for the first half of 2015.
Stellar Diamonds entered into a placing agreement with Daniel Stewart & Company plc to procure subscribers. Foradex Invest SRL, Stellar's largest shareholder is subscribing for 47,619,044 of the new ordinary shares and, following admission, will hold 23.18 percent of issued share capital.