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Stellar to Sell Guinea Mining Projects

Jun 7, 2017 1:04 AM   By Rapaport News
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RAPAPORT... 
Stellar Diamonds has agreed to sell its operations in the Republic of Guinea to BDG Capital for $2 million, after calling off a previous deal with Citigate Commodities Trading.

Stellar’s Guinea projects, which are not core to its overall business, consist of the Baoulé, Mandala and Droujba assets, the diamond-development company said. It will use proceeds from the sale to advance its flagship Tongo-Tonguma mine-development project in Sierra Leone, which it estimates will produce 200,000 carats per year.

Stellar has already received $250,000 of the $2 million as an exclusivity fee, giving BDG two months to carry out due diligence and complete documents.

The deal replaces an earlier agreement between Stellar and Citigate in November 2016, under which Citigate would have received 75% of the Baoulé project in three phases so Stellar’s management could concentrate on Sierra Leone. Stellar terminated the agreement because, it said, Citigate had not provided the expected project funding or management fee.

“The proposed disposal of our Guinea assets allows management to focus on the Tongo-Tonguma mine development in Sierra Leone,” said Stellar CEO Karl Smithson. “It also allows for BDG to take the projects forward, which is in the interests of Guinea and local stakeholders. We look forward to unlocking the significant value that we believe is inherent in the Tongo-Tonguma development as we advance the company towards sustained commercial production.”
Tags: Baoulé, BDG Capital Limited, Citigate, Citigate Commodities Trading, diamond development, Droujba, exploration, Guinea, Karl Smithson, Mandala, Rapaport News, Republic of Guinea, Sierra Leone, stellar, Stellar Diamonds, Tongo-Tonguma
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