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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.”
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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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