Thursday, March 10, 2011

Stellar raises £6,2m to accelerate diamond exploration efforts

Aim-listed Stellar Diamonds said on Thursday that it had raised £6,2-million for its exploration activities in Guinea and Sierra Leone.

The company placed 77,5-million new ordinary shares with institutional and other investors at 8p a share, which would represent 35,8% of the enlarged share capital of 216,67-million shares.

CEO Karl Smithson said that the proceeds of the placing would be used to accelerate the company’s kimberlite portfolio and to fund its general working capital requirements.

About £2-million would be used for resource definition drilling and bulk sampling at Stellar’s Droujba kimberlite pipe in Guinea, £1,5-million would go towards the evaluation of the high-grade Tongo kimberlite dyke project in Sierra Leone, while some money would also be spent on exploration and evaluation projects at the Bouro and Kono projects.

The balance would be used to pay a £300 000 loan note plus interest, and for general working capital purposes.

“The diamond market and the outlook for the diamond sector as a whole continues to improve and our strategy remains for Stellar to become a leading diamond producer in Africa," concluded Smithson.

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