Modern Mining: Featured News

Stellar Diamonds, listed on London’s AIM, recently announced the completion of the Tribute Mining and Revenue Share Agreement with Octea Mining Limited in respect of the Tongo-Tonguma diamond project in Sierra Leone. The project has the potential to be the second largest kimberlite diamond mine in West Africa.

   Drilling at Tongo Dyke-1, part of the Tongo-Tonguma project.

Stellar’s Chief Executive, Karl Smithson, describes the agreement as a milestone as it secures the Tongo-Tonguma project for the planned long-term development programme. “We have already commenced the front end engineering design (FEED) programme and have signed a contract for 9 000 metres of mine development drilling that will enhance the geological control for the first two levels of mining,” he says.

In another major step forward for the project, Stellar announced on 1 February that it was in advanced negotiations regarding a possible share offer for the entire issued and to be issued share capital of the company by ASX-listed Newfield Resources, which has a number of diamond exploration licences in Sierra Leone.

“Discussions are ongoing with Newfield Resources regarding the indicative offer which, if successfully concluded, and supported by our respective shareholders, will result in sufficient funding being made available to bring the Tongo-Tonguma project into production according to the refined mine plan that will be generated by the FEED programme,” says Smithson.

The Tongo-Tonguma kimberlite project is located in the world-famous diamond fields of eastern Sierra Leone. It combines Stellar’s Tongo project with Octea’s adjacent Tonguma project. In terms of its agreement with Octea, Stellar remains owner of Tongo and will ‘contract mine’ Tonguma.

An independently generated mine plan, based on over 66 000 m of drilling that has been completed to date, envisages the production – from an underground mining operation – of over 4 million carats, generating gross revenues of more than US$1,2 billion over a 21-year life of mine. Initial production at Tongo-Tonguma is scheduled to occur in the first year of development, building up to over 200 000 carats per annum, with a weighted average modelled diamond value of US$229 per carat.

Assets of the project include the 50 t/h production plant at Octea’s Koidu mine, which will be relocated and upgraded during the implementation of the project, and significant camp and office facilities.

Photos courtesy of Stellar Diamonds.

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