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Stellar Diamonds Notes Stronger Prices for Rough

Company closes first fiscal half in solid cash position.
Jun 28, 2010 8:18 AM   By Jeff Miller
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RAPAPORT... Stellar Diamonds' production at the Mandala mine came to 34,409 carats during its first fiscal half that ended on March 31, 2010. The company's total diamond sales, comprised of both gem- and industrial-quality rough diamonds, for the first half totaled $1.19 million, or an average of over $24 per carat. 

The company noted in its interim results statement that the average sales prices for rough diamonds in 2010 were "significantly higher than those achieved in 2009." Stellar Diamonds' most recent sale realized prices ranging from $38 to $42 per carat, excluding one 37-carat, fancy yellow stone.

Trial work continued at the Bomboko mine during the quarter, with production reaching 2,411 carats. Sales of Bomboko diamonds totaled $417,000, or average prices of $120 per carat.

Other highlights during the first half included a completed reverse takeover of West African Diamonds (WAD) in February 2010. Stellar, which trades on London's Alternative Investment Market (AIM), generated $7.5 million (GBP 5 million) in new funds and had a cash position of $2.5 million, net current assets of $3.4 million and loans totaling about $400,000 as of March 31, 2010.

Stellar Diamonds identified its key growth driver as the development of its high-grade kimberlite projects at Kono and Tongo in Sierra Leone and Bouro, as well as Droujba in Guinea. The company noted in the statement that these projects offer significant opportunities to strengthen its production pipeline in the mid term and as such, to fast track its development through to production, a top priority for the company. As part of this strategy, Stellar also acquired Petra Diamonds'  interest in the Kono project, which was completed after the second quarter closed. Kono did, however, remain on care and maintenance during the first fiscal half.

Karl Smithson, the company's chief executive officer (CEO), said, "The past six months have seen Stellar evolve from a privately held, primarily exploration focused company to a quoted diamond production and development company with a focus on the prolific diamond region of West Africa.

"Through the reverse takeover of WAD plc and subsequent financing, we have created an enlarged company that is financially robust and is in the process of increasing its current production profile and revenues in the short term, which will enable the company to develop our key high-grade kimberlites in the medium term," Smithson concluded.


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Tags: African Diamonds, Guinea, Jeff Miller, Kono Project, Petra Diamonds, Production, Stellar Diamonds
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