Aim-listed diamond exploration and devel- opment company Stellar Diamonds increased its resource base by 29% to four-million carats in the year ended June 30, CEO Karl Smithson said last week.

At the company’s Tongo project, in Sierra Leone, the Joint Ore Reserves Committee- (Jorc-) compliant diamond resource was increased from 660 000 ct to 1.1-million carats through additional drilling, while the diamond grade was confirmed at 120 carats per hundred tons (cpht) through further sampling and the average diamond value modelled at $248/ct, which provided Stellar with a high in situ kimberlite value of $298/t.

Meanwhile, the Jorc-compliant diamond resource at Stellar’s Droujba project, in Guinea, increased from 2.5-million carats to 3.1-million carats during the period, through the drilling and sampling of a small 700 m section of the 5 000-m-long Katcha dyke, which runs adjacent to the Droujba pipe. The Katcha dyke has a grade of 140 cpht and a modelled diamond value of $57/ct.

Stellar stated that the project’s diamond resource could be considerably expanded through further drilling and sampling of the Katcha dyke. Further bulk sampling of the Droujba pipe also confirmed a grade of 88 cpht and a diamond value of $45/ct.

“[The resource increase] was followed by independent economic scoping studies of the Tongo and Droujba projects, which showed that, under current market conditions, Tongo has the best potential to deliver superior returns,” Smithson said.

Based on work conducted by Johannesburg-based Paradigm Project Management on behalf of Stellar, Tongo had a calculated net present value of $53-million.

“The board has, therefore, decided to advance Tongo towards a full feasibility study during the course of 2014. We hope that, subject to positive results, a full-scale produc-tion decision can then be made at Tongo,” he said.

While the Droujba project has potential in the short term, as a three-year openpit mining operation producing more than 300 000 ct, a higher diamond price is needed to make a larger scale mine feasible.

Therefore, the company has placed Droujba on care and maintenance, with the economics to be periodically reviewed as the diamond price changes.

“The current consensus is that the rough diamond price will increase significantly in the next few years and the board believes that Droujba has the potential to deliver a good return for shareholders,” Stellar nonexecutive chairperson Peter Daresbury commented.

Further, Stellar also raised $2.3-million during the year to complete conceptual scoping studies at Tongo and Droujba, as well as a further $2.4-million in July to progress the feasibility study at Tongo.

As at June 30, the company’s net assets were valued at $17-million, while Stellar’s operating loss before interest, tax and impairments had been reduced to $3-million, from $4-million at the end of the previous financial year.