JOHANNESBURG (miningweekly.com) – Stellar Diamonds has signed a front-end engineering and design (FEED) study contract for its Tongo-Tonguma kimberlite diamond project, in Sierra Leone.

This follows the signing, last week, of a tribute mining agreement between it and Octea Mining in respect of the combined Tongo-Tonguma project.

Stellar has appointed Paradigm Project Management (PPM) to prepare the FEED study, which will refine estimated operating and capital costs and mine construction parameters.

“The FEED is a very important first step in the mine development process. PPM is highly experienced in the delivery of diamond mine projects and, together with SRK Consulting, will refine all elements of the mine plan as determined in the preliminary economic assessment to higher levels of confidence to reduce the project delivery risk,” Stellar CEO Karl Smithson noted.

With over 66 000 m of drilling completed at the project to date, Stellar will now undertake mine plan-related drilling to a depth of 75 m, concurrent with the FEED study.

“Once work starts on the FEED, it is expected to take four months to deliver (including drilling) and will mark the onset of the mine development programme,” said Smithson.

The FEED results will better define the technical requirements of the project to ensure that the correct underground mine design is implemented and that the treatment plant design and layout is properly designed and the unit processes are clearly identified.

Although the combined Tongo-Tonguma project has seen some 66 000 m of drilling, around 5 000 m of additional core drilling will be undertaken at 50 m intervals to better define the near-surface geology of the kimberlites in resource, with particular reference to siting of the decline portals, the declines and the development drives for the first two levels of mining to a depth of 75 m below surface. 

Further, the drilling will provide the necessary geotechnical and hydrogeological information for the initial years of mining.

The FEED will also define the final capital expenditure definitive estimate and the operating cost budgets. In addition, the project execution plan will also be developed.

A refined financial model will also be developed for the mine which currently shows a project post-tax net present value (NPV) of $167-million and an internal rate of return of 33%, of which Stellar’s attributable NPV is $104-million.