Name and Location
Tongo Dyke-1 diamond project, Sierra Leone.

Client
Stellar Diamonds.

Project Description
An independent study and associated financial modelling conducted by PPM on Stellar’s 1.45-million-carat Tongo Dyke-1 project have concluded that surface mining to supplement Stellar’s underground mining proposal is technically feasible and economically viable.

Manual slot, or open-bench stoping has been identified as the preferred surface mining option, based on its superior safety parameters, as well as the ability to mine from surface to a depth of 40 m and deliver ore simultaneously from several mine faces and depths along strike.

Three to four mining pits, each 500 m long and situated along the 2 km strike of the orebody, are modelled to deliver 100 000 t of ore and 120 000 ct at a grade of 120 carats per hundred tonnes (cpht) in the first three years. Two stopes with multiple mining faces of 2.5 m vertical height are envisaged for each mining pit.

The ore will be drilled and blasted from the mine faces, hoisted to surface using rail-mounted one-tonne kibbles and then transported to the processing plant. Each pit will be adequately dewatered and ventilated as mining progresses to depth.

The underground mine plan remains unchanged from the economic scoping study announced on July 24, 2013. The plan allows for a single shaft to be sunk to 300 m and for mining levels to be established every 40 m. The plan assumes that first underground diamond production will be realised late in the second year of mine development and will yield 35 000 ct in its first two years of mining production.

Net Present Value/Internal Rate of Return
The project’s has a net present value, at a 10% discount, of $75-million at a pretax internal rate of return of 55% using a grade of 120 cpht and value of $270/ct.

There is significant potential to increase the NPV, at a 10% discount, to $146-million, if modelled on using the new increased resource average grade of 165 cpht and value of $270/ct.

Value
The project has a low capital expenditure of $16-million to develop the mine to production.

Duration
Not stated.

Latest Developments
As a result of the independent study, Stellar will now consider whether any additional work is required to confirm the viability of the preferred surface mining method proposed.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Stellar Diamonds, tel +44 20 7010 7686 or fax +44 20 7010 7699.