Stellar Diamonds Limited Proposed Placing To Raise =A36.2 Million by 24hgold

Mots clés associés : Botswana | Sierra Leone |

Re: News Releases - Thursday, March 10, 2011
Title: Proposed Placing To Raise �6.2 Million

NOT FOR DISTRIBUTION IN THE UNITED STATES OR FOR DISSEMINATION TO US NEWS WIRE SERVICES.

Stellar Diamonds plc ("Stellar" or the "Company")

Stellar, the AIM-quoted diamond mining and exploration company focused on West Africa, announces that Northland Capital Partners Limited, Daniel Stewart & Company plc and the Company have conditionally raised �6.2 million before expenses through a placing of 77,500,000 million new Ordinary Shares of 5 pence each in the Company (the "Placing Shares") with institutional and other investors at 8 pence per share (the "Placing").

Highlights

Conditional placing to raise �6.2m before expenses
Exceedingly strong support from new and existing institutional shareholders
Funds to accelerate exploration and development of kimberlite portfolio
The objective of the Placing is to accelerate the development of the Company's kimberlite portfolio and to fund its general working capital requirements, in line with the Company's growth strategy as recently announced. Following the Placing, the enlarged issued share capital will comprise 216,766,659 ordinary shares and the Placing Shares will represent approximately 35.8 per cent. of the enlarged issued share capital.

Karl Smithson, Chief Executive of Stellar, commented:
"We are delighted at the very strong demand for this placing, which has attracted significant new institutional investors to our share register. The level of support from both existing shareholders and new investors provides Stellar with the financial capacity to aggressively accelerate the exploration and development of our kimberlite portfolio, which we believe has the potential to unlock significant value for all shareholders. The diamond market and the outlook for the diamond sector as a whole continues to improve and our strategy remains for Stellar to become a leading diamond producer in Africa."

Use of proceeds
Subject to the Placing Agreement becoming unconditional and not being terminated in accordance with its terms, the Placing will raise approximately �6.2 million before the deduction of expenses payable by the Company.

Droujba Kimberlite Pipe, Guinea
>From the net proceeds, the Company intends to use approximately �2,000,000 for resource definition drilling and bulk sampling at the Company's 100% owned Droujba kimberlite pipe in Guinea. This will also include assessing the wider licence area for additional kimberlite ore bodies. The current drilling programme of 3,000m is almost complete with encouraging results to date. As previously announced the kimberlite ore body has been intersected at a depth of 120m and remains open, while other hidden extensions which do not outcrop at surface have also been intersected. Analysis of the kimberlite drill samples returned highly encouraging micro diamond results. The Company therefore plans a phase two drilling programme with the objective of increasing the known depth extent of the pipe, while also increasing the confidence in the shape and size of the ore body. A bulk sample will also be collected from the surface of the kimberlite, once the standing water has been pumped out, and processed in order to determine the diamond grade and value of the pipe. A processing plant from the Company's Bomboko alluvial project will be relocated and established at Droujba in order to process the samples.

The Company has the objective of establishing an initial resource for the Droujba pipe within the next twelve months. Kimberlite pipes are typically found in clusters, therefore concurrent with the evaluation of Droujba, the Company intends to drill test the additional geophysical anomalies which are proximal to Droujba, which potentially represent undiscovered kimberlites.

Tongo Kimberlite Dykes, Sierra Leone
At the Company's 100% owned Tongo kimberlite dyke project in Sierra Leone, the Company intends to apply approximately �1,500,000 towards evaluating the high-grade Dyke 1. The current 2,000 tonne bulk sample will be completed and will be followed by a larger scale underground bulk sampling programme to include 3,000m surface drilling to delineate the lateral and depth extent of the Dyke 1 kimberlite. A shaft will be sunk to an initial 65m depth and development drives opened at approximately 30m and 60m depth along the kimberlite. Between 35m and 60m trial stopes will be opened from which a bulk sample will be recovered for processing. The Company's existing 5 tonnes per hour dense media separation plant will be utilised for processing all the samples collected from the kimberlite and the diamonds recovered will be exported for valuation and sale. Kimberlite dykes which appear to have similar width and length characteristics to Tongo are mined economically in South Africa to depths of up to 700m.

Other Kimberlite Projects
At the Company's 100% owned Bouro and Kono kimberlite dyke projects in Guinea and Sierra Leone respectively, exploration and evaluation programmes will continue. These will include continued bulk sampling at Bouro, which is located only 1km north of Company's Mandala alluvial project. Bouro is considered to be one of the likely hard rock sources for the 115,000 carats of diamonds produced so far at Mandala. In line with the global rebound in diamond prices after the financial crisis, the opportunity to recommence exploration and trial mining activities at the Kono project will be evaluated continually by the Company. The Company intends to use approximately �500,000 towards these programmes.

In addition, a �300,000 loan note plus accrued interest will be repaid. The remaining funds of �1,643,000 will be available for general working capital purposes, including corporate expenses and the rehabilitation, care and maintenance of the Mandala and Bomboko projects. The funds raised pursuant to the Placing are expected by the Directors to be sufficient for the Company's foreseeable requirements for at least the twelve months following Admission. The estimated costs of the Placing are �257,000.

Further information about the Company can be found at www.stellar-diamonds.com

Shareholder approval
The Placing is conditional on the approval of shareholders at a General Meeting (which it is intended will be convened by the Company for 28 March 2011) and Admission. A circular, containing a notice of the General Meeting, is today being sent to Stellar shareholders outlining the terms of the Placing and seeking the necessary approval of shareholders for the issue of the Placing Shares. The circular will be available on the Company's website; www.stellar-diamonds.com.

The Placing Shares will be issued credited as fully paid and will rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared on or after the date on which they are issued.

Application will be made for Admission and, subject to the requisite shareholder approval for the Placing being obtained at the General Meeting, it is expected that Admission will become effective on or around 29 March 2011.

Directors' participation in the Placing
The following directors of the Company are participating in the Placing at the Placing price:

Name of Director	Amount Subscribed	Number of Placing Shares	Number of shares held including the Placing Shares	Percentage of enlarged issued share capital
	�
The Lord Daresbury	30,254 (a)	378175	3822831	1.76
Karl Smithson	60,000 (b)	750000	1395757	0.64
Angus Ogilvie	37,600 (c)	470000	654030	0.3
James Campbell	4,000 (d)	50000	190430	0.09
Luis da Silva	2,068 (e)	25850	320689	0.15
Steven Poulton	8,046 (f)	100575	534576	0.25

(a) �10,254 represents Directors' fees with �20,000 being subscribed for cash
(b) �50,000 represents a management performance bonus award with �10,000 being subscribed for cash
(c) �32,600 represents a management performance bonus award with �5,000 being subscribed for cash
(d) �4,000 represents Directors' fees
(e) �2,068 represents Directors' fees
(f) �3,046 represents Directors' fees with �5,000 being subscribed for cash

Asterion A.V. Ltd ("Asterion") has subscribed for 718,750 Placing Shares. Steven Poulton is a director of Asterion and a director and controlling shareholder of Altus Strategies Limited which is in turn a controlling shareholder of Asterion.

Irrevocable Undertakings
The Company has received irrevocable undertakings to vote (or procure the vote) in favour of the Resolutions at the General Meeting, from the following shareholders:

Shareholder	Number of Shares	Percentage of Existing Ordinary Shares
Mano Diamonds Limited	30792770	22.11
Richmond Partners Master Limited	12820520	9.21
Petra Diamonds Limited	4500000	3.23
Botswana Diamonds plc	1000000	0.72
John Teeling	400019	0.29
James Finn	384478	0.28

The Directors have irrevocably undertaken to the Company to vote in favour of the Resolutions in respect of their holdings in the Company and those of their immediate families and connected persons which amount, in aggregate, to 5,143,713 Existing Ordinary Shares and represent approximately 3.69 per cent. of the Existing Ordinary Shares. In total, irrevocable undertakings have been received from shareholders in respect of 55,041,500 Existing Ordinary Shares, representing 39.52 per cent of the Existing Ordinary Shares.

Total voting rights
Following admission of the Placing Shares to trading on AIM, the Company's total issued share capital will comprise of 216,766,659 ordinary shares of 5p each. The Company does not hold any ordinary shares in treasury. Therefore the total number of shares with voting rights in the Company will be 216,766,659. This figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company following Admission.

Enquiries:

Stellar Diamonds plc
Karl Smithson, Chief Executive
Tel: +44 (0) 7783 707 971
Angus Ogilvie, Finance Director
Tel: +44 (0) 7885 201 903

RBC Capital Markets
Martin Eales / Daniel Conti
Tel: +44 (0) 20 7653 4000

Northland Capital Partners Limited
Charles Vaughan
Gavin Burnell, Edward Hutton
Tel: +44 (0) 20 7492 4750

Daniel Stewart & Company plc
Martin Lampshire
Oliver Rigby
Tel: +44 (0) 20 7776 6550

Pelham Bell Pottinger
Charles Vivian / James MacFarlane
Tel: +44 (0) 20 7861 3232

Copyright � 2011 STELLAR DIAMONDS PLC (All) All rights reserved. For more information visit our website at http://www.stellar-diamonds.com/ or send email to info@stellar-diamonds.com ..
Message sent on Thu Mar 10, 2011 at 5:07:14 AM Pacific Time

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