1st Apr 2015 08:12
LONDON (Alliance News) - Stellar Diamonds PLC Wednesday said it has started the application process to acquire a mining license for the Tongo Dyke-1 kimberlite project in eastern Sierra Leone.
Stellar said the application is the result of the company's decision to fast-track Tongo to production following recent positive resource definition work, mining studies and financial modelling.
"Moving Tongo to the mining licence application stage is a major milestone for the project. Having recently defined a faster route to production cash flow by the assessment of surface mining studies and based on the extensive resource and financial modelling completed to date, Tongo has clear economic potential," said Chief Executive Karl Smithson.
The application for a mining licence will be accompanied by updated mining and financial reports under a preliminary economic assessment instead of the previously planned definitive feasibility study in order to cut costs and to fast-track Tongo to production, said the company.
At the same time, Stellar will also look to secure debt funding for the majority of the USD20 million needed in capital expenditure to bring Tongo into production.
"The board will target debt structures for the majority of the funding requirement in order to minimise dilution to existing shareholders and thereby seek to optimise their exposure to any future cash flows," said Stellar.
The company is targeting 120,000 carats via surface mining at the Tongo project in the first three years, with an aim of recovering over 1.0 million carats over the project's 16 year mine life.
Stellar shares were up 4.1% to 0.885 pence per share on Wednesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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