15th Mar 2016 08:56
LONDON (Alliance News) - Stellar Diamonds PLC Tuesday said it has conducted a placing and subscription and also raised funds from the latest sale of the diamonds produced from its Baoule mine in Guinea, but said the average price was much lower than the previous auction.
Steller said it has conditionally raised a total of USD600,000 from a placing of 4.4 million new shares priced at 10.0 pence per share and a subscription of a further 1.6 million new shares at the same price.
Stellar shares were untraded on Tuesday, last trading at 11.38 pence per share.
The proceeds will be used for general working capital, to support the mining licence application for the Tongo mine in Sierra Leone, to complete the trial mining and diamond sales exercise at Baoule, and to secure a maiden resource statement for Baoule.
Stellar said it hopes to secure a maiden resource of at least 3.0 million carats.
The 1.6 million shares have been subscribed by Stellar's largest shareholder, Deutsche Balaton AG, which now holds a 26.77% stake in the company following the transaction.
The USD299,988 raised from Baoule was derived from 3,291 carats being sold at an average price of USD91.05 per carat, which is lower than previous sale from the mine in May 2015, when it achieved an average price of USD156 per carat.
Stellar said the lower average price was due to a different mix of product, with a higher proportion of lower quality stones as well as a broadly weaker rough diamond market since the middle of 2015.
The miner emphasised that some gemstones sold in the most recent auction managed to sell for over USD1,000 per carat, with the highest selling price coming in at USD4,600 per carat.
Following detailed analysis, Stellar said it was determined that the 55 carat stone that had recently been found at the Baoule project and had a boart exterior, would not add significant value through polishing so it was sold as a rough stone.
In addition, Stellar said non-executive directors Liviu Meran and Markus Elsasser have stepped down from the board as part of the company's cost rationalisation programme.
By Joshua Warner; [email protected]; @JoshAlliance
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