13th Nov 2014 11:01
LONDON (Alliance News) - Stellar Diamonds PLC Thursday said its full-year pretax loss narrowed as it continued pushing the development of its two main projects to generate near-term cashflow as it said it plans to sell its first diamonds before the end of the year.
The company does not currently generate any revenue, and reported a pretax loss of USD4.1 million for the year ended June 30, narrowed from the USD5.0 million loss reported in 2013. The narrower loss was due to a reduction in its impairment of intangibles, which totalled USD760,000 compared to USD2.0 million in 2013.
At the end of the period, Stellar reported a cash balance of USD1.4 million.
"Tremendous progress has been made during the period in developing our flagship projects in Guinea and Sierra Leone, in line with our strategy to become a significant diamond producer focused on the prolific diamond region of West Africa," said Non-Executive Chairman Peter Daresbury.
At its Baoule project in Guinea, Stellar has conducted trial mining over the last six months in an effort to bring in near-term cashflow and prove the potential of a commercial mine. Stripping and mining at the project has recovered 196 carats at an average grade of 17 carats per hundred tonnes, exceeding initial expectations of 13 carats per hundred tonnes, said Stellar.
Large diamonds, including gems of 5.5 carats and 5.1 carats, have been recovered with 57% of the stones being classified as gem diamonds and 43% industrial or near-gem, which is highly encouraging at this early stage of trial mining, it said in a statement.
Stellar is aiming to process a minimum of 100,000 tonnes for diamond grade and value estimation over the next few months, yielding 2,000 carats per month once the process has been optimised.
The company expects to conduct a diamond export and sale once every two month, the first of which is expected before the end of the year.
The Tongo project in Sierra Leone has also been subjected to sampling, with 1,182 carats being recovered at a grade of 183 carats per hundred tonnes, 53% higher than the target of 120 carats per hundred tonnes. The samples have been sent off for further testing to be valued, with results expected before the end of the year.
Stellar plans to continue its feasibility study for the project in 2015, and hopes it can secure funding and have a resource in place by the middle of 2015, it said in a statement.
"We believe that our focus on trial mining at Baoulé and delivering a feasibility study at Tongo will continue to generate value for our shareholders. Our near-term objective is to become a significant diamond producer in the West African region at a time when the outlook for rough diamond prices and the general sentiment to the diamond sector is positive," said Daresbury.
"We believe we are mining the right commodity at the right time. The outlook for the rough diamond market remains robust. Due to the on-going recovery of the US economy and growing Chinese and Far East demand, rough-diamond prices have doubled in the past five years, jumping around 10% in 2014 alone," he added.
Stellar shares were down 2.1% on Thursday at 1.17 pence per share.
By Joshua Warner; [email protected]; @JoshAlliance
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
Stellar Diamonds