Bomboko Diamond Mine Progress Report

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

18 October 2010

AIM: STEL

Stellar Diamonds plc

("Stellar" or the "Company")

Bomboko Diamond Mine Progress Report

Stellar Diamonds, the London listed (AIM:STEL) diamond mining and exploration company focused on West Africa, is pleased to announce an operational update at its Bomboko trial diamond mine in south east Guinea for the third quarter of 2010.

Bomboko Diamond Mine - Quarterly Highlights:

·; Production of 576 carats

·; Diamond sales of 1,664 carats at an average price of $115 per carat

·; Latest sales price achieved of $132 per carat

·; Total production of 5,116 carats from trial mining at Bomboko to date

·; Optimisation of plant to enhance diamond recoveries on going

Two parcels of diamonds were sold from Bomboko in the third quarter, comprising 1,664 carats for an average sales price of $114.82, generating revenue of $191,057. The sale of the most recent parcel of 815 carats achieved a higher average sales price of $132.07 per carat, reflecting the general improvement in global diamond prices.

As anticipated, trial mining at Bomboko was temporarily suspended in early August due to the seasonal rains. Production for the quarter was therefore reduced from the second quarter (576 carats versus 1,510 carats). Total production from trial mining at Bomboko has now reached 5,116 carats at an average grade of 4 carats per hundred tonne of gravel.

Resource Definition Ongoing

The Bomboko diamond operation currently has an inferred resource at 41,000 carats. The Company considers this may be significantly expanded and has therefore been undertaking a programme of geological mapping designed to identify additional resource areas. Trial mining by way of a series of regular mine cuts across these potential new resource areas will commence in late October. In the meantime the mine plant is being modified and upgraded in order to enhance diamond recoveries. Furthermore, an X-Ray Flow sort diamond recovery module is being installed and this is expected to further increase diamond recovery and security.

Karl Smithson, Chief Executive Officer, commented:

"We are very encouraged by the increase in diamond prices received for parcels sold from the Bomboko trial diamond mine. The interruption of operations by heavy seasonal rains has provided the Company with the opportunity to install improved equipment and undertake modification to the mining process which are anticipated to improve diamond recoveries once production resumes. With the plant upgrade complete, our focus will be to expand the resource at Bomboko in order to deliver sustainable production over a number of years."

About Stellar Diamonds plc

Stellar Diamonds plc is a London (AIM: STEL) listed diamond mining and exploration company that has a portfolio of projects in West Africa. Two projects in Guinea, Mandala and Bomboko, are in mining and trial mining respectively, which provide cash flow to the Company.

Stellar also owns full rights over four high-grade kimberlites that are to be the focus of future development. In Sierra Leone at the Tongo project a bulk sampling programme is currently underway on one key kimberlite to assess the diamond grade and value, whereas at the Kono project underground trial mining has produced 4,200 carats as part of an economic evaluation exercise. In Guinea the Company's Droujba kimberlite pipe and Bouro kimberlite dykes are located in proximity to the Company's Mandala mine and demonstrate high diamond grades. Droujba will be drilled in the near future.

For further information please contact the following or visit the Company's website at www.stellar-diamonds.com.

In accordance with the AIM Rules, the information in this announcement has been reviewed by Karl Smithson, CEO of Stellar, a qualified geologist with 22 years' experience.

Stellar Diamonds plc

Karl Smithson, Chief Executive Tel: +44 (0) 7783 707971

Angus Ogilvie, Finance Director Tel: +44 (0) 7885 201 903

RBC Capital Markets

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

Astaire Securities

Charles Vaughan Tel: +44 (0) 20 7492 4763

Pelham Bell Pottinger

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