Drilling Intersects Kimberlite Pipe at Droujba

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15 December 2010

AIM: STEL

Stellar Diamonds plc

("Stellar" or the "Company")

Drilling Intersects Kimberlite Pipe at Droujba in Guinea

Stellar Diamonds plc, the London listed (AIM:STEL) diamond mining and exploration company focused on West Africa, provides an update on the drilling programme at the Company's 100% owned Droujba kimberlite pipe in south east Guinea.

Highlights:

·; Three drill holes completed to date for 607 metres at Droujba kimberlite pipe

·; Pipe intersected at 120m depth and remains open, with all holes intersecting ore body to date

·; First batch of drill core dispatched to Canada for microdiamond analysis

·; Drilling continuing with a further 17 holes planned to complete initial 3,000m programme

·; Adjacent geophysical targets to be drilled to test for further potential kimberlite discoveries

Karl Smithson, Chief Executive Officer, commented:

"We are delighted to report that the first three holes at Droujba have proven the continuity of the kimberlite pipe to a depth of at least 120m. The pipe was previously mined in early 1960's by the Russian Aid Mission to a depth of approximately 20m with grades as high as 200 cpht reported. It was previously postulated that the ore body was not considered to extend significantly deeper than the mined depth due to a shallow angled fault, however our drilling has now disproven this.

"Initial observations of the drill core suggest that the pipe is comprised of two main geological units and we have consigned separate samples of these to Canada for microdiamond analysis. This initial 3,000m drilling programme for Droujba will continue uninterrupted through the New Year period and will be extended to include adjacent geophysical targets which could represent additional kimberlites. We look forward to providing further updates on progress."

Drilling Programme

The primary objective of the programme is to model the ore body to a depth of 150m by drilling angled holes through the kimberlite and to collect representative samples for microdiamond analysis. The first two angled holes, DH1 and DH2, were drilled across the "short axis" of the pipe in opposite directions to one another. The third hole, DH3, was drilled across the "long axis" of the pipe. The deepest intersection of the pipe to date is at a vertical depth of 120m. Geological logging of the drill core has revealed that the kimberlite pipe is comprised of both diatreme and hypabyssal kimberlite units that have intruded into country rock granite. A number of narrower kimberlite dykes have also been intersected close to the margin of the main pipe. Further diamond drilling has also been planned on the geophysical anomalies which are in the immediate vicinity of the Droujba kimberlite pipe.

Microdiamond Analysis

Two samples, totaling approximately 300kg, of the diatreme and hypabyssal facies of the kimberlite pipe have been collected from the drill core and dispatched to the Saskatchewan Research Council laboratory in Canada for microdiamond analysis. In addition, a number of samples have been collected and dispatched to South Africa for petrographic interpretation in order to correctly define the kimberlite units and assist in assessing the relative diamond potential of the ore body. The results of this analytical work are expected in Q1 2011.

About the Droujba Kimberlite project

This Droujba kimberlite pipe is located approximately 50km to the south east of Stellar's Mandala mine. The pipe was discovered in the early 1960's by the Russian Aid Mission, which mapped and drilled the pipe and determined it to be approximately 120m x 80m in size, or 1 hectare. The Russians mined the kimberlite down to a depth of 20m before the kimberlite became too hard to mine and process with the technology utilised at that point in time. It was also thought that the pipe was truncated at this depth by a near horizontal fault. In 1964 the Russian Aid Mission left Guinea and the pipe has remained undeveloped since with water filling the former workings. Diamond grades as high as 200 cpht were reported by the Russians, though there is no information on diamond quality. However, a 270-carat stone is reported to have been discovered in alluvial gravels near to the Droujba pipe.

About Stellar Diamonds plc

Stellar 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 undergoing 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, where previous results yielded grades of 100 carats per hundred tonnes with diamond values of $144 per carat. At the Kono underground trial mine previous bulk sampling has produced 4,200 carats as part of an economic evaluation exercise. In Guinea drilling has commenced on the Droujba kimberlite pipe and at Bouro bulk sampling of a high grade kimberlite dyke adjacent to the Company's Mandala mine is also planned.

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

Northland Capital Partners Limited

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

Pelham Bell Pottinger

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