Significant Maiden Diamond Resource at Droujba

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

2nd April 2012

AIM: STEL

Stellar Diamonds plc

("Stellar" or the "Company")

Significant Maiden Diamond Resource at Droujba Kimberlite Pipe in Guinea

Stellar Diamonds plc, the London listed (AIM: STEL) diamond development company focused on West Africa, is pleased to announce the maiden resource for the Droujba kimberlite pipe project in southeastern Guinea.

Highlights:

·; Maiden 2,474,000 carats JORC compliant inferred resource for Droujba pipe to 360m depth

·; Deepest drill intersect to date at Droujba of 414m and pipe remains open at depth

·; Resource grade of 70 carats per hundred tonnes (+1mm)

·; Diamond value modelled at between $50 - $70 per carat (+1mm)

·; Current in-situ contained diamond value estimated by Stellar to be between $124m and $192m

·; Considerable potential to grow resource further with drilling of Droujba and Katcha Dyke

·; Stellar's global inferred diamond resource increased to 3.1 million carats

Chief Executive Karl Smithson commented:

"We are extremely pleased to be able to announce an independent JORC compliant maiden resource at the Droujba kimberlite project, highlighting Droujba's significant value potential for Stellar. Together with the maiden resource announced on the high grade Tongo kimberlite dyke project, this takes Stellar's initial global resource base to 3.1 million carats.

 "This resource base gives Stellar an excellent platform on which to build and we are currently planning aggressive programmes to increase our resources at Droujba, Tongo and at our Kono kimberlite dyke project where evaluation results for the high-grade Lion-5 kimberlite are expected to be announced in the near future.

"I am pleased to report that in the past twelve months Stellar has achieved all of its key milestones on time and within budget and going forward we have a clear strategy of value enhancement of our assets as we move projects through to the mining feasibility study stage."

Resource Statement

CAE Mining has prepared the independent maiden JORC compliant resource statement. The following data and information were utilised in calculating the resource:

- 31 core holes (7,474m) drilled into Droujba pipe.

- Microdiamond results from 968kg of hypabyssal kimberlite collected from surface bulk samples and drill core.

- Microdiamond results from 539kg of kimberlite breccia collected surface bulk samples and drill core.

- Four surface bulk samples of hypabyssal kimberlite weighing a total of 920 tonnes and which returned diluted grades 92cpht, 84cpht, 68cpht and 53cpht (average 73cpht).

- Valuation of 506 carats of diamonds (+1.0mm) recovered from the surface bulk samples.

- Bulk densities collected from numerous kimberlite and country rock samples.

- Dilution estimates from drill core calculated by estimating the percentage country rock contained within the kimberlite.

- Geological block model of the Droujba pipe to declare an inferred resource.

Using the CAE Studio 3 software all drilling information was collated, the volume of kimberlite calculated and a block model defined. Using a specific gravity of 2.63g/cm3 for the hypabyssal kimberlite and 2.39g/cm3 for the kimberlite breccia a total inferred resource of approximately four million tonnes was calculated to a depth of 360m containing approximately 2.5 million carats. The section of the pipe between 160m and 190m contains an estimated 575,000 tonnes and 400,000 carats which have not yet been declared as resource due to paucity of drilling.

Using the microdiamond data and bulk sample results, the diamond grade was modelled by plotting cumulative size distribution log probability curves. At a cut off of +1.0mm the in-situ modelled diamond grade for the hypabyssal kimberlite is calculated to be 87cpht. Taking the average dilution factor of 20% for the hypabyssal kimberlite and 60% for the kimberlite breccia, the +1mm diluted grades are calculated to be 70cpht and 35cpht respectively.

A summary of the declared inferred resource is given in Table 1 below:

The diamond value was modelled using the valuation of an export of 509 carats that was recovered from the surface bulk sampling programme. After acid cleaning the diamond parcel size was reduced to 506 carats and was valued at between $40 per carat and $48 per carat. The low average diamond value is a consequence of a lack of large gem quality stones (in the +2ct and above size range), which is considered to be a result of the geology, the relatively small sample size or both. In their diamond value model CAE Mining took into consideration the small sample size and modelled the values to simulate the likely diamond value in a full production parcel, extrapolating the proportion of gems in the small class sizes into the larger class sizes. At a cut off of +1.0mm the diamond value was then modelled at between $50 and $70 per carat (mid-range of $60 per carat).

Conceptual economic scoping studies, utilising CAE NPV Scheduler Software, suggest that approximately half of the resource (1.3million carats) could be targeted for open pit mining to 160m depth. Since this scenario is most sensitive to diamond values, CAE Mining took the base case resource grade of 70cpht and $50/ct and applied an industry standard factor of 1.6 to the diamond value due to the small and unrepresentative diamond parcel, giving a diamond value of $80/ct and a contained value per tonne of $56/t. CAE modelling found that the deeper parts of the hypabyssal pipe below 190m have reasonable prospects for economic extraction on the basis of a contained value per tonne of $56/t, which is higher than comparable mining costs for a block cave operation of between $15/t to $35/t.

Further Resource Potential

This maiden JORC inferred resource is defined to a depth of 360m below surface and there is additional resource potential from Droujba and other kimberlites in the licence area, as follows:

- The Droujba pipe has been drilled to 414m depth and remains open below that level.

- The volume of pipe between 160m and 190m has not yet been declared a resource and contains an estimated (non-JORC) 400,000 carats but which requires further delineation drilling

- Resource drilling and bulk sampling of the adjacent 5km long Katcha Dyke which has a reported grade of 2ct/m3 (approximately 100cpht) is not included in the mineral resource estimate.

The Droujba resource statement report will be lodged on the company's website at www.stellar-diamonds.com.

The CAE Mining competent person who prepared the resource statement is Dr. Matthew Field (B.Sc. Hons, M.Sc., PhD., Pr. Sci. Nat, MGSSA, FGS), a senior consulting geologist with 28 years of experience in the diamond sector.

In accordance with AIM rules the information in this announcement has been reviewed by Karl Smithson, Chief Executive of Stellar, a qualified geologist with 23 years' experience. Furthermore, CAE Mining has reviewed the technical information contained in this news release.

About Stellar Diamonds plc

Stellar is a London (AIM: STEL) listed West African focussed diamond mining and exploration company which is advancing the Droujba kimberlite pipe in Guinea and the Tongo and Kono kimberlite dyke projects in Sierra Leone.

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

Stellar Diamonds plc

Karl Smithson, Chief Executive Tel: +44 (0) 20 7257 2930

Northland Capital Partners Limited

(Nominated Advisor and Broker)

Gavin Burnell, Edward Hutton Tel: +44 (0) 20 7796 8800

Daniel Stewart & Company plc

(Joint Broker)

Martin Lampshire, Antony Legge Tel: +44 (0) 20 7776 6550

Pelham Bell Pottinger 

James MacFarlane, Joanna Boon Tel: +44 (0) 20 7861 3232