Update on Tongo Kimberlite Diamond Project

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

15 February 2011

AIM: STEL

Stellar Diamonds plc

("Stellar" or the "Company")

ENCOURAGING DIAMOND GRADES FROM TONGO KIMBERLITE PROJECT IN SIERRA LEONE

Stellar Diamonds plc, the London listed (AIM:STEL) diamond mining and exploration company focused on West Africa, is pleased to report encouraging initial diamond grades from bulk sampling at the Company's 100% owned Tongo kimberlite project in eastern Sierra Leone.

Highlights:

·; Initial sample of 69 tons returned in-situ grade of 130cpht for Tongo Dyke 1

·; 90% of diamonds have been classified as gem quality

·; Eight diamonds greater than 1 carat recovered

·; Previous diamond parcel from Tongo Dyke 1 re-valued at $169 per carat

·; 5 ton per hour Dense Media Separation ('DMS') plant fully commissioned and operating

Karl Smithson, Chief Executive Officer, commented:

"The initial processing results from the Tongo kimberlite bulk sampling programme are highly encouraging, with an in-situ kimberlite grade of 130 carats per hundred tons ("cpht") being recovered from the first 69 tons processed during the commissioning of the DMS plant. Taking into account dilution incorporated during the sampling process, the diluted grade is calculated at 86cpht. The predominance of gem quality stones in the diamond population so far observed can only bode well for the future diamond value of this kimberlite body.

"We are accelerating the processing rate in order that a representative parcel of diamonds can be exported to Antwerp for valuation purposes. The objective is to collect a 1,000 carat to 2,000 carat bulk sample, the results of which will determine the next phase of evaluation and development work.

"Stellar's strategy is to grow significantly by developing a series of high-grade kimberlites into economic diamond mines. In the past six months Stellar has delivered excellent drilling and microdiamond results from the Droujba kimberlite pipe in Guinea and now we are able to announce initial high-grades from the Tongo kimberlite dyke. We will continue the development of these key assets over the coming months."

Tongo Bulk Sampling

A total of 1,000 tons of sample has been collected to date from a 70m long section of the 2.5km long kimberlite Dyke 1. The sample is being extracted by drilling and blasting at a depth of 5m to 10m below surface. The kimberlite averages 70cm in width and the sample trench averages 1.04m in width with the fresh granite that comprise the wall rock proving to be hard and stable in nature.

The first 1,000 tons have been batched into 5 samples to date. The first sample currently being processed weighs approximately 303 tons and is comprised of 201 tons of kimberlite and 102 tons of country rock incorporated during the drilling and blasting of the bulk sample, giving an effective dilution of 34% to the in-situ kimberlite.

Tongo Processing Plant

Construction and commissioning of the Tongo processing plant has now been completed. The plant has a bottom cut-off size of 1mm and is comprised of a small scrubber, a primary jaw and secondary cone crusher and a 5 ton per hour DMS cyclone. Diamond recovery is undertaken over grease tables in a security controlled container.

Now that plant commissioning has been completed the rate of processing is expected to increase going forward.

Tongo Bulk Sampling Results

The first 68.95 dry tons of kimberlite processed during commissioning of the plant yielded 59.25 carats of +1mm stones at a diluted grade of 85.93cpht. This result represents a diluted sample grade as an estimated 34% of the sample comprised granitic country rock incorporated during the blasting and sampling process. The + 1mm in-situ grade of the kimberlite sample is therefore calculated to be approximately 130cpht.

Tongo Dyke 1 Diamond Characteristics

Of the 59.25 carats so far recovered from the bulk sample 53.46 carats (90%) are classified as being of gem quality, whereas 5.87 carats (10%) are classified as non-gem. The goods have been further classified as predominantly sawables (53%) and makeables (41%) with a small clivage (6%) component.

Two stones over 2 carats and six stones of over 1 carat have been recovered from this small parcel, which suggests a good coarse size distribution to the diamond population. The largest diamonds contained in the initial parcel weigh 2.64, 2.02, 1.42, 1.41, 1.16, 1.12, 1.10 and 1.06 carats.

While no conclusions can yet be drawn as to the diamond value of the Dyke 1 kimberlite, due to the small parcel of stones obtained so far, a 130 carat parcel of stones previously recovered from Dyke 1 by Stellar was recently re-valued for the Company at $169 per carat. The same parcel was valued at $144 per carat in May 2010, with the relative price increase reflecting the improvement in the diamond market in the second half of 2010. The average diamond size from the current 59.25 carats is 0.17 per stone, almost twice that of the previous 130 carats of 0.09 per stone, which would possibly suggest a higher diamond value for the smaller parcel.

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.

Stellar also owns full rights over four high-grade kimberlites that are the focus of exploration and development. In Sierra Leone at the Tongo project a bulk sampling programme is ongoing on one key kimberlite to assess the diamond grade and value. At the Kono underground trial mine, bulk sampling by the Company has produced 4,200 carats as part of an economic evaluation exercise. In Guinea drilling is continuing on the diamondiferous Droujba kimberlite pipe and bulk sampling is being planned on the high grade Bouro kimberlite dyke, which is adjacent to the Company's Mandala alluvial diamond mine.

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