Stellar Diamonds Plc has entered an agreement to sell its assets in the Republic of Guinea for $2 million.
The deal, which was entered into BDG Capital Ltd, stipulates an exclusivity period of two months for due diligence and completion of documentation.
Karl Smithson, chief executive of Stellar, commented, “The proceeds will be used to advance the development of our flagship Tongo-Tonguma kimberlite project in Sierra Leone – a project that has an estimated post-tax net present value of $104 million attributable to Stellar.”
He added that the proposed Tongo-Tonguma mine has a low capex requirement of $32 million and the potential to be the second-largest kimberlite diamond mine in West Africa – with forecast production levels of 200,000 carats per annum, generating revenues of over $45 million per annum over a minimum life of mine of 21 years.
“The proposed disposal of our Guinea assets allows management to focus on the Tongo-Tonguma mine development. It also allows for BDG to take the projects forward, which is in the interests of Guinea and local stakeholders,” added Smithson. “We look forward to unlocking the significant value that we believe is inherent in the Tongo-Tonguma development as we advance the company towards sustained commercial production.”