LON:STEL<\/a>) will look to build on its initial successes through the remainder of the year, according to Northland Capital analyst Andy Hanson.<\/p>\nSpecifically Hanson is looking for Stellar to keep up its good work at the Tongo and Droujba kimberlites, in Sierra Leone and Guinea respectively.<\/p>\n
Indeed last month the company gave investors a run-down of its new plans to fast track exploration on the kimberlites, as diamond prices continue to pick up.<\/p>\n
“Stellar is focused on unlocking the potential of its kimberlite portfolio, which includes some of the highest grade and highest value per ton of ore projects globally,\u201d chief executive Karl Smithson said.<\/p>\n
\u201cWe have recently reported excellent results from the company’s kimberlite drilling and bulk sampling programmes and I look forward to building on this progress through 2011 which will position Stellar as a leading diamond company in Africa.”<\/p>\n
Work is already underway at Droujba, where a 3,000 metre drilling programme kicked off in November. Stellar already knows that Droujba\u2019s kimberlite pipe is larger than it initially expected, after drilling unearthed a \u2018potentially significant extension\u2019 in January.<\/p>\n
Then last month it reported encouraging initial diamond recoveries from drill core samples, finding 538 diamonds from 291 kilos of kimberlite.<\/p>\n
Meanwhile in Sierra Leone, Stellar\u2019s plan for Tongo will see underground bulk sampling start this year, through shaft sinking and opening up development drives at the 30 and 60 metre levels. From here it will be able to collect larger bulk samples, and in turn provide more information on diamond grade and value, as well as underground mining conditions<\/p>\n
At the same time it has two producing alluvial diamond mines, although Stellar recently acknowledged that these project were not performing as well as it hoped.<\/p>\n
In this morning\u2019s interim results, for the six months ended 31 December 2010, Stellar posted a pre-tax loss of US$3.97 million in the six months to December 31, which lead to a reduced loss per share of 3 cents compared with 6 cents a year earlier.<\/p>\n
Diamond sales in the period amounted to US$971,561 for the period.<\/p>\n
Almost all the company\u2019s revenues come from the Mandala and Bomboko alluvial mining operations in Guinea.<\/p>\n
Stellar it has cash of \u00a3800,000 (US$1.3 million) after a last October\u2019s \u00a31.9 million share placing and it intends to raise further funds, because the two alluvial diamond operations have not performed as well as expected.<\/p>\n
Lord Daresbury emphasised that the strategy remains to position Stellar as a significant diamond producer from one or more of its four core kimberlite assets.<\/p>\n
All the while the prospects for these potential mine developments are expected to improve, alongside the strengthening diamond market.<\/p>\n
\u201cThe market outlook generally is encouraging with prices expected to remain robust,\u201d the Northland analyst added.<\/p>\n
Indeed this morning Stellar chief executive Karl Smithson stressed that as diamond prices coming off their lows after a challenging period, Stellar is going through an exciting transformation.<\/p>\n
Similarly Lord Daresbury, Stellar\u2019s chairman, also has an upbeat outlook:\u201cWe have seen strong demand for recent diamond sales and record prices of over US$200 per carat for Bomboko goods have been achieved,\u201d he added.<\/p>\n
\u201cThe directors concur with the view of most diamond and industry analysts that suggest the diamond market will remain robust for 2011 and that the fundamentals of rough diamond supply and demand remain favourable for the medium to long term with strong growth from emerging markets and a rebound from the important US market.\u201d<\/p>\n
Stay with Sierra Express Media, for your trusted place in news!<\/em><\/strong><\/p>\n
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