Stellar Diamonds Signs Tribute Mining Agreement for Tongo-Tonguma Mine, Sierra Leone

Mining and Exploration
01/05/2017 10:09

West Africa-focused Stellar Diamonds Project announced it had signed a tribute mining and revenue share agreement with junior Octea Mining for the Tongo-Tonguma diamond project in eastern Sierra Leone. The agreements allow for mining the combined and contiguous Tongo and Tonguma concessions, which the company says, "hosts one of the highest value kimberlite ore bodies in Africa on a dollar per tonne basis and would create the second largest kimberlite diamond mine in West Africa." The estimate is for a 21 year mine life, producing over 4.5 million carats with estimated revenues over US$1.5 billion. At full production, they estimate the mine to generate US$45 million gross revenue per annum, at 200,000 carats per annum at a weighted average value of US$229 per carat, with full production estimated approximately three years after development commences.

“These agreements with Octea which, subject to completion,will allow Stellar to build a single mine for the simultaneous commercial production from the contiguous Tongo and Tonguma kimberlite deposits,” Stellar CEO Karl Smithson said in the statement. He adds, "The project also has a very modest two year capital requirement of just under US$32 million to get into full scale commercial production." Octea will continue to hold the Tonguma mining licence and Stellar will continue to own its adjacent Tongo licence and subsidiary company Sierra Diamonds.