Guinea Renews Stellar Diamonds' Mandala Mining License For Five Years

(IDEX Online News) – Stellar Diamonds plc, a diamond explorer operating in West Africa, says its Mandala mining license in south eastern Guinea has been renewed for a period of five years.

The firm said it is considering options to restart production following an improvement in rough diamond prices. Previous mining at Mandala yielded 128,000 carats at a grade of 33 carats per hundred tones (cpht) with gems of up to 37 carats in weight.

Chief Executive Karl Smithson said: “The renewal of the mining licence at Mandala allows the company to resume mining and generate cash flow. Based on the previous mining rates a further 200,000 carats are modeled to remain in resource and there is significant potential for additional untested channels.

"Following the improvement in the rough diamond market, the board is currently considering funding options at the project level which would enable the company to bring Mandala back into production in early 2014. Separately, the bulk sampling which forms part of the project feasibility study at the Tongo kimberlite dyke project in Sierra Leone is ongoing.”

Stellar Diamonds was recently informed by the Ministry of Mines that the Mandala mining license was renewed and as part of the renewal process, and in accordance with the country's mining law, the license area was reduced and covers a total of five sq km centred on the diamondiferous valleys of the Mandala and adjoining N’Keleyani rivers.

Between 2009 and 2011, the overall average price realized for diamonds found at the area was $30 per carat, reflecting the prevailing weak rough diamond market at the time and the lower quality smaller stones. The mine was placed on temporary care and maintenance in 2011, pending an improvement in the market conditions and outlook.