Name of the Project
Tongo diamond project.

Location
The project is located in eastern Sierra Leone.

Client
Newfield Resources’ acquisition of Stellar Diamonds became effective from April 26, 2018.

The boards of both companies believe that the combination will create an enlarged and well-funded diamond development group, with a number of highly prospective licences in Sierra Leone and Liberia.

Project Description
The Tongo diamond project comprises two adjacent mining licences covering a combined area of 134 km².

A previously completed independent preliminary economic assessment (PEA) for the combined mining project demonstrated a financially robust and high-margin project, with a 21-year life-of-mine (LoM). Only three of 11 kimberlite dykes on the properties have been categorised as resources to date – Tongo Dyke-1, Kundu and Lando – for 2.2-million tonnes and 4.5-million carats at a +1.18 mm cutoff.

The PEA was prepared on the basis of an underground mining-only scenario.

The current underground mine plan is configured as a series of declines from surface at Kundu, Lando and Tongo.

Mining levels will be interspaced at depths of 35 m, with the first levels being developed at 40 m below surface.

Based on the current resource models, Tongo will have 11 levels, Lando 10 and Kundu 5 during the LoM.

The orebodies will be accessed through 2 m × 2 m drives and crosscuts into stopes mined using traditional overhand shrinkage stoping mining methods. The ore will be drawn from access points and transported on underground locomotives and tipped into bins on an ore pass system. These bins will feed haulage trucks that will transport the ore to surface and the processing plant.

The existing 50 t/h processing plant at the Koidu mine will be relocated to Tonguma and further upgraded to serve as the processing plant for the new mine. This will save considerable time getting the project to production.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has a pretax net present value, at a 10% discount rate, of $172-million, and an internal rate of return of 49%.

Value
The project has an expected capital expenditure of $31.8-million.

Duration
First production is expected within 12 months.

Latest Developments
Newfield Resources has reported a Joint Ore Reserves Committee-compliant resource estimate of about 7.4-million carats, spread across four kimberlites, at its Tongo diamond project.

About 1.9-million carats, or about 25% of the updated in situ resource, is classed in the indicated category, which underlines a considerably higher confidence level in key geological and technical parameters.

The diamond grades and values, in particular for the Kundu and Lando kimberlites, point to some of the most “impressive kimberlites globally on a dollar- a-tonne rock value basis”.

The updated resource estimate is also predominantly limited to a depth of 230 m from the surface.

However, previous deeper drilling suggests there is potential for the global resource to be significantly increased in the future with more evaluation work.

The updated grade and value results will be incorporated into the mine optimisation work being undertaken as part of the current front-end engineering and design programme on the Tongo project.

This programme remains on track for completion in the fourth quarter.

Key Contracts and Suppliers
Paradigm Project Management and SRK Consulting (FEED).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Stellar Diamonds, tel +44 20 7010 7686 or fax +44 20 7010 7699.