Aim-listed diamond mining and exploration company Stellar Diamonds is advancing its 100%-owned Tongo Dyke-1 resource at its Tongo kimberlite project, in Sierra Leone, by undertaking drilling, blasting and sampling after successfully completing the first ore blast in its bulk sampling programme at Dyke-1 last month.

The Tongo kimberlite project forms part of a 9.98 km² licence, in eastern Sierra Leone’s Tongo diamond fields. The licence is owned by Stellar Diamonds and there are four dykes – Dykes 1 to 4 – within the company’s licence area.

“The objective of the bulk sampling programme is to obtain a representative diamond parcel for valuation and price modelling, which forms an integral part of the feasibility study process,” says Stellar Diamonds CE Karl Smithson.

The drilling, blasting and sampling currently being undertaken at Dyke-1 forms part of the company’s bankable feasibility study, which entails undertaking a 2 000 ct bulk sample that will be used for diamond value modelling purposes.

The 2 000 t of extracted Dyke-1 kimberlite will then be processed using the on-site 5 t/h dense- media separation plant, with parcels of diamonds being exported at intervals to Antwerp, in Belgium, for valuation.

The company says, once completed, the whole sample will be subject to diamond value modelling by an independent industry expert.

Smithson says the Tongo Dyke-1 diamonds are of exceptional quality, with a 1 140 ct parcel previously achieving a modelled average value of $248/ct, even though the parcel did not contain any diamonds larger than 4 ct.

Once drilling, blasting and sampling have been undertaken at Dyke-1, Stellar Diamonds will prepare an 11 000 m drilling programme at Dyke-1 to better define its geology along strike and at depth. It will also drill out and decide on bulk sampling for Dyke-4, which will depend on the microdiamond grade modelling at the site.

Dykes 2 and 3 will be drill-delineated subsequent to this to increase the overall project resource while also determining the resource, grade and value within a 15% confidence limit.

The bulk sampling programme started last month and is expected to be completed in June next year, says Smithson.

Subsequent to this, Stellar Diamonds hopes to undertake an environmental-impact assessment, social-impact studies and a capital budgeting programme for financial modelling.

A maiden Joint Ore Reserves Committee-compliant resource statement has been declared for the Dyke 1 kimberlite at 1 074 000 ct, at a grade of 120 cpht and with an average diamond value between $225 and $270 per carat and an on-site value of $298/t.

The resource is defined to a depth of 300 m. Similar kimberlite fissure mines in South Africa are currently exploited at depths of more than 600 m, indicating that there is significant potential to increase the resource base for Dyke-1, highlights the company.

No resource has yet been estab- lished at Dykes 2, 3 and 4. However, Dyke-4 previously bulk- sampled at 110 cpht and $140/c, says Smithson.

He adds that Dykes 2 and 3 have grades forecast on micro- diamond modelling of 140 cpht and 185 cpht respectively.

A high-level economic scoping study was recently undertaken for Dyke-1 by Germiston-based multi- disciplinary mining consultancy Paradigm Project Management (PPM) and, with only 300 m of the deposit having been evaluated, an initial 13 year life-of-mine (LoM) was estimated, whereby 682 000 ct of the 1 074 000 ct in the resource can be mined from treating 1 131 588 t of ore.

The full equity net present value (NPV) for the project, at a 10% rate of return, has been estimated at $16.2-million, with a 23% internal rate of return (IRR). According to Stellar Diamonds, the capital expenditure over the LoM will be about $21.4-million.

Projecting the financial model derived by PPM for a LoM of 17 years and applying a cost- and diamond-price inflation of 4.5%, the NPV shows a significant potential that is higher than the scoping study parameters. A 10% NPV of $53.1-million has been estimated, with a LoM cash flow of $412-million and an IRR of 33%.

In addition to Tongo, the company holds the Droujba project, which has a defined three-million carat resource.