Exclusive: Karl Smithson, CEO of Stellar Diamonds Plc (AIM:STEL) speaks to Share Talk

Share Talk spoke to Karl Smithson, CEO of Stellar Diamonds Plc. We talk about the recent suspension of trading and what it meant for the company. We give an overview of the Tongo-Tonguma Project and cover the potential for an estimated NPV of US$104 million. We talk about the proposed tribute agreement and what this would mean for Stellar and what the next steps for the company are.

Further to the announcement dated 23 February 2017, Stellar Diamonds plc, the London listed diamond development company focused on West Africa, is pleased to announce completion of the Placing to raise gross proceeds of £324,500 through the issue of 5,900,000 new Ordinary Shares of the Company at an issue price of 5.5 pence per share. Following completion of the Placing, the suspension of trading of the Company’s Ordinary Shares on AIM is expected to be lifted at 7.30 a.m. today. The Company also provides further details of the Open Offer to raise up to an additional £250,000 through the issue of up to 4,545,455 New Ordinary Shares and a Director subscription to raise £20,000 through the issue of 363,636 new Ordinary Shares, both at an issue price of 5.5 pence per share. Additionally the Company announces the issue of 1,314,969 new Ordinary Shares to Directors in settlement of outstanding fees owed.

Completion of the Open Offer, the Subscription and the issue of the Director Fee Shares is subject to, inter alia, Shareholder approval, which will be sought at the Company’s Annual General Meeting to be held at 10.00 a.m. on 24 March 2017.

A circular (the “Circular”) setting out full details of the proposed Open Offer and incorporating notice of the Annual General Meeting, including resolutions to approve the proposals set out in this announcement, will be sent to Shareholders tomorrow (other than to those who have elected to receive Shareholder communications via electronic communication) and will be available on the Company’s website www.stellar-diamonds.com. Further information is also set out below.

Definitions of capitalised terms are set out below and shall have the same meaning as in the Circular unless the context requires otherwise.

Highlights

·      Restoration of trading on AIM

·      Completion of Placing to raise gross proceeds of £324,500 at a price of 5.5 p per Placing Share

·      Up to 4,545,455 New Ordinary Shares will be issued through the Open Offer and the Conditional Placing to raise gross proceeds of up to £250,000 at a price of 5.5 p per Open Offer Share

·      Open Offer Entitlement for Qualifying Shareholders on the basis of 1 Open Offer Share for every 8.295 Existing Ordinary Shares

·      Director Subscription to raise £20,000 and issue of new Ordinary Shares to Directors in lieu of fees, both subject to approval at the Annual General Meeting

·      Pursuant to the Conditional Placing, 1,381,818 of the Open Offer Shares have been conditionally placed by the Company’s joint broker, Peterhouse Corporate Finance Limited, subject to clawback to satisfy valid applications under the Open Offer in order to ensure that a minimum of £76,000 is raised i.e. if the Open Offer Shares are subscribed for in full by the Qualifying Shareholders, the Conditional Placing Shares will be clawed back in full and the Conditional Placing will not proceed 

·      Placing and Open Offer funds to go towards the completion of the proposed Tribute Agreement over the high-grade and high value 4.5 million carat resource of the Tongo-Tonguma mine project (see below for further details), pay existing creditors of the business and for general working capital

·      Stellar estimates that the Tongo-Tonguma Project has the potential for an estimated after tax NPV(8) of approximately US$104 million and IRR of 31% attributable to Stellar

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