Stellar Diamonds plc recently signed joint venture agreements with a Dubai-based commodities group, Citigate Commodities Trading, for its projects in Guinea and Liberia.

While the Company’s Baoulé kimberlite project in Guinea has been developed to some extent and seen sales of trial mining production in 2015 and 2016, the project in Liberia is at a fairly nascent stage, with the Company only holding two exploration licences, awarded in February of this year. The Company currently has a 75% interest in the Baoulé Project and a 100% interest in the Liberia Project.

The JV with regards to the Baoulé Joint Venture provides for “a staged earn-in” of up to 75% of Baoulé by Citigate’s subsidiary company SAFA Afrique Ltd. 

The amount payable has been broken into three phases: Phase-1 expenditure of US $1.5 million for a 25% shareholding; Phase-2 expenditure of US$ 2 million for a further 25% shareholding; and Phase-3 fund a pre-feasibility study for a further 25% shareholding. During Phase -1, Stellar will be paid a management fee of US$ 150,000 and will also receive 56% of gross revenues from Phase-1 trial mining; while Citigate will have “off-take rights on goods exported during the Citigate earn-in process”.

For the Liberia Joint Venture Citigate’s subsidiary company SAFA Afrique Ltd will get a staged earn-in of up to 85% of the project. In this case, there will be an expenditure of US$ 250,000 for a 25% shareholding in the licences in Phase-1; an expenditure of US$ 2 million for a further 25% shareholding in Phase-2; and an expenditure of US$ 4 million for a further 35% shareholding in Phase-3. Stellar will be paid Phase-1 management fee of US$ 25,000; and receive “pro-rata revenues from any diamond sales during any phase of earn-in”.  As in the Guinea JV, Citigate will have off-take rights on goods exported during the Citigate earn-in process.

For both JVs, Phase 1 will cover a  12-month period;  Phase 2 work is expected to take place over  a two-year period and Phase 3 is expected to cover a three-year period.

“SAFA Afrique Ltd will be awarded a 25% holding in each project upon receipt by Stellar of initial funds due,” Stellar announced. 

Stellar Chief Executive Karl Smithson commented: “Stellar is focussed on the proposed Tongo-Tonguma transaction in Sierra Leone, as previously announced. ....Importantly, these joint ventures will allow the key management of Stellar to focus on the proposed Tongo-Tonguma transaction in Sierra Leone, which we believe offers significant value potential...... We therefore look forward to focussing our efforts on the advancement of Tongo-Tonguma, whilst retaining exposure to Baoulé and the Liberian projects.”