Stellar Diamonds gets environmental approval for Tongo project in Sierra Leone

16 February 2016 (Last Updated February 16th, 2016 18:30)

Stellar Diamonds has received environmental approval for its wholly owned Tongo Dyke-1 project in Sierra Leone.

Stellar Diamonds has received environmental approval for its wholly owned Tongo Dyke-1 project in Sierra Leone.

The company obtained a letter of approval for its environmental, social and health impact assessment (ESHIA) from the Environmental Protection Agency (EPA) in relation to the mining licence application that was submitted for the project in January.

Stellar Diamonds chief executive Karl Smithson said: "The approval of our ESHIA marks another key step in the process of obtaining the mining and environmental licences that will allow for the development of the 1.45 million carat diamond resource at Tongo Dyke-1, one of four kimberlite dykes at our Tongo project.

"This will allow for the development of the 1.45 million carat diamond resource at Tongo Dyke-1."

"We have also recently successfully concluded the surface rental agreement with the landowners and other key stakeholders and this will now be incorporated in to a legally binding agreement."

The mining licence application still requires approval from the Minerals Advisory Board, the company said.

A positive preliminary economic assessment (PEA) of the Tongo kimberlite diamond project carried out in August 2015 demonstrated an NPV of $53m and IRR of 31% through mining almost one million carats over an 18-year life of mine.

The company engaged consulting company Paradigm Project Management to conduct the PEA over the 1.45 million carat inferred resource of the project.

Initial investment during the first four years is estimated to be $24.8m, which will enable the establishment of surface and underground mining.