UK-based Stellar Diamonds has finalised tribute mining and revenue share agreements with Octea Mining regarding the Tongo-Tonguma kimberlite diamond project in eastern Sierra Leone.
The move follows the satisfaction or waiver of the conditions precedent to the agreements, including satisfaction of the initial financing condition and all encumbrances related the Tonguma company or assets that have been lifted.
Stellar and Octea have agreed that outstanding title opinions on the Tongo and Tonguma licences will be provided following the payment of licence fees for the existing Tonguma licence, which Stellar is expected to fund in the near future.
The licence has been approved by the Minerals Advisory Board of Sierra Leone and the licence fee is set to be paid once Stellar receives funding.
Stellar is expected to receive the required financing as part of Newfield Resources’ takeover of the company.
The potential offer was highlighted during announcements made on 1 February 2017 and 28 February 2018.
Stellar Diamonds chief executive Karl Smithson said: “The closure of the agreements with Octea mark a major milestone for Stellar as it secures the Tongo-Tonguma project for the planned long-term development programme.
“We have already commenced the front-end engineering design (FEED) programme and have signed a contract for 9,000m of mine development drilling that will enhance the geological control for the first two levels of mining.”
Stellar noted that it is currently undertaking discussions with Newfield Resources regarding the possible offer.
Provided the deal is successfully concluded and supported by the company’s shareholders, it is expected to result in the provision of sufficient funding to bring the Tongo-Tonguma project into production according to a refined mine plan, which will be generated as part of the FEED programme.