Instead, diamond development company Stellar Diamonds and Octea Mining intend to enter into a mining agreement that would allow Stellar Diamonds to promote the Tonguma Licensing Area in eastern Sierra Leone, along with Stellar`s Tongo project and process, and to sell all diamonds extracted from these concessions while paying a portion of the proceeds from the sale to Octea Mining. Karl Smithson, Chief Executive, commented: « We are pleased to have signed these contracts with Octea, which will allow Stellar, subject to their completion, to build a single mine for simultaneous commercial production from the adjacent Kimberlit Tongo (Stellar) and Tonguma (Octea) deposits. The combined project has an initial resource of 4.5 Mct, considered one of the highest qualities of Kimberlitorebodies in Africa based on one tonne dollar per tonne due to high quality diamonds (100 to 260 ct/100 tons at 1.18 mm) and high quality (209 USD/ct to 310 USD/ct). The 21-year mining plan, with constant production of more than 200,000 ct/y at full production, would quantify this development as the second largest Kimberlit diamond mine in West Africa. The project also has a very modest two-year capital requirement of nearly $32 million to be included in large-scale commercial production. Stellar has strong support from all key stakeholders in Sierra Leone for this mine development, which would have a very positive impact on employment, local infrastructure development and future tax revenues for the country. The tribute agreement would be a sub-contract between Octea Mining and Stellar Diamonds, concluded as part of its normal operations, and would allow stellar Diamonds to promote both its 100% Tongo project and the adjacent Tonguma project, stellar Diamonds being the operator of the combined mine. The final tribute agreement is expected to contain a timetable in which the implementation of the mining plan will be implemented, but this timetable has yet to be negotiated. « While Stellar Diamonds no longer intends to acquire the Tonguma license, Stellar and Octea continue to work towards the completion of an agreement that brings together their combined diamond properties covering all high-quality Tongo diamond fields for commercial production, » said Karl Smithson, Chief Executive of Stellar Diamonds. « The structure of the agreement would allow stellar to be the operator and distributor of diamond products, with an octea in return having to pay a simplified allocation agreement. Stellar Diamonds has signed a legally binding conditional tribute mining agreement with Octea Mining Ltd and a revenue-sharing agreement for the Tongo Tonguma Kimberlite diamond project in eastern Sierra Leone.
Context and strengths of the agreements and the project: while the proposals are still subject to a legally binding agreement, Stellar Diamonds and Octea Mining have agreed on exclusive terms under which the main terms of the proposed tribute agreement have been agreed.