Stellar said discussions with Octea Mining over the acquisition of Tonguma, which owns a mining license over the Tonguma kimberlite diamond project in eastern Sierra Leone were terminated and is no longer acquiring the company or its mining license from Octea.
It said its proposed acquisition was deemed to be a reverse takeover under the AIM Rules for companies.
“Although Stellar no longer intends to acquire the Tonguma license, both Stellar and Octea continue to work towards finalisation of an agreement that will bring together, for commercial production, their combined diamond properties that cover the whole of the high value Tongo diamond fields,” said Stellar chief executive Karl Smithson.
“The structure of the agreement would allow Stellar to be operator and marketer of diamonds produced, with a simplified revenue share arrangement payable to Octea in return.”
He said there was a considerable potential upside beyond the 4.5 million carats resource (across Tongo and Tonguma) through bringing into resource and the future mine plan additional high grade kimberlites on both properties.
“We hope to be able to bring the formal agreement and due diligence process to a conclusion in the near future and will continue to engage with potential strategic investors,” said Smithson.