Name of the Project
Tongo-Tonguma diamond project.

Location
The project is located in eastern Sierra Leone.

Client
Stellar Diamonds and Octea Mining. In September this year, Stellar agreed with diamond Octea Mining to extend the longstop dates of their agreements to October 31.

Project Description
In September 2016, Stellar Diamonds and junior diamond developer Octea Mining proposed to combine their adjacent Tongo and Tonguma diamondiferous kimberlite dyke properties.

The results of an independent preliminary economic assessment (PEA) for the combined mining project has demonstrated a financially robust and high-margin project, with a 21-year life-of-mine (LoM). Only three of 11 kimberlite dykes on the properties have been categorised as resources to date – Tongo Dyke-1, Kundu and Lando – for 2.2-million tonnes and 4.5-million carats at a +1.18 mm cutoff.

The PEA was prepared on the basis of an underground mining-only scenario.
The current underground mine plan is configured as a series of declines from surface at Kundu, Lando and Tongo.

The declines will be 4 m × 4 m in cross section and will be developed at an angle of 8°. Mining levels will be interspaced at depths of 35 m, with the first levels being developed at 40 m below surface.

Based on the current resource models, Tongo will have 11 levels, Lando 10 and Kundu 5 during the 21-year LoM.

The orebodies will be accessed through 2 m × 2 m drives and crosscuts into stopes mined using traditional overhand shrinkage stoping mining methods. The ore will be drawn from access points and transported on underground locomotives and tipped into bins on an ore pass system. These bins will feed haulage trucks that will transport the ore to surface and the processing plant.

The existing 50 t/h processing plant at Octea’s Koidu mine will be relocated to Tonguma and further upgraded to serve as the processing plant for the new mine. This will save considerable time getting the project to production.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has a pretax net present value, at a 10% discount rate, of $172-million, and an internal rate of return of 49%.

Value
The project has an expected capital expenditure of $31.8-million.

Duration
First production is expected within 12 months.

Latest Developments
The front-end engineering and design (FEED) study for the underground mine development at the Tongo-Tonguma project is under way.

Five consultants from contractors Paradigm Project Management (PPM) and SRK Consulting have arrived on site to start the various work streams related to the study.

The FEED will refine all elements of the mine plan – as determined in the published preliminary economic assessment – to higher levels of confidence to reduce the project delivery risk.

With more than 66 000 m of drilling completed, a further 9 000 m of mine plan related drilling to a depth of 75 m will be completed concurrent with the FEED study.

The study will better define the technical requirements of the project to ensure that the correct underground mine design is implemented, and the treatment plant design and layout are properly designed and the unit processes clearly identified.

The study will also define the final capital expenditure estimate and the operating cost budgets, as well as contribute to the development of a project execution plan and a refined financial model for the project.

In addition, the project execution plan will also be developed. A refined financial model will also be developed for the mine.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Stellar Diamonds, tel +44 20 7010 7686 or fax +44 20 7010 7699.