Stellar Diamonds applies for large-scale permit in Sierra Leone

Stellar Diamonds (LON:STEL), a exploration company focused on West Africa, applied Friday for large scale mining at its Tongo project in Sierra Leone.

Chief executive Karl Smithson said the move, which includes the submission of the mine’s final Environmental, Social and Health Impact Assessment (ESHIA) report, marked key milestones as Stellar moves from explorer to miner.

“Notably, as far as I am aware, this is the first large scale mining licence of any kind to be applied for since the onset of the Ebola crisis,” he added.

“As such this therefore also marks an important milestone for the country of Sierra Leone which needs to attract new private sector investment,” Smithson noted.

In early November, the World Health Organization (WHO) declared Sierra Leone Ebola-free, a disease responsible for the deaths of 11,313 people in the region.

The Tongo application will now be processed by the National Minerals Agency and then forwarded to the Minerals Advisory Board, which will make a recommendation to the Minister of Mines.

A preliminary economic assessment in August indicated the project may produce almost one million carats of diamonds over 18 years, generating $387 million in revenues.

On Tuesday, the company posted its first revenues from mining, as trial production got underway at Baoule in Guinea and losses were trimmed to £3.05 million from £4.1 million last year.

The company said at the time it remains upbeat on the future of diamonds, despite a recent prices drop.

Shares in Stellar Diamonds were down more than 5% at 13.75 pence in early afternoon trading in London.