Stellar Diamonds has initiated steps to raise funds for its proposed Tongo-Tonguma mine project, which it says will be the second largest diamond mine in Sierra Leone and the one with the highest $/tonne kimberlite diamond values among newly developed mines across the world.

The junior miner is seeking to raise US$ 45 million to fund exploration activity in the project area after it received what Stellar CEO Karl Smithson is reported to have described as “the first large-scale mining licence to be issued by the government since Ebola”.

As reported earlier, a few months ago, Stellar struck a revenue-sharing deal with Octea, a mining company that already operates the largest diamond mine in the country, Koidu. Under the terms of the deal, Stellar would jointly develop its own Tongo project along with the Tonguma project owned by Octea. First revenue for the project would be used to repay Stellar’s upfront investments after which the revenue would be shared as per the agreed terms, with Octea receiving a 10% share and a US$ 5.5 million bullet payment after Year 5.

According to estimates, the Tongo-Tonguma project would produce 200,000 carats per year from Year 3 from three declines on Tongo Dyke-1, Kundu and Lando over a 21-year mine life. At full production the mine is expected to generate gross revenue of $45 million annually for a gross life of mine revenue of US$ 1.2 billion. Stellar said that there was potential to extend the LoM beyond the initial 21 years by extending the project to greater depth and by bringing in additional kimberlites into the resource and mine plan.

The company recently announced a share issue and an open offer to minority shareholders to raise roughly 500,000 pounds..