Stellar Diamonds plc announced that it is in advanced negotiations with Newfield Resources Limited for a possible share offer, which if successful, will help the Company advance the development of the Tongo-Tonguma Project in Sierra Leone.

In a statement, Stellar said that NWF Resources Limited is an Australian exploration company listed on the ASX market with focus on a number of diamond exploration licences in Sierra Leone and several gold projects in Western Australia.

Under the possible offer for the entire issued and to be issued share capital of the Company, Stellar shareholders and the holders of rights over Stellar ordinary shares would receive in aggregate 95.5 million shares in NWF, expected to equate to approximately 16.4% of the enlarged share capital of NWF. The making of the offer is conditional, among other stautory requirements, on NWF securing underwriting for a A$30 million non-renounceable rights issue, the proceeds of which would mainly be used to advance the Tongo-Tonguma project into production, Stellar said.

The Boards of NWF and Stellar both believe that a combination of the two companies would create an enlarged and well-funded diamond development company focussed on Sierra Leone which can generate significant long-term value to the shareholders of both companies through bringing into commercial production the 4.5 million carat Tongo-Tonguma project.

Pic caption: Process plant at Tongo project