A leading global diamond producer has announced that it will be taken over by a competitor, as it looks to finance one of its flagship projects.
Stellar Diamonds, with a significant diamond mining portfolio in Sierra Leone and Guinea, has announced that it has reached an agreement with Newfield Resources for an all share acquisition.
As part of the acquisition, NWF will fund the development and advancement of the Tongo - Tonguma Project, which Stellar has been looking to fund since 2015.
NWF Resources Limited is an Australian exploration company listed on the ASX market with a focus on a number of diamond exploration licences in Sierra Leone and several gold projects in Western Australia.
Through the combination of the two companies, two groups have the potential to create an enlarged and well-funded diamond development group with a number of highly prospective licences in Sierra Leone and Liberia and an experienced management team with combined 100+ years of diamond sector experience.
Karl Smithson, Chief Executive Officer of Stellar, said: “The Board of Stellar is delighted to recommend to our shareholders the proposed merger and combination of business interests with Newfield. Not only does this come at a significant premium for Stellar Shareholders, but it also secures the funding at a premium for the development of the Tongo-Tonguma Project. Furthermore, the enlarged Company will have the financial and technical capacity to deliver the project which we believe can offer long term and sustainable cash flows to all shareholders.”
The Tongo licence in eastern Sierra Leone is located in the heart of the well known Tongo Diamond fields. With a JORC compliant diamond resource of just over 1.45 million carats for the Tongo Dyke 1 kimberlite dyke project.
Mike Lynn, Executive Director of NWF, said: “Newfield has made significant progress with its exploration work on the Allotropes Diamond Project in Sierra Leone. Through the course of this work, NWF has gained a sound understanding of operating in Sierra Leone and developed excellent goodwill with the relevant local, provincial and national governing entities in the country.