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13 September 2011

AIM: STEL

Stellar Diamonds plc

("Stellar" or the "Company")

Progress Update on Droujba Kimberlite Pipe

Stellar Diamonds plc, the London listed (AIM: STEL) diamond mining and exploration company focused on West Africa, provides an operational update on the Company's diamondiferous Droujba kimberlite pipe project located in eastern Guinea.

Highlights:

• 31 holes completed to date for 6,425 metres
• Independent geological modelling indicates potential for 15 million tonnes to 350m depth
• Main pipe and southern blind pipe coalesce giving increased size with depth
• Construction of bulk sampling plant and dewatering of historic workings underway
• Deeper drilling to extend Droujba pipe with at least 2 holes planned to 400m depth
• On track for bulk sampling to commence in December and JORC resource estimate in Q1 2012

Chief Executive Karl Smithson commented:

"We are extremely pleased with the significant progress we have made with drilling of the Droujba kimberlite pipe, which continues to deliver encouraging results. Geological modelling undertaken by independent consultants CAE Mining is guiding the drill programme and demonstrating that Droujba has significant tonnage potential. We are also on track to commence the bulk sampling programme in December. The results from our drilling and bulk sampling programmes will enable the Company to produce a maiden JORC compliant independent resource estimate in the first quarter of 2012. I look forward to keeping shareholders updated as we continue our progress."

Bulk Sample Processing

Construction of the DMS processing plant at the 3 hectare Droujba pipe is underway. The crushing circuit has been manufactured in South Africa and will be shipped to the capital city of Conakry during October. Dewatering of the pipe has also commenced and the emptied pit (anticipated to be approximately 20m from surface) will be cleaned of all sediment in preparation for bulk sampling, which is planned to commence in December, as well as deep drilling of the pipe from the base of the pit. The bulk samples collected will be processed via the 5tph DMS plant with diamonds recovery by an X-Ray Flowsort machine.

The objective of the bulk sampling is to ascertain representative grades of the hypabyssal and breccia kimberlite facies in support of the maiden JORC inferred mineral resource estimate, which will be prepared the first quarter of 2012.

Drilling Programme

Drilling on the Droujba project now totals 25 holes for 5,391 metres. The recent drilling has been focussed on areas where there was previously limited information, particularly the gap at around 100m to 150m depth between the so-called main pipe (which was mined to 20m depth in the 1960's) and the sub-surface southern blind pipe which was discovered by Stellar this year. Drilling has confirmed that these two ore bodies coalesce at depth and the drill results indicate that the single intrusion increases in size with depth. The deepest intersection remains 388m from surface, however further deep drilling is now planned to 400m and possibly deeper.

Drilling has also been undertaken on the adjacent Katcha kimberlite dyke while the 3D modelling of the Droujba pipe was completed and new collar positions determined. The Katcha dyke runs for over 5km in an east-west direction approximately 50m north of Droujba and has previously been mined at surface by artisanal miners. Eight holes totalling 1,034m have so far been drilled on Katcha by Stellar and indicate a relatively consistent kimberlite ore body over 1m wide with a number of adjacent, thinner parallel dykes. The deepest intersection of Katcha to date is 120m from surface. Stellar plans to bulk sample the Katcha dyke in due course similar to the programme at the Company's Tongo dyke project in Sierra Leone.

3D Geological Modelling

Geological 3D modelling is being undertaken by CAE Mining, the Company's independent consultant and competent person for the eventual resource statements. With the coalescence of the two pipe vents, there has been a modelled increase in tonnage of the hypabyssal kimberlite to 5.2million tonnes to 350m depth. Furthermore, the hypabyssal unit of the pipe, which is likely to be of higher grade, has generally been increasing in size with depth. The surrounding envelope of kimberlite breccia has a modelled 9.9 million tonnes to 350m depth. Though this breccia is diamondiferous in nature, as proven by the microdiamond analysis, it is likely to be of lower grade than the hypabyssal kimberlite and will be bulk sampled separately as part of the resource estimation programme.

Droujba Kimberlite Tonnage Calculations

Note: Determined by CAE Mining from the 3D Geological Model, not yet JORC compliant

Microdiamond Sampling and Results

The results of a 268kg sample of kimberlite breccia have been received from the Saskatchewan Research Council laboratory in Canada. Some 52 diamonds were recovered, giving an average of 0.19 stones per kilogramme. The results are slightly lower than the previous kimberlite breccia sample, where 48 diamonds were recovered from 98kg for an average of 0.51 stones per kilogramme, however the results are consistent with the variable nature of the lower grade breccia rock unit. A summary of all microdiamond sample results is given in the table below. The hypabyssal unit is considered to be significantly diamondiferous on the basis of the macrodiamond analysis and this is consistent with historical grade information from the period the pipe was mined during the 1960s.

About Stellar Diamonds plc

Stellar is a London (AIM: STEL) listed diamond mining and exploration company focussed on West Africa where programmes aimed at generating maiden resource estimates at Droujba in Guinea and Tongo in Sierra Leone are ongoing. Mining is continuing at the Mandala project in Guinea. At the nearby Bouro North kimberlite, bulk sampling has yielded an initial grade of 243cpht and sale of the 565 carats produced will be undertaken in the near future. Bulk sampling of the Lion-5 dyke at Kono (Sierra Leone) is due to commence shortly.

In accordance with the AIM Rules, the information in this announcement has been reviewed by Karl Smithson, CEO of Stellar, a qualified geologist with 23 years' experience.

For further information please contact the following or visit the Company's website at www.stellar-diamonds.com.

Stellar Diamonds plc

Karl Smithson,Chief ExecutiveTel: +44 (0) 20 7257 2930

Northland Capital Partners Limited

Gavin Burnell, Edward Hutton

Charles Vaughan (Sales) Tel: +44 (0) 20 7796 8800

Daniel Stewart & Company plc

Martin Lampshire, Oliver Rigby Tel: +44 (0) 20 7776 6550

Pelham Bell Pottinger

Charles Vivian / James MacFarlane Tel: +44 (0) 20 7861 3232