Stellar Diamonds is in advanced negotiations regarding a possible share offer for the entire issued and to be issued share capital of the company by Newfield Resources (NWF).

Under the possible offer, Stellar shareholders would receive in aggregate 95.5 million shares in NWF, expected to equate to approximately 16.4% of the enlarged share capital of NWF.

Stellar shareholders would receive approximately 0.76 of a NWF share for each Stellar share held.

Based on the closing share price of A$29 cents per NWF share (approximately 16.7 pence at the exchange rate of A$1.74 to £1.00) on 31 January 2018, the terms imply an offer value of 12.7 pence per Stellar share.

This represents a premium of 452% to the closing price of Stellar shares of 2.3 pence on 31 January 2018; and 412% to the volume weighted average closing price of Stellar shares in the three months prior to and including 31 January 2018.

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.

The basis for the possible offer is to merge the business interests of NWF and Stellar in Sierra Leone and bring the necessary funding to advance the high-grade and high-value Tongo-Tonguma project, that Stellar holds via its own licences and the Tribute Mining and Revenue Share Agreements with Octea Mining, into production.

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 shareholders through bringing into commercial production the 4.5 million carat Tongo-Tonguma project.


At 9:36am: (LON:STEL) Stellar Diamonds PLC share price was +3.58p at 5.88p