Australian exploration company Newfield Resources (NWF) and Sierra Leone based Stellar Diamonds have reached an agreement regarding a proposed acquisition of Stellar’s entire issued and to be issued share capital for £7.74 million.
The already company owns an advanced diamond project in Sierra Leone, comprising four exploration licenses covering an area of 780.9 km2 and several gold projects in Western Australia.
The NWF board believes Stellar’s Tongo-Tonguma kimberlite project, which lies to the north-east of NWF’s Allotropes diamond project, in Sierra Leone, complements NWF’s existing operations in the country, as well as offers the potential for substantial short-term and long-term cash flows.
The companies would merge the business interests of NWF and Stellar in Sierra Leone and use the proceeds of a proposed NWF rights issue – raising $30-million through the placement of 200-million shares at $0.15 apiece – to advance the Tongo-Tonguma project into production.
As part of the deal, Stellar CEO Karl Smithson would be invited to join the NWF board as an Executive Director.