Teeling diamond firm set for Stellar deal

JOHN TEELING’S West African Diamonds has moved closer to finalising its takeover by privately owned Stellar Diamonds.

In a results statement issued yesterday, West African said it expected to relist in the first quarter of this year, after it is absorbed by Stellar, another African resources firm.

The deal being proposed will combine the Dublin-based group with Stellar on a 25/75 basis before a fundraising, which is a condition of the arrangement. The new company will be named Stellar Diamonds.

In the statement issued by West African, it said its board had “considered the company too small to attract significant interest and deemed it essential to grow by consolidation”.

The combined venture will have two diamond-producing mines in Guinea, and three joint ventures in Sierra Leone.

It will also own two kimberlite projects in the region and hopes to use new finance to develop these.

Kimberlite is a type of volcanic rock which can contain diamonds.

West African posted an operating loss of €128,000 for the six months to the end of October, a rise on the €113,000 loss recorded a year earlier.

This came as revenues rose by 400 per cent from €27,000 to €135,000.

One of its mines in Guinea went into production and a new plant was installed to boost capacity. The facility is now capable of producing approximately 1,500 carats per month.

The statement noted “a marked recovery in the diamond market in the latter part of 2009”, which it said should lead to higher prices.