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Private & Confidential. Tel Aviv Presentation February 2008. Disclaimer.

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Private & Confidential

Tel Aviv Presentation

February 2008

disclaimer
Disclaimer
  • This presentation has been compiled by Stellar Diamonds Limited (“the Company”) for information purposes only and is not advice upon which it is intended that recipients should rely in deciding whether or not to invest in the Company. It is provided solely for use by recipients to consider the proposed business of the Company and is not an offer of shares or an invitation to subscribe for shares or to make any loan or other funding available to the Company. This document is only being distributed to persons who are reasonably believed to be sufficiently expert to understand the risks involved as described in the Financial Services and Markets Act (Financial Promotions) Order 2001.
  • The recipients accept that they will make their own investigation, analysis and decision relating to investing in the Company and will not rely upon or use this document to form the basis or any decision on such an investment. This document does not take into account the particular investment objectives, financial situation or the needs of individuals investors and you should consider whether it is suitable for your circumstances and, if necessary, seek professional advice.
  • The directors and advisers of the Company make no representation or warranty themselves, express or implied, as to the accuracy, reasonableness or completeness of the information contained in this document and it should not be relied upon as such. It contains statements and estimates with respect to the future anticipated performance of the Company. Such information may or may not prove to be correct. To the extent that it is lawfully able to do so, the Company and its advisers exclude liability for any representation or as to the accuracy of such statements, estimates or projections.
  • This document is confidential. It is only for the use of those to whom it is issued. It must not be copied or distributed to third parties (other than in confidence to the recipient’s professional advisers).
  • The Company’s affiliates, officers, directors, advisers and employees, including persons involved in the preparation or issuance of this document may from time to time have holdings in the Company’s securities.
introduction
Introduction
  • Created in May 2007 as part of reorganisation of Mano River Resources
  • Focussed diamond mining and exploration company
  • Active in Sierra Leone, Liberia, Guinea and DRC
  • JV partners include: BHP Billiton, De Beers, Petra Diamonds, Trans Hex
  • AIM listing planned for first half of 2008 (future TSX Listing under consideration)
  • Financing of up to £10 million
current capital structure

Mano River Res. Inc

68.5%

Search Gold Res. Inc.

9.5%

Seed and Pre-IPO

Investors

22.0%

Stellar Diamonds Ltd

28.1m shares

3.2m warrants*

Current Capital structure

* 3,016,967 warrants exercisable at £1.20

* 260,390 broker warrants exercisable at £0.87

experienced board
Experienced Board

Karl Smithson, Chief Executive Officer

  • Diamond Geologistand MBA with 20 years African experience, including 8 in West Africa. Senior management positions with De Beers, SouthernEra and Mano River

Lord Peter Daresbury, Non-executive Chairman

  • Involvement in emerging markets since 1994. Previously Chairman of De Vere Hotels plc 2000-2005, Highland Gold Mining Ltd 2002-2004 and Chairman of KazakhGold Group Ltd 2005-2007

Luis da Silva, Executive Director

  • Mining Engineer and MBA with 14 years industry and corporate experience with Blue Circle Industries and Lafarge SA. CEO Mano River Resources

Steven Poulton, Non-executive Director

  • Mining geologist with entrepreneurial track record, previously 7 years with Mano River. Founder of Ariana, African Aura and Altus Strategies.

Philippe Giaro, Non-Executive Director

  • Geologist with 23 years experience in mineral exploration and engineering. President of TSX-V listed SearchGold Resources

Paul Rankine, Non-Executive Director

  • Mining engineer and MBA with 22 years experience including Zambesi Nickel (founder and CEO), Citigroup Asset Mgt., and De Beers. Director of Altima Partners

Guido (‘Guy’) Pas, Non-Executive

  • Founder, Co-founder or seed investor of, Addax&Oryx, Samax, Eastbound, Mano River, Oxus, Afren, AfricaWest, Siberian Diamonds
corporate strategy
Corporate Strategy
  • Focus on advanced projects to generate cash flow in 2008
    • Bring alluvial project into production at Mandala, Guinea
    • Continue underground trial mining in Kono, Sierra Leone
  • Continue key exploration projects
    • Bulk sample high grade kimberlites at Tongo and Bouro
    • Increase alluvial resource in Guinea
    • Discover new diamondiferous kimberlites in Liberia and North DRC
production expected from 2008
Production expected from 2008

Note: * director’s estimate

africa focussed
Africa Focussed

West Africa

Historical Production:

• 150 million carats

• worth $15billion

• Mostly alluvial sources

North DRC

Production in 2006:

• 146,000 carats, >$100/ct

• All alluvial sources

emerging democracies
Emerging Democracies
  • Sierra Leone peaceful since 2002. Two free and fair democratic elections, change of government in 2007 when President Koroma elected.
  • Liberia peaceful since 2004. Ellen Johnson Sirleaf elected first woman president of Africa in 2006.
  • Guinea never at war. New Government appointed by President Conte.
  • DRC stabilising under President Kabila.
  • Massive investment in the resources sector confirms these countries as acceptable and improving investment destinations.
sierra leone overview
Sierra Leone - Overview
  • Historical diamond production estimated at 50 million carats
  • Current diamond production over 600,000 carats valued at $144million
  • Stellar holds licences in Kono and Tongo, the key diamond districts
  • 970ct ‘Star of Sierra Leone’ found in Kono (world’s 3rd largest diamond)

970 ct ‘Star of Sierra Leone’

sierra leone kono jv
Sierra Leone, Kono JV
  • 49:51 JV with Petra Diamonds
  • Underground bulk sampling underway
  • Grades between 50cpht to 80cpht
  • Diamond value of $200/ct forecasted
  • Production decision in 2008

75tph DMS plant site at Kono

Trial mining shaft site

sierra leone bhp billiton jv tongo
Sierra Leone, BHP Billiton JV (Tongo)
  • BHP spending $3.4 million for 51%
  • 4 kimberlite dykes
  • Grab sample grades up to 385cpht
  • 1,200kg yielded 1,894 diamonds (2.05 carats)
  • Grade estimate of over 500cpht
  • Historical value reported $175/carat
guinea overview
Guinea - Overview
  • Highly prospective Man Craton as found in Sierra Leone and Liberia
  • Alluvial diamonds mined since 1935
  • Under explored for primary sources, with no hard rock diamond mining
  • Stellar has kimberlite and alluvial diamond projects:
    • Mandala alluvial diamond project
    • Bouro kimberlite project
guinea mandala alluvial project
Guinea, Mandala Alluvial Project
  • 536,000 carat indicated resource
  • 144,000 carat inferred resource
  • $60/ct estimate
  • Largest diamond 21.47 carats
  • MB100tph plant under construction
  • Mine fleet purchased and shipped
  • Production expected H2-08
  • Attractive margin / low capex mining operation giving early cash flow

Mandala Valley

MB100 Plant in DRC

guinea mandala project scenarios
Guinea, Mandala Project Scenarios

Note: These diamonds were recovered from Search Gold’s bulk sampling in 2002 to 2004 which produced 6,571 carats

guinea bouro kimberlite project
Guinea, Bouro Kimberlite Project
  • Formerly held by De Beers
  • Four dyke zones drilled and sampled
  • 5km Bouro North dyke focus
  • 1,920kg = 4,635 diamonds (10.44 cts)
  • Grade estimation over 500cpht
  • Bulk sample planning stage
liberia overview
Liberia - Overview
  • Highly prospective, unexplored craton with numerous diamond areas
  • Artisanal production approximately 150,000 carats pa at ±$150 / ct (est. Rapaport 4/5/2007)
  • Diamond sanctions lifted in May 2007
  • Stellar holds strong ‘first mover’ land position in Weasua & MCA
liberia weasua jv project
Liberia, Weasua JV Project
  • 50:50 JV with Trans Hex Group
  • 5 diamondiferous pipes (1ha - 6ha)
  • Significant tonnage potential
  • Bulk sampling in progress
  • Further kimberlite discoveries expected
liberia mca licence
Liberia, MCA Licence
  • 11,550km2 of Archaean craton
  • Active artisanal diamond mining
  • Sampling completed
  • Airborne geophysics completed
  • Several new targets defined
  • New pipe discoveries expected
drc overview
DRC - Overview
  • DRC is world’s 3rd largest diamond producer by volume
  • 2006 production of 32 million carats, valued at $540 million ($17/ct) mostly from southern DRC
  • Stellar has properties in the under explored north DRC
  • Estimated production in north DRC valued at $20m per year at >$100/ct
  • Unexplored, highly prospective Archaean craton yielding gem diamonds
north drc bhp billiton jv
North DRC, BHP Billiton JV
  • 10,852 km2 JV with BHPB
  • Stellar to earn 50% interest
  • 500t bulk sample triggers 50%
  • Activity artisanal mining
  • Value reported to be >$300/ct
  • 39 ct stone reported

from buying office in Medje

from buying office in Isiro

200 carat parcel from Medje

Note: These diamonds were observed by Competent Person John Brook in buying offices in Medje and Isiro during his site visit in September 2007.

Medje is located in the southern BHPB JV area.

north drc remec jv

Suspected Artisanal diamond workings

Panga

North DRC, Remec JV
  • 1,308 km2 JV with REMEC
  • Stellar can earn 75% interest
  • Diamond mining town of Panga
  • Contiguous with De Beers
summary
Summary
  • Balanced portfolio of assets in West and Central Africa
    • Near production, bulk sampling & exploration with excellent discovery potential
  • Cash flow expected from Guinea and Sierra Leone in 2008
  • Experienced management team
  • Industry leading JV partners
  • Strong platform for future growth
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Private & Confidential

32 Bloomsbury Street, London, WC1B 3QJ, United Kingdom

Tel: + 44 (0) 207 299 4212 / Fax: + 44 (0) 207 299 4209 / Cell: + 44 (0) 778 370 7971

www.stellar-diamonds.com