Newfield Resources' acquisition of Stellar Diamonds clears all hurdles

JOHANNESBURG (miningweekly.com) – With all conditions for the proposed acquisition by Australian diversified exploration company Newfield Resources of Aim-listed Stellar Diamonds, now met, the acquisition will become effective from April 26.

Newfield had offered 0.76 Newfield shares for each Stellar share, valuing the diamond miner at £7.74-million, or about $10.8-million.

As part of the scheme, Newfield will lend Stellar $3-million to help the miner over its immediate short-term cash needs, while undertaking a rights issue to raise A$30-million to refinance the merged company.

The acquisition gives Newfield access to Stellar’s combined and contiguous Tongo and Tonguma kimberlite concessions, which is expected to create one of the largest diamond mines in West Africa, with an estimated resource of 4.5-million carats.

The boards of both companies believe the combination will create an enlarged and well-funded diamond development group, with a number of highly prospective licences in Sierra Leone and Liberia.

Newfield owns an advanced diamond project in Sierra Leone, which is close to the Tongo-Tonguma project, comprising four exploration licences covering 780.9 km2.

Trading in Stellar’s shares on Aim will be suspended as of 07:30 on April 27, while Stellar’s listing on the Aim will be cancelled on April 30.