Stellar Diamonds advises shareholders to accept Newfield offer

West Africa-focused diamond development company Stellar Diamonds has advised shareholders to vote in favour of the proposed takeover by Australian miner Newfield Resources even though a rights issue by the bidder was undersubscribed by AUD 13.4m.

Stellar said NWF's underwriters had agreed to make up the shortfall. The AUD$30m raising is earmarked for the the advancement of Stellar's Tongo-Tonguma kimberlite mine into the production phase.

Tongo-Tonguma is situated to the north-east of NWF’s Allotropes diamond project. Newfield in March agreed to buy Stellar for £7.74m.

Stellar said Newfield had also raised an extra AUD$3M to be used as an unsecured loan with which to primarily commence the FEED programme, mine plan drilling and, as a result of the recent completion of the tribute mining agreement, payment of Tonguma mining licence fees of $1.25m - covering the period up to July.