Stellar Diamonds : Cancellation of existing Share Options Grant of new Share Options PDMR dealings

20 December 2017

AIM: STEL

Stellar Diamonds plc

('Stellar' or the 'Company')

Cancellation of existing Share Options

Grant of new Share Options

PDMR dealings

Stellar, the London Listed (AIM: STEL) diamond mining and exploration company focused on Sierra Leone, announces the cancellation of all 1,013,000 existing options over ordinary shares ('Existing Options') and the intended grant of new share options over 5,250,000 ordinary shares of £0.01 each ('Ordinary Shares') in aggregate to certain Directors and employees of the Company or its subsidiaries ('New Options'). The New Options have an exercise price of 3.25 pence per Ordinary Share. Further terms of the New Options are described below.

Cancellation of Existing Options

The Directors and certain employees were awarded options during the period 2012 to 2014 whose exercise price (following the Company's share reorganisation in 2015) is 62.5p, 75p and 150p. The Board considers that these Existing Options provide no realistic incentive and, accordingly, it has been agreed to cancel these options.

New Options

The New Options are exercisable for a period of 5 years from the date of grant. One third of the New Options will vest immediately, one third in six months and one third in twelve months. The exercise price represents a premium of 30% to the closing share price of 2.50p per share on 19 December 2017.

The New Options will be subject to the terms of the Company's unapproved share option scheme.

The allocation of the New Options is detailed in the following table:

Following the cancellation of the Existing Options and grant of the New Options, the total number of Ordinary Shares under option is 5,250,000 representing 8.47% of the Company's share capital of 62,007,748 ordinary shares.

The grant of the New Options to Karl Smithson, Steven Poulton, Hansjoerg Plaggemars and Rowan Carr as outlined above, are related party transactions for the purposes of Rule 13 of the AIM Rules for Companies. The independent director of the Company, Peter Daresbury, considers, having consulted with the Company's nominated adviser, Cairn Financial Advisers LLP, that the terms of grant of the New Options, as outlined above, are fair and reasonable insofar as Shareholders are concerned.

For further information contact the following or visit the Company's website atwww.stellar-diamonds.com.

About Stellar Diamonds plc

Stellar is an AIM listed (AIM: STEL) diamond development company focused on the 4.5 million carat high-grade and high value Tongo-Tonguma kimberlite diamond project in the world famous diamond fields of eastern Sierra Leone. An independently generated mine plan, based on over 66,000m of drilling that has been completed to date, envisages the production of over 4 million carats, generating gross revenues of more than US$1.2 billion, over a 21 year life of mine. Initial production at Tongo-Tonguma is scheduled to occur in the first year of development, building up to over 200,000 carats per annum, with a weighted average modelled diamond value of $229 per carat. The Tongo-Tonguma mine is estimated to give Stellar an attributable a Post-tax NPV(8) of US$109 million and IRR of 31%.

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

The notifications set out below are provided in accordance with the requirements of the EU Market Abuse Regulation.

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