Stellar Diamonds cuts losses

Stellar Diamonds cuts its losses in the first half of its financial year but still remained firmly in the red.

The firm posted losses of just under $2m for the six months to the end of December, only half of the $4m loss that it reported for the same period of 2010.

This was equivalent to a loss per share of $0.01, which compared to a $0.03 loss the year before.

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The West Africa-focused firm said maiden resource estimates at its Droujba (Guinea) and Tongo (Sierra Leone) sites were ongoing and were expected to be delivered in the first quarter of 2012.

After a very strong first seven months of 2011 the second half of the year saw a drop of around 25% in rough diamond prices, according to research by RBC Capital Markets.

"The company does not expect rough prices in 2012 to repeat the highs and then lows of 2011, but rather remain more stable," said Chairman Lord Daresbury.

"Diamond prices are likely to reflect the balance between short term risk aversion on the demand side and, in the backdrop of limited production increases, the continued strong growth in jewellery demand from Asia that should result in rough diamond price appreciation."