FDI Firestone Diamonds Plc

RNS Number:1180O
Firestone Diamonds PLC
28 June 2005


                             Firestone Diamonds plc

  Joint venture with De Beers Consolidated Mines Limited on Groen River Valley
                                    project


LONDON:  28th June 2005

HIGHLIGHTS


  *   Establishes joint venture with De Beers Consolidated Mines Limited ("
      DBCM") on Groen River Valley exploration project in South Africa

  *   DBCM to earn 61% interest for financing project to completion of
      bankable feasibility study

  *   Firestone has option to have DBCM fund mine construction for additional
      9% interest

  *   DBCM to contribute minerals rights in the Groen River area to the joint
      venture

  *   Two new exploration targets identified

  *   Bulk sampling of HL deposit to be accelerated


Firestone Diamonds plc ("Firestone" or the "Company") today announces that it
has entered into a joint venture with DBCM over the Company's Groen River Valley
exploration project in South Africa.



The Groen River Valley project is Firestone's most important exploration project
in South Africa.   This is due to the fact that the Groen River is the last
major unexplored ancient river system on the west coast of South Africa and that
mining by DBCM and others has proven the presence of diamonds of large size and
exceptional quality in the area.  Diamonds from the Groen River Valley are
considered to be similar to or better in quality than those recovered from the
Orange River.  Diamonds recovered downstream from the joint venture area at the
mouth of the Groen River have recorded values up to and exceeding $1,000 per
carat.  Firestone controls all of the most prospective ground in the lower
reaches of the Groen River, covering an area of approximately 500 square
kilometres.



Joint Venture Terms

Under the terms of the joint venture agreement, DBCM can earn a 61% interest in
the project by financing and carrying out all exploration and evaluation work,
up to completion of bankable feasibility studies on any deposits identified by
exploration in the project area.



Following completion of a bankable feasibility study on any deposit, Firestone
and DBCM will each bear their pro-rata share of mine construction costs,
although Firestone will have the option to call on DBCM to provide loan finance
for Firestone's share of these costs.  If Firestone elects to exercise this
option, DBCM will earn an additional 9% interest in the joint venture.  DBCM
will also contribute mineral rights that it holds in the Groen River Valley
region to the joint venture, covering an area of approximately 90 square
kilometres.  DBCM will retain the right to market any diamonds recovered through
the activities of the joint venture.



Exploration Results

Firestone has carried out a substantial amount of exploration in the Groen River
Valley area over the past ten years, including aerial photography and satellite
imagery interpretation, ground geological mapping, extensive drilling and
sampling of diamondiferous gravels.  This work has resulted in the
identification of the palaeo river systems that were responsible for
transporting the diamonds that have been mined near the mouth of the Groen River
by DBCM and others.



DBCM has conducted a comprehensive geological due diligence review on the
results of Firestone's exploration, including the following:

   *   review and interpretation of material recovered from drilling in the
       area

   *   geological interpretation of drilling logs and profiles

   *   review of the location and value of diamonds recovered by exploration
       in the area, and the grade of the deposits from which the diamonds were
       recovered

   *   review of Firestone's palaeo-drainage interpretation for the area



DBCM has also carried out a significant amount of exploration in the Groen River
Valley in recent years, including a Spectrem high resolution airborne
electromagnetic (EM) survey that has been used to generate a detailed 3D model
of the bedrock topography in the area.  Based on this model, DBCM has
independently developed its own palaeo-drainage interpretation.  This
interpretation is consistent with Firestone's interpretation and confirms that
the area contains a very large resource of potentially diamondiferous alluvial
deposits that may have significant economic potential.



Exploration Plans

DBCM has assumed responsibility for managing exploration and evaluation work and
intends to significantly increase the pace of work on the project.  Since the
end of 2004, Firestone has been carrying out exploration drilling on targets
identified by previous exploration and this work will be continued by DBCM.
Data from exploration carried out by Firestone will be combined with DBCM's EM
and other data to produce an integrated geological model of the project area.
DBCM's 3D bedrock topography model will allow the most attractive exploration
targets to be rapidly identified.  This work is at an advanced stage and has
already identified two new targets for further exploration drilling.



Evaluation of HL Deposit

The DBCM due diligence review also focused on the very large HL gravel deposit,
which was discovered by Firestone in 2003.  The HL deposit is 7 kilometres long
and up to 700 metres wide.  Analysis of EM data for the area where the HL
deposit is located and of material recovered from drilling indicates that the
deposit is similar in age and geological setting to the "Megalodon" deposit
recently discovered by DBCM, which is the largest alluvial diamond deposit
discovered to date in Namaqualand.



As evaluation of the HL deposit will be a high priority for the joint venture,
plans for bulk sampling during the second half of the year are being
accelerated.  Results of this work will provide an indication of the grade of
the HL deposit and the value of the diamonds it contains and will allow an
initial evaluation of the economic potential of the deposit to be made.  Bulk
sampling will be carried out by using a Bauer specialised large diameter auger
drill, extensively used by DBCM's Namaqualand Mines for sampling of alluvial
deposits.  It is expected that by the time the HL bulk sampling programme is
completed, exploration drilling will have identified other deposits for bulk
sampling.



Philip Kenny, CEO of Firestone Diamonds, commented: "We have believed for many
years that the Groen River has the potential to become a major new alluvial
diamond producing region, and DBCM's interest in the project indicates that they
also recognize the potential for a new, large-scale source of high quality
diamonds.  The introduction of DBCM's capability and expertise, and its more
than seventy years' experience in diamond exploration and mining in Namaqualand,
will allow us to accelerate the exploitation of that potential.  We are very
pleased to have signed our fourth joint venture with DBCM in the past twelve
months, and we look forward to continuing to develop the growing relationship
between our companies."



Kerwin Rana, Head of New Business for DBCM , also commented:  "We are pleased to
have concluded yet another value creating partnership with Firestone Diamonds, a
company whose skills and ability we have grown to respect.  We look forward to
collaborating on our expertise and technologies to realize the economic
potential of this project."



The Company expects to be able to update shareholders on progress at its other
projects in Botswana and South Africa and other developments shortly.



For further information:



Philip Kenny, Firestone Diamonds           +44 20 7370 6452 /  +44 7831 324 645
Leesa Peters, Conduit PR                   +44 20 7618 8760 / +44 7812 159 885
Jamie Cumming, Bell Lawrie White           +44 141 314 8103 / +44 7768 044 620
Website: www.firestonediamonds.com



Background information:

Firestone Diamonds plc is an international diamond mining and exploration
company with operations in the Namaqualand region of South Africa, Botswana and
the United States.



Firestone has extensive interests in Botswana, which is the world's largest
producer of diamonds, with annual production of approximately 30 million carats
worth over $2.5 billion.  Botswana is considered to be one of the best countries
in the world to explore for kimberlite - the primary source rock for diamonds.
Firestone's Mopipi, Orapa and Jwaneng projects are located close to the major
Orapa and Jwaneng mines and are all being explored by DBCM in joint venture with
Firestone.  Firestone is also exploring for kimberlite in the US on the
Laurentia craton, which extends into Canada, where it hosts a number of
diamondiferous kimberlite deposits.



Namaqualand, which is located on the west coast of South Africa, has been one of
the world's largest alluvial diamond producing regions for the past 60 years,
with total production to date estimated to be worth more than $3 billion.
Firestone's mining operations in Namaqualand include the Bonte Koe, Avontuur and
Oena Mines, all of which produce high quality alluvial diamonds, and a growing
portfolio of early stage and advanced exploration projects, of which the Groen
River Valley project is the most important.



Firestone has a highly qualified management team with extensive experience in
the exploration, evaluation and development of diamond projects. Firestone is
quoted on the Alternative Investment Market (AIM) of the London Stock Exchange
and trades under the symbol FDI.L.







                      This information is provided by RNS
            The company news service from the London Stock Exchange
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