FDI Firestone Diamonds Plc

RNS Number:4720S
Firestone Diamonds PLC
11 October 2005


                             Firestone Diamonds plc

              Groen River Valley joint venture exploration update

LONDON:  11 October 2005


Firestone Diamonds plc ("Firestone" or the "Company") today announces an update
on exploration at its Groen River Valley project (the "GRV Project") in South
Africa.  In June 2005, as previously announced, Firestone entered into a joint
venture over the GRV Project with De Beers Consolidated Mines Limited ("De 
Beers"), under the terms of which De Beers 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.


HIGHLIGHTS

*    Geological modeling of Firestone and De Beers data completed
     -    13 deposits identified
     -    total size of deposits estimated at 360 million tonnes
     -    confirms potential as a significant new alluvial diamond producing
          area
*    Potential value of deposits
     -    regional grades of 2 to 3 carats per hundred tonnes
     -    potential of 9 million carats
     -    diamond values up to $1,000 per carat proven in the area
     -    conservative modeled diamond value of $300 to $500 per carat indicates 
          potential gross value of $2.7 billion to $4.5 billion
*    Bulk sampling of HL Deposit
     -    17 million tonnes of gravel indicated by geophysical data
     -    potential of 500,000 carats, with gross value of $150 million to $250
          million
     -    2,000 metres of probe drilling carried out since July 2005
     -    bulk sampling to commence in November 2005
*    Probe drilling on new deposits
     -    over 8,000 metres of probe drilling carried out by De Beers on KK and
          KR deposits
     -    drilling planned on RH deposit


Philip Kenny, CEO of Firestone Diamonds, commented: "We are very pleased with
the substantial progress that has been made since the signing of our joint
venture with De Beers.  The results of the integration and modeling of
Firestone's and De Beers' data confirm our view that the Groen River Valley has
the potential to become a major new alluvial diamond area producing high quality
diamonds.  We consider the Groen River Valley to be one of the largest and most
attractive undeveloped alluvial diamond areas in the world, and we expect that
the results of the next phase of work on the project will confirm its economic
potential."



Geological Modeling

Since the signing of the joint venture with De Beers, extensive work has been
carried out by Firestone and De Beers personnel on the GRV Project.  The primary
focus of this work has been to combine data from exploration carried out by
Firestone in the project area with data from De Beers' past exploration into an
integrated computerised geological model of the area.  Exploration carried out
by Firestone comprised Landsat and aerial photo interpretation, ground
geological mapping, and extensive probe drilling and sampling of diamondiferous
gravels at over 160 locations in the project area.  De Beers has also carried
out extensive drilling and small scale mining in the project area, and has
conducted a Spectrem high-resolution airborne electromagnetic (AEM) survey,
which has been used to generate a detailed 3D model of the bedrock topography in
the area.

The integration of this data has been completed and computer modeling of the
data has been carried out to produce a more detailed geological interpretation
of the palaeo-drainage systems in the project area.  Thirteen deposits have been
identified in the project area by this work, with an estimated size of 360
million tonnes.

Although grades of up to 10 carats per hundred tonnes ("cpht") have been
recovered from historical sampling in the GRV Project area, using a conservative
estimate of between 2 and 3 cpht indicates a potential resource of approximately
9 million carats in the project area.  The average value of diamonds in the
project area varies, from up to and exceeding $1,000 per carat from marine
deposits at the coast, which have a large average size exceeding 1 carat per
stone, to $500 per carat from palaeo-river deposits inland.  However, for
modeling purposes a conservative diamond value of $300 to $500 per carat has
been used, giving a potential gross value of $2.7 billion to $4.5 billion for
the deposits in the project area.  Further drilling and sampling will be
required to increase the confidence levels of grade and diamond value estimates,
but these initial results confirm that the GRV Project has the potential to
become a major new high quality diamond producing area.

A systematic multi-phase programme of drilling and bulk sampling is now being
undertaken to further evaluate the economic potential of the deposits identified
in the area to date.  The first phase of this programme will include bulk
sampling on the HL Deposit, which is one of four in the project area at an
advanced stage of exploration, and probe drilling on the other three deposits.


Bulk Sampling

The HL Deposit, which was discovered by Firestone in 2003, is 7 kilometres long
and up to 700 metres wide.  Probe drilling has proven that gravels in the
deposit average 2.5 metres in thickness, with average overburden depths of 20
metres.  The HL Deposit is considered to be a very attractive target, as it
contains a significant tonnage of well developed gravels, while results from
drilling indicate significant geological similarities to the major Megalodon
deposit currently being evaluated by De Beers further north in Namaqualand.

Since July 2005, approximately 2,000 metres of probe drilling has been carried
out over 89 holes on the HL Deposit in order to produce a more detailed
geological model of the deposit and to allow locations for bulk sampling to be
selected.  This drilling is still in progress, but geological modeling of the
deposit using data from the AEM survey indicates that it contains approximately
17 million tonnes of gravel.  Using an estimated grade of 3 carats per hundred
tonnes and a conservative diamond value of $300 to $500 per carat, this gives a
potential resource for the HL Deposit of 500,000 carats, with a value of $150
million to $250 million.

Bulk sampling of the HL deposit will be undertaken using a Bauer BG36C large
diameter bucket auger drill ("LDA"), which is extensively used by De Beers for
sampling alluvial deposits.  An initial phase of LDA drilling, which will
comprise approximately 20 LDA holes, is planned with the objective of providing
an initial indication of the grade of the HL deposit.  LDA drilling is scheduled
to commence in November 2005, and is expected to be completed within three
months.  Gravels recovered from LDA drilling will be transported to De Beers'
Koingnaas Mine, approximately 75 kilometres to the north, for processing,
following which valuation of diamonds recovered will be carried out at De Beers'
facilities in Kimberley.

Depending on the results from the initial phase of sampling, a more intensive
full scale evaluation sampling programme is planned to determine both the grade
and value of diamonds to a high level of confidence.  This work is expected to
be completed in the second half of 2006.


Exploration Drilling

Probe drilling has been carried out on the next two high priority deposits,
known as the KK and KR deposits.  Approximately 8,400 metres of probe drilling
has been carried out over 234 holes on these deposits and has confirmed the
presence of alluvial gravels.  Probe drilling is now planned on the RH deposit,
which is the next priority target in the area.

It is also planned to drill a number of LDA holes on the KK, KR and RH deposits
in order to provide an initial indication of the diamond content of these
deposits.  Based on the results of this work, a decision will be made whether to
proceed to bulk sampling on these deposits.



For further information:

Philip Kenny, Firestone Diamonds             +44 20 8834 1028 / +44 7831 324 645
Leesa Peters, Conduit PR                     +44 20 7618 8708 / +44 7812 159 885
Jamie Cumming, Bell Lawrie                   +44 141 314 8103 / +44 7768 044 620


                       Website: www.firestonediamonds.com




Background information on the Groen River Valley Project

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 De Beers 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 of better 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 holds prospecting permits covering all of the most prospective ground
in the lower reaches of the Groen River, covering an area of approximately 500
square kilometres.

In June 2005, Firestone entered into a joint venture with De Beers over the
Groen River Valley project under the terms of which De Beers 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.  De Beers has also
contributed mineral rights that it holds in the Groen River Valley region to the
joint venture, covering an area of approximately 90 square kilometres.


Background information on Firestone Diamonds plc:

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 De Beers 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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