FDI Firestone Diamonds Plc

RNS Number:7069T
Firestone Diamonds PLC
07 November 2005

                             Firestone Diamonds plc



  Expansion of mining and exploration activities in South Africa and Botswana

                          Placing to raise #10 million





LONDON:  7 November 2005



Firestone Diamonds plc ("Firestone" or "the Company"), the AIM-quoted diamond
mining and exploration company, today announces plans to significantly expand
its diamond mining and exploration activities in South Africa and Botswana.  The
Company also announces that it is raising #10 million via a placing of new
ordinary shares with institutional and other investors.



HIGHLIGHTS



*     Significant expansion planned to Firestone's mining and exploration
      activities in South Africa and Botswana



*     Exploration projects

      -  New exploration projects identified in South Africa similar in scale
         and geological setting to Groen River Valley project

      -  Prospecting licence applications submitted covering substantial new
         areas in Botswana



*     Mining projects

      -  Review of mining operations completed

      -  Preparations for Avontuur Mine expansion under way

      -  Expansion potential at Bonte Koe Mine being evaluated

      -  New production stage projects identified and being evaluated



*     Placing

      -  Placing of 7,692,308 new ordinary shares at #1.30 per share to raise
         #10 million





Exploration Projects

South Africa

In June 2005, Firestone entered into a joint venture with De Beers over the
Company's Groen River Valley exploration project (the "GRV Project") in South
Africa.  In October 2005, the Company announced results of the first phase of
work carried out by the joint venture, which indicate a potential resource in
the project area of approximately 9 million carats and a gross value of $2.7
billion to $4.5 billion.  These results confirm that the GRV Project has the
potential to become a major new alluvial diamond producing area, and the Company
considers it to be one of the most attractive undeveloped alluvial diamond
projects in the world.



On the basis of these results, the Company intends to pursue new exploration
projects elsewhere on the Groen River Valley palaeo river systems.  A
significant amount of work has already been carried out on these systems,
resulting in the identification of a number of prospective areas similar in
scale and geological setting to the GRV Project area.  The Company believes
these areas have the potential to host significant resources of large, high
quality diamonds.  These areas will be the primary focus for Firestone's
expanded exploration activities in South Africa, and the Company expects to be
able to announce developments in this regard in the coming months.



Botswana

Over the past 18 months, Firestone has entered into three joint ventures with De
Beers around the Orapa and Jwaneng mines, where the Company is the largest
holder of diamond prospecting licences.  Exploration work is continuing on all
three projects, and the Company is currently awaiting results from bulk sampling
of three kimberlites discovered by De Beers in the Orapa area earlier this year.




The Company now plans to further expand its exploration activities in the Orapa
and Jwaneng regions and in other areas in Botswana considered to be prospective
for the discovery of diamondiferous kimberlites.  Prospecting licence
applications have been submitted covering substantial new areas in a number of
locations in Botswana, and the Company expects to be able to announce
developments in this regard shortly.



Mining Operations

Since the appointment in May 2005 of Tim Wilkes, formerly General Manager
Mineral Resource Management at De Beers, as Director - Resource Development, the
Company has carried out a detailed review of its current and planned mining
operations.  A number of changes are planned as a result of this review.



The Bonte Koe Mine on the Buffels River will be the primary focus for the
Company's current mining operations.  Grades at Bonte Koe have continued to
improve as new mining areas have been opened up and production is expected to
increase significantly in 2006.  The Company is also at an advanced stage in
evaluating a number of other projects in the Buffels River area which could
result in a significant expansion to the scale of operations and production at
Bonte Koe.



The Company is in the process of expanding its operations at the Avontuur Mine.
Activities at Avontuur have been focused on preparations to take over the
adjacent Hondeklip Bay Mine and Marine Concession 7a from Trans Hex, as
announced in July 2005.  This is expected to take place in the first half of
2006 and to result in a significant increase of the Company's production and
resource base at Avontuur.



As a result of the mining operations review, a number of new production stage
and cash-flow generating projects have been identified and are currently being
evaluated.  The Company will announce developments in this regard in due course.
As previously announced, revenue from the Company's mining operations for the
2005 financial year is expected to be in line with 2004, with a significant
increase expected in the coming year as a result of the plans outlined above.



Placing

The Company also announces that it is placing 7,692,308 new ordinary shares of
20 pence each in the Company with institutional and other investors at a price
of #1.30 per share to raise #10 million before expenses.  The proceeds of the
placing will be used to accelerate the development of the company's existing
mining and exploration projects in South Africa and Botswana, to secure new
mining and exploration projects and for general working capital purposes.  These
new ordinary shares will rank pari passu in all respects with the existing
ordinary shares in the Company.  Application will be made for the new ordinary
shares to be admitted to trading on the Alternative Investment Market of the
London Stock Exchange, and it is expected that trading will commence on 14
November 2005.

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 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, which is being explored by De Beers in joint venture with
Firestone, 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
END

STRDGBDBRUGGGUL

Firestone Diamonds (LSE:FDI)
Historical Stock Chart
From Jun 2024 to Jul 2024

Firestone Diamonds (LSE:FDI)
Historical Stock Chart
From Jul 2023 to Jul 2024