FDI Firestone Diamonds Plc

RNS Number:2715K
Firestone Diamonds PLC
11 October 2006

                             Firestone Diamonds plc

   Prospecting licences granted over the Tsabong kimberlite field in Botswana

LONDON: 11 October 2006

HIGHLIGHTS

*    Prospecting licences granted over the Tsabong kimberlite field in
     Botswana, one of the largest diamondiferous kimberlite fields in the world, 
     with 67 known kimberlites, of which 17 are diamondiferous

*    Tsabong contains many large kimberlites, including the 180 hectare M1
     kimberlite and 5 kimberlites larger than 50 hectares

*    Known kimberlites have not been evaluated with modern techniques

*    Good potential for discovery of new, large diamondiferous kimberlites

*    Threshold for economic viability in the Tsabong area is modest - 20-25 
     cpht and diamond value of $100 per carat

*    Exploration and evaluation plans to be finalised by end October 2006,
     following which field work will commence

Firestone Diamonds plc ("Firestone" or "the Company"), the AIM-quoted diamond
mining and exploration company, is pleased to announce that it has been granted
new prospecting licences over an area of approximately 5,000 square kilometres,
covering the entire Tsabong kimberlite field in Botswana.

The Tsabong kimberlite field is located in south western Botswana, approximately
280 km south west of the Jwaneng Mine, which is the world's biggest diamond
mine.  Tsabong is one of the largest diamondiferous kimberlite fields in the
world, containing 67 known kimberlites, of which 17 have been proven to be
diamondiferous.  Tsabong is noted for the exceptionally large size of many of
its kimberlites, in particular the 180 hectare M1 kimberlite, which is one of
the largest diamondiferous kimberlites in the world.  The Tsabong field also
contains 5 kimberlites each larger than 50 hectares and 30 kimberlites between
20 and 50 hectares in size.

Philip Kenny, CEO of Firestone Diamonds, commented today: "The acquisition of an
entire diamondiferous kimberlite field in Botswana is a very significant
development for Firestone.  With the kimberlite exploration and evaluation
expertise that we now have in the Company, and with our cash and cash flow from
mining operations in South Africa, we will be able to move the Tsabong project
forward rapidly and aggressively.  The probable development by De Beers and
African Diamonds of a new diamond mine in the Orapa area on the AK6 kimberlite,
which was originally discovered and evaluated in the 1970's and considered at
that time to be a small, low-grade kimberlite, provides an indication of the
potential that still remains in Botswana.  I look forward to updating
shareholders on our plans for Tsabong as they develop in due course."

Data Review

The Company has conducted a detailed review of data from work carried out on the
Tsabong field.  This review has confirmed the diamond-bearing potential of the
Tsabong area and indicates that none of the kimberlites have been evaluated
either on an adequate scale or with modern techniques.  The Company has also
conducted a review of data from modern airborne magnetic surveys in the Tsabong
area, which indicates that the potential for the discovery of new, large-tonnage
diamondiferous kimberlites is good.

Economic potential

With rough diamond prices estimated to have tripled since the Tsabong field was
discovered in the early 1980's, the threshold for economic viability in the
Tsabong area has been reduced substantially.  An analysis of the economics of
Botswana's existing diamond mines indicates that a 20 hectare kimberlite in the
Tsabong area with a moderate grade of 20-25 cpht and average quality diamonds of
$100 per carat would support a large-scale, profitable mining operation.

Exploration and evaluation plans

The Company plans to carry out two parallel work programmes at Tsabong.  The
first work programme will be focused on a detailed and systematic evaluation of
all the known kimberlites in the field.  The second work programme will be
focused on exploration for new kimberlites.  Planning for these programmes is at
an advanced stage and is expected to be completed by the end of October 2006,
following which preparations for field work will commence.  Access to the area
is via tarred road from Gaborone and infrastructure in the area is good, so no
significant difficulties are expected in carrying out field work.

Background information on exploration at Tsabong:

The Tsabong kimberlite field was discovered by Falconbridge in the 1970's.
Between 1977 and 1981 Falconbridge discovered a total of 35 kimberlites in the
Tsabong area, including the M1 kimberlite.  A limited amount of evaluation was
carried out on these kimberlites, primarily due to fact that most of them were
covered by between 40 and 80 metres of overburden, which was considered at the
time to be deep and close to the limit for effective evaluation and mining
purposes.  In addition, the microdiamond and kimberlite indicator mineral
analysis techniques available at the time were at an early stage of development
and primitive by comparison to current techniques.  Following the extended slump
in commodity prices in the early 1980's, Falconbridge ceased work on the Tsabong
field and withdrew from all of its diamond exploration projects worldwide.

No further work was carried out on the Tsabong kimberlites until the mid 1990's.
Exploration work was carried out on an intermittent basis between 1994 and
2004 by a number of small Canadian and Australian exploration companies, but
exploration budgets were limited and did not allow any significant new
exploration or evaluation work to be carried out.  Despite this, an additional
32 kimberlites were discovered during this period.  Limited evaluation work was
undertaken on these new discoveries, primarily using a 50 kg sample from a
single hole in the centre of each kimberlite.

Note: The information in this statement has been reviewed by Mr. Tim Wilkes,
BSc, MSAIMM, who is a qualified person for the purposes of the AIM Guidance Note
for Mining, Oil and Gas Companies.  Mr. Wilkes is Chief Operating Officer of
Firestone Diamonds plc and has over 25 years experience in diamond mining and
exploration.  Mr. Wilkes is a member of the sub-committee for diamonds of the
South African Mineral Resource Committee (SAMREC).

For further information:

Philip Kenny, Firestone Diamonds            +44 20 8834 1028 / +44 7831 324 645
Leesa Peters, Conduit PR                    +44 20 7429 6600 / +44 7812 159 885
Jamie Cumming, Bell Lawrie                  +44 141 314 8103 / +44 7768 044 620

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

MSCBCBDGLBBGGLG

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