FDI Firestone Diamonds Plc

 

TIDMFDI 
 
RNS Number : 6355Z 
Firestone Diamonds PLC 
25 September 2009 
 

 
 
FIRESTONE DIAMONDS plc 
Botswana operations update 
 
 
LONDON:  25 September, 2009 
 
 
Firestone Diamonds plc ("Firestone" or "the Company"), the AIM-quoted diamond 
mining and exploration company (ticker: AIM:FDI), is pleased to announce an 
update on its BK11 and Jwaneng tailings projects in Botswana. 
 
 
Highlights 
BK11 
  *  Substantial progress made with bulk sampling 
    *  250,000 tonnes mined since July 
    *  Mining target of 325,000 tonnes to be reached in October 2009 
    *  Mining rate of 5,000 tones per day achieved 
 
 
  *  Pilot production plant fully operational 
  *  Concentrate sorting and diamond recovery being undertaken in Gaborone 
  *  Mine development decision expected to be made in Q4 2009 
 
 
 
Jwaneng Tailings 
  *  Negotiations with Debswana on toll treatment progressing towards target for 
  agreement to be signed in Q4 2009 
  *  Project finance discussions progressing 
 
 
 
Philip Kenny, CEO of Firestone Diamonds, commented: "We are very pleased with 
the progress that we have made since July. We continue to work towards making a 
mine development decision on BK11 and to signing an agreement with Debswana on 
the Jwaneng tailings project before the end of the year.With the Company fully 
financed to production at BK11, and with prices in the rough diamond market 
continuing to recover from their recent lows, we remain confident about 
Firestone's prospects." 
 
 
 
 
BK11 
In March 2009 the Company announced an inferred resource of 12 million tonnes 
containing approximately 830,000 carats with an overall modelled value of 
$123/carat. In July 2009 the Company announced that the modelled value had 
increased to $135/carat and that work on the final phase of evaluation on BK11 
had commenced.  Substantial progress has since been made. 
 
 
Bulk sampling 
The objective of the final phase of evaluation is to process a bulk sample of 
approximately 20,000 tonnes and recover a sufficiently large parcel of 
diamonds in order for a high confidence diamond valuation to be obtained. This 
data is expected to be sufficient to allow a mine development decision to be 
made by the end of the year.  The bulk sample trench is planned to extend to a 
depth of 30 metres and will require the excavation of approximately 325,000 
tonnes of overburden and kimberlite.The location for the bulk sample trench was 
selected so as to intersect both the higher and lower grade kimberlite units 
that have been identified by large diameter drilling. 
 
 
The pit has now advanced to a depth of 20 metres with approximately 250,000 
tonnes of material mined. Mining of the remaining kimberlite is scheduled to be 
completed in October 2009.  The material selected for sampling will be processed 
as twenty separate 1,000 tonne samples in order to provide information on grade 
and geological variability. The remaining excavated kimberlite of approximately 
180,000 tonnes will be stockpiled for processing at a later stage. 
 
 
Performance of the mining equipment on site has been very good, with mining 
rates now averaging over 5,000 tonnes per day. This indicates that the target 
mining capacity of 1.5 million tonnes per annum is likely to be achievable with 
the Company's existing equipment.Commissioning of the 25 tonne per hour pilot 
production plant was completed in July and the plant is now running 
continuously, with concentrate being transported to the Company's office in 
Gaborone for sorting and diamond recovery. 
 
 
The Company expects to be in a position to make a decision to commence mine 
development based on the results of this work in Q4 2009, as planned, subject to 
which production is expected to commence in mid 2010. 
 
 
Mine development planning 
Much of the infrastructure that has been established to support the pilot 
production plant has been designed to support full scale mining operations, 
which will reduce the time and cost of mine development. Sufficient water supply 
and storage capacity is now in place for the target production capacity of 
approximately 1.5 million tonnes per annum.  Work has continued on preparing the 
production plant at the Company's Bonte Koe Mine in South Africa for relocation 
to BK11, subject to results from bulk sampling. 
 
Jwaneng Tailings Project 
In February 2009, Firestone announced that it had been selected by Debswana 
Diamond Company ("Debswana") as the preferred bidder to supply, construct and 
operate a modular tailings treatment plant at the Jwaneng Mine in Botswana on a 
toll treatment basis.  Debswana is a joint venture between the Government of the 
Republic of Botswana and De Beers and is the world's leading diamond producer by 
value.  The Jwaneng plant is intended to serve as a pilot facility to 
demonstrate the economics and capability of the modular plant concept on the 
Jwaneng tailings resource, which is estimated to be in excess of 30 million 
tonnes. 
 
 
Firestone and Debswana have established a joint steering committee for the 
project to negotiate and agree detailed technical and commercial provisions for 
the project. This work has continued to progress towards the target of 
finalising and signing an agreement in Q4 2009. 
 
 
Discussions are also progressing with a number of interested lenders in relation 
to debt financing of the capital costs of the project through a special purpose 
vehicle. The Company expects to be in position to finalise these arrangements 
shortly after the Debswana agreement is signed. 
 
 
 
 
Recent photographs of operations at BK11 will be available at 
www.firestonediamonds.com.  For further information, visit the Company's web 
site or contact: 
 
 
+----------------------------------------+-------------------------------+ 
| Philip Kenny, Firestone Diamonds       | +44 20 8834 1028/+44 7831 324 | 
|                                        | 645                           | 
+----------------------------------------+-------------------------------+ 
| Simon Edwards / Tim Redfern, Evolution | +44 20 7071 4330 / 4312       | 
| Securities (Joint Broker)              |                               | 
|                                        |                               | 
+----------------------------------------+-------------------------------+ 
| Rory Scott, Mirabaud Securities (Joint | +44 20 7878 3360              | 
| Broker)                                |                               | 
|                                        |                               | 
+----------------------------------------+-------------------------------+ 
| Alexander Dewar, Brewin Dolphin        | +44 131 529 0276              | 
| (Nominated Adviser)                    |                               | 
|                                        |                               | 
+----------------------------------------+-------------------------------+ 
| Jos Simson / Leesa Peters, Conduit PR  | +44 20 7429 6603/+44 7899 870 | 
|                                        | 450                           | 
+----------------------------------------+-------------------------------+ 
 
 
Background information on Firestone Diamonds: 
Firestone Diamonds plc ("FDI.L") is an international diamond mining and 
exploration company with operations in Botswana and South Africa. Botswana is 
the world's largest and lowest cost producer of diamonds, with annual production 
worth over $2.5 billion, and is considered to be one of the most prospective 
countries in the world to explore for diamonds. 
 
 
Firestone is the largest holder of mineral rights in Botswana's diamondiferous 
kimberlite fields, controlling over 29,000 square kilometres around the major 
Orapa and Jwaneng mines and the entire Tsabong kimberlite field. Firestone has 
95 kimberlites in its portfolio, of which 24 have been proven to be 
diamondiferous. Sixteen of Firestone's kimberlites are at the bulk sampling 
stage, of which BK11 is the most advanced. 
 
 
Notes: 
1. The information in this statement has been reviewed by Mr. Tim Wilkes, BSc, 
Pr Sci Nat, 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 27 years' experience in diamond exploration, 
mineral resource management and mining. Mr. Wilkes is a member of the 
sub-committee for diamonds of the South African Mineral Resource Committee 
(SAMREC). 
2. All grades and diamond values are based on a bottom cut off of 1mm. 
3. The resource estimates in this statement have been compiled in accordance 
with the SAMREC code. 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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