Debswana to proceed with Jwaneng Tailings Project
June 30 2010 - 2:00AM
UK Regulatory
TIDMFDI
RNS Number : 4731O
Firestone Diamonds PLC
30 June 2010
Firestone Diamonds plc
Debswana to proceed with Jwaneng Tailings Project
LONDON: 30 June, 2010
Firestone Diamonds plc, ("Firestone" or "the Company"), the AIM-quoted diamond
mining and exploration company (ticker: AIM:FDI), today announces that it has
been informed by Debswana Diamond Company ("Debswana") that Debswana has decided
to proceed with the Modular Tailings Treatment Project ("MTTP") at the Jwaneng
Mine with Firestone, subject to contractual arrangements, which are currently at
an advanced stage, being finalised, and suitable financing arrangements being
made for the capital costs of the project. Construction is expected to commence
in H1 2011 with full production scheduled for 2012.
HIGHLIGHTS
+----+-------------------------------------------------------+
| - | Debswana to proceed with modular tailings treatment |
| | plant at the Jwaneng Mine in Botswana, the world's |
| | largest diamond mine by value, subject to financing |
| | arrangements |
| | |
+----+-------------------------------------------------------+
| - | Tailings resource at Jwaneng estimated at over 30 |
| | million tonnes |
| | |
+----+-------------------------------------------------------+
| - | Firestone responsible for financing, construction and |
| | operation of the plant |
| | |
+----+-------------------------------------------------------+
| - | Plant to serve as pilot facility with potential for |
| | deployment to other Debswana mines |
| | |
+----+-------------------------------------------------------+
| - | Construction expected to commence in H1 2011, with |
| | full production of 2 million tonnes per annum |
| | targeted for 2012 |
| | |
+----+-------------------------------------------------------+
| - | Potential revenue of up to $150 million for Firestone |
+----+-------------------------------------------------------+
Philip Kenny, CEO of Firestone Diamonds, commented: "We are very pleased that
Debswana has decided to move forward with the Jwaneng Tailings Project, for
which Firestone was selected due to its track record in financing, building and
operating diamond processing and toll treatment plants. This project is a key
component of our strategy of developing toll treatment opportunities to
supplement our own mining operations at BK11 and the evaluation and development
of our other kimberlites in the Orapa and Tsabong kimberlite fields."
Project Background
Following the submission of tenders by a number of suppliers in 2008, Firestone
announced in Q1 2009 that it and ADP Projects ("ADP") had been selected by
Debswana as the preferred bidders 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.
Jwaneng is the largest diamond mine in the world by value and in 2008 produced
approximately 13 million carats, with an estimated value of $1.8 billion.
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, and could potentially lead to the deployment by Firestone and ADP of
similar plants to exploit additional tailings resources at other Debswana mines.
The Jwaneng tailings resource is estimated to be in excess of 30 million
tonnes. The plant is being designed by ADP, with whom Firestone has a strategic
alliance to jointly design, build and operate modular diamond tailings
processing plants.
Current status
Negotiations with Debswana were originally expected to be concluded in 2009, but
were delayed as a result of the decision by Debswana during the year to
temporarily suspend some of its mining operations and significantly reduce
production. With conditions in the diamond market having significantly improved
Debswana has now decided to proceed with the MTTP at Jwaneng with Firestone,
subject to contractual arrangements, which are currently at an advanced stage,
being finalised, and suitable financing arrangements being made for the capital
costs of the project. Based on contract rates from the Company's previous toll
treatment operations in South Africa, the Directors anticipate that the Jwaneng
tailings project has the potential to contribute up to $150 million in toll
treatment revenue for the Company.
Project schedule
The MTTP will proceed into the execution phase as soon as the Firestone and
Debswana project teams finalise the contractual arrangements and financing
proposals for the project. Construction is expected to commence in H1 2011,
with initial production scheduled for early 2012, and full production to be
reached later in 2012.
Project financing
The estimated capital cost for the project is $55 million. Firestone intends to
finance the project through a special purpose vehicle that will arrange debt
finance for the project against the contract with Debswana. Discussions have
been held with a number of interested lenders and the Company is confident that
suitable financing arrangements will be made available.
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, | +44 20 7071 4330 / 4312 |
| Evolution Securities (Joint | |
| Broker) | |
| | |
+----------------------------------+--------------------------+
| Rory Scott, Mirabaud Securities | +44 20 7878 3360 |
| (Joint Broker) | |
| | |
+----------------------------------+--------------------------+
| Alexander Dewar, Brewin Dolphin | +44 131 529 0276 |
| (Nominated Adviser) | |
| | |
+----------------------------------+--------------------------+
| Emily Fenton / Leesa Peters, | +44 20 7429 6608/+44 |
| Conduit PR | 77885 54035 |
| | |
+----------------------------------+--------------------------+
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 25,000 square kilometres around the major
Orapa and Jwaneng mines and the entire Tsabong kimberlite field. Firestone has
103 kimberlites in its portfolio, of which BK11 is about to commence production,
and 29 others have been proven to be diamondiferous.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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