Issue of Equity
December 03 2010 - 7:35AM
UK Regulatory
TIDMFDI
RNS Number : 3484X
Firestone Diamonds PLC
03 December 2010
Firestone Diamonds plc
Placing to raise GBP13 million
LONDON: 3 December, 2010
Firestone Diamonds plc, ("Firestone" or "the Company"), the AIM-quoted diamond
mining and exploration company (ticker: AIM:FDI), today announces that it has
conditionally placed 52,000,000 new ordinary shares of 20 pence each ("Ordinary
Shares") in the Company (the "Placing Shares") with institutional and other
investors through Mirabaud Securities LLP ("Mirabaud") at a price of 25 pence
per Placing Share (the "Placing Price") to raise GBP13 million before expenses
(the "Placing"). The Placing Price is the closing middle market price of 25
pence per Ordinary Share on 2 December 2010.
HIGHLIGHTS
+----+-+----------------------------------------------------+
| - | Placing to raise GBP13 million through the issue of |
| | 52,000,000 new Ordinary Shares at current market |
| | price |
+----+------------------------------------------------------+
| - | Proceeds to enable accelerated development of the |
| | Main Pipe at Liqhobong |
+----+------------------------------------------------------+
| | -| Plant 1 now scheduled to commence production in Q1 |
| | | 2011 |
+----+-+----------------------------------------------------+
| | -| Plant 1 production capacity to be tripled to 1.3 |
| | | million tonnes per annum by Q4 2011 |
+----+-+----------------------------------------------------+
| - | Remaining work on the Definitive Feasibility Study |
| | for Plant 2 to be undertaken in 2011 |
+----+------------------------------------------------------+
| | -| Target production capacity of 4.2 million tonnes |
| | | per annum |
+----+-+----------------------------------------------------+
| | -| Plant 2 construction decision expected to be made |
| | | in 2012 |
+----+-+----------------------------------------------------+
Philip Kenny, CEO of Firestone Diamonds, commented: "We are very pleased to have
received significant support from existing and new institutional shareholders
for this financing. We believe that the Liqhobong Mine has the potential to be
a highly profitable mining operation and the Company is now well financed to
restart production and commence work on the planned Plant 1 expansion programme
in Q1 2011. With BK11 in full production in 2011 and the expanded Plant 1 at
Liqhobong expected to reach full production capacity in Q4 2011, Firestone is
very well positioned to reach its target of producing 1 million carats per annum
by 2014."
The placing
Of the Placing Shares, 27,215,000 Ordinary Shares (the "First Placing Shares")
have been placed conditional, inter alia, upon the First Placing Shares being
admitted to trading on AIM. Application has been made for the First Placing
Shares to be admitted to trading on AIM ("First Admission"), and it is expected
that trading will commence at 8.00 am on 9 December 2010. The First Placing
Shares will represent approximately 9 per cent. of the Company's enlarged issued
share capital immediately following First Admission.
The balance of the Placing Shares, comprising 24,785,000 Ordinary Shares (the
"Second Placing Shares"), have been placed conditional, inter alia, on the
Company securing approval from its shareholders at the annual general meeting
that has been convened for 23 December 2010 (the "AGM") for the general
allotment of securities and disapplication of pre-emption rights (the
"Approvals"), and upon the Second Placing Shares being admitted to trading on
AIM ("Second Admission"). Notice convening the AGM was sent to shareholders on
30 November 2010. Application will be made for the Second Placing Shares to be
admitted to trading on AIM, and subject to the Approvals being granted, it is
expected that trading will commence at 8.00 am on 24 December 2010. On the
assumption that the First Placing Shares are admitted to AIM, the Second Placing
Shares will represent approximately 9 per cent. of the Company's enlarged issued
share capital immediately following Second Admission.
The proceeds of the Placing will be used to accelerate the Company's plans to
recommence production and to expand the production capacity of Plant 1 at the
Liqhobong Mine in Lesotho, as detailed in the Company's announcement on 24
November 2010, and for general working capital purposes.
Liqhobong development plans
Following completion of the Placing, the Company will accelerate its plans to
recommence production at the Main Pipe at Liqhobong, which is now expected to
take place in Q1 2011. Planning work has already commenced for the mobilisation
of the required staff, equipment and contractors to site in January 2011.
Design work for the proposed expansion of Plant 1, which will triple its
production capacity to 1.3 million tonnes per annum ("mtpa"), is at an advanced
stage and procurement of long lead time items has now commenced. The Company
expects work on the expansion programme to commence in Q1 2011 and to be
completed in Q4 2011. At full capacity of 1.3 mtpa, Plant 1 is expected to
generate revenue of $36 million per annum.
The remaining work required on the Definitive Feasibility Study ("DFS") for the
construction of a 4.2 mtpa plant (Plant 2) will be undertaken in 2011. The
specifications and design for Plant 2 will be finalised using data from the
operation of Plant 1. It is expected that the decision to commence construction
of Plant 2 will be made in 2012, with initial production from Plant 2 expected
to commence in 2013.
Placing Details
Pursuant to the terms of a placing agreement between the Company and Mirabaud
(the "Placing Agreement"), Mirabaud has agreed to use its reasonable endeavours,
as agents for the Company, to place the Placing Shares at the Placing Price with
certain institutional and other investors. In consideration for providing such
services, the Company has agreed to pay Mirabaud a commission of 5 per cent. of
the total gross proceeds raised under the Placing.
The obligations of Mirabaud in respect of the First Placing Shares under the
Placing Agreement are conditional, inter alia, upon admission of the First
Placing Shares to trading on AIM becoming effective in accordance with the AIM
Rules by not later than 9 December 2010 (or such later time as the Company and
Mirabaud may agree, being not later than 16 December 2010).
The obligations of Mirabaud in respect of the Second Placing Shares under the
Placing Agreement are conditional, inter alia, upon the passing of the relevant
resolutions at the AGM and admission of the Second Placing Shares to trading on
the AIM becoming effective in accordance with the AIM Rules by not later than 24
December 2010 (or such later time as the Company and Mirabaud may agree, being
not later than 31 December 2011).
The Placing Agreement contains warranties from the Company in favour of Mirabaud
in relation to, inter alia, the accuracy of the information contained in this
announcement, the Company's investor presentation and certain other matters
relating to the Group and its business. In addition, the Company has agreed to
indemnify Mirabaud in relation to certain liabilities they may incur in respect
of the Placing, except in certain limited circumstances.
Mirabaud has rights, at any time prior to the Second Admission, to terminate its
obligations under the Placing Agreement (to the extent not already performed) in
certain limited circumstances. Such circumstances include, inter alia, material
breach by the Company of the terms of the Placing Agreement or any warranty
therein being untrue, inaccurate or misleading in any material respect.
The First Placing Shares and the Second Placing Shares will, when issued, rank
pari passu in all respects with the existing Ordinary Shares including the right
to receive any dividends and other distributions declared following First
Admission and Second Admission (as applicable).
Issued Share Capital
Following admission to AIM of the First Placing Shares, the total issued
ordinary share capital of the Company will be 295,520,114 Ordinary Shares, all
of which have voting rights.
A copy of the Company's current investor presentation is available on the
Company's website, 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 |
+----------------------------------+--------------------------+
| Rory Scott, Mirabaud Securities | +44 20 7878 3360 |
| (Broker) | |
| | |
+----------------------------------+--------------------------+
| Alexander Dewar, Brewin Dolphin | +44 131 529 0276 |
| (Nominated Adviser) | |
| | |
+----------------------------------+--------------------------+
| Jos Simson / Leesa Peters, | +44 20 7429 6603/+44 |
| Conduit PR | 7899 870 450 |
| | |
+----------------------------------+--------------------------+
Background information on Liqhobong:
Firestone has a 75% interest in the Liqhobong Mine, where a resource of 91
million tonnes at an average grade of 34 cpht containing 31 million carats has
been identified at the Main Pipe. With an average estimated diamond value of
$86/carat and a contained value of approximately $2.7 billion, Liqhobong is
considered by the Company to be one of the most attractive undeveloped
kimberlites in the world. Initial mine planning and pit optimisation studies on
Liqhobong indicate that open pit mining operations can be undertaken to a depth
of 390 metres and would result in the mining of approximately 60 million tonnes
of kimberlite and 19 million carats over a period of approximately 17 years. No
waste stripping will be required for the first 9 million tonnes.
Background information on Firestone Diamonds:
Firestone Diamonds plc is an international diamond mining and exploration
company with operations focused on Lesotho and Botswana. Firestone operates the
Liqhobong Mine in Lesotho and the BK11 Mine in Botswana. Firestone is also the
largest holder of mineral rights in Botswana's diamondiferous kimberlite fields,
controlling approximately 10,000 square kilometres around the major Orapa and
Jwaneng mines and the entire Tsabong kimberlite field. In addition to Liqhobong
and BK11, Firestone has 108 kimberlites in its portfolio, of which 30 have been
proven to be diamondiferous.
Lesotho is emerging as one of Africa's significant new diamond producers, and
hosts Gem Diamonds' Letseng Mine, Firestone's Liqhobong Mine as well as the Kao
and Mothae development projects. 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.
DISCLAIMER
Brewin Dolphin Limited ("Brewin Dolphin") is acting as nominated adviser to the
Company for the purpose of the AIM Rules. Mirabaud, which is authorised and
regulated in the United Kingdom by the Financial Services Authority, is acting
exclusively for the Company in relation to the Placing. Neither Mirabaud nor
Brewin Dolphin is acting for any other person in connection with the matters
referred to in this announcement and they will not be responsible to anyone
other than the Company for providing the protections afforded to clients of
Mirabaud or Brewin Dolphin for giving advice in relation to the matters referred
to in this announcement.
This announcement has been issued by the Company and is the sole responsibility
of the Company.
This announcement does not constitute a prospectus relating to the Company and
has not been approved by the UK Listing Authority, nor does it constitute or
form any part of any offer or invitation to purchase, sell or subscribe for, or
any solicitation of any such offer to purchase, sell or subscribe for, any
securities in the Company under any circumstances, and in any jurisdiction, in
which such offer or solicitation is unlawful. Accordingly, copies of this
announcement are not being and must not be mailed or otherwise distributed or
sent in or into or from the United States, Canada, Australia or Japan or any
other jurisdiction if to do so would constitute a violation of the relevant laws
of, or require registration thereof in, such jurisdiction or to, or for the
account or benefit of, any United States, Canadian, Australian or Japanese
person and any person receiving this announcement, (including, without
limitation, custodians, nominees and trustees) must not distribute or send it,
in whole or in part, in or into or from the United States, Canada, Australia or
Japan.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IOEFSMFFDFSSEIE
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
