Results of First Diamond Sales (9707X)
December 15 2010 - 2:00AM
UK Regulatory
TIDMFDI
RNS Number : 9707X
Firestone Diamonds PLC
15 December 2010
Firestone Diamonds plc
Results of first diamond sales
LONDON: 15 December, 2010
Firestone Diamonds plc, ("Firestone" or "the Company"), the
AIM-quoted diamond mining and exploration company (ticker:
AIM:FDI), is pleased to announce the successful completion of its
first diamond tender held at the Company's new sales office at
Diamond Technology Park in Gaborone, Botswana.
HIGHLIGHTS
-- First diamond sale completed
- 14,673 carats sold by tender in Botswana, for
gross proceeds of approximately $1.6 million
- Tender attended by more than 30 local and international
buyers
-- Liqhobong
- 12,510 carats from the Main Pipe sold at average
price of $98/carat
- Price achieved is 14% higher than previous valuation
of $86/carat
- Diamond prices in excess of $100/carat expected
in 2011
-- BK11
- 2,162 carats sold at average price of $177/carat
- Price achieved is in line with previous valuation
of $175/carat
- Higher diamond prices expected in 2011 as mining
progresses into higher grade kimberlite
-- Future diamond sales
- Nine diamond tenders planned in 2011
Philip Kenny, CEO of Firestone Diamonds, commented: "The
successful completion of our first tender is a major milestone for
Firestone and marks the completion of our transition into one of
only three listed junior kimberlite producers worldwide. We are
very pleased that the prices achieved for both Liqhobong and BK11
production were higher than expected, and we believe that further
price increases will be achieved for production from both of these
mines in 2011."
The Company has completed the first sale of diamonds from the
Company's BK11 Mine in Botswana and Liqhobong Mine in Lesotho. A
total of 14,673 carats were sold by tender at the Company's sales
office at Diamond Technology Park in Gaborone, Botswana, for gross
proceeds of $1,611,817. The tender ran from 29 November to 9
December 2010, and was attended by more than 30 diamond buyers from
Belgium, Israel, India, Russia and Southern Africa.
Liqhobong
A total of 12,510 carats from the Main Pipe at Liqhobong were
sold on behalf of the Company's 75% owned subsidiary, Liqhobong
Mining Development Co. (Pty) Ltd, for $1,228,625. The average price
achieved of $98/carat is 14% higher than the most recent valuation
of $86/ carat. It should be noted that the Liqhobong parcel
included 1,745 carats of boart (industrial diamonds). This is not
considered to be representative of run of mine production, which is
expected to contain a lower proportion of boart. The average price
of the Liqhobong parcel increases to $113/carat when the boart is
excluded. It should also be noted that there were no special or
fancy coloured stones in the parcel sold, whilst the Main Pipe at
Liqhobong is known to produce such goods. As a result, the Company
expects that prices achieved for Liqhobong production in 2011 will
be in excess of $100/carat.
The Company recently announced a GBP13 million financing that
will allow production to recommence at the Main Pipe in Q1 2011,
with production capacity to be tripled to 1.3 million tonnes per
annum by Q4 2011.
BK11
A total of 2,162 carats from BK11 were sold on behalf of the
Company's 90% owned subsidiary, Monak Venture (Pty) Limited, for
$383,191. The average price achieved of $177/carat is in line with
the most recent valuation of $175/ carat for diamonds from the west
side of BK11, where current mining operations are focused. It
should be noted that the majority of the diamonds sold were
recovered from the treatment of low grade overburden, and are of
lower quality and smaller average size compared to the run of mine
production expected from the higher grade kimberlite that will be
mined in 2011. The BK11 production plant is expected to be
operational at the target production capacity of 1.5 million tonnes
per annum by January 2011.
Future diamond sales
The Company plans to hold nine tenders in 2011. The average size
of the BK11 tenders is expected to be approximately 12,000 carats,
and the average size of the Liqhobong tenders is expected to start
at approximately 15,000 carats, increasing to 50,000 carats by Q4
2011.
For further information, visit the Company's web site at
www.firestonediamonds.com or contact:
+44 20 8834 1028/+44 7831
Philip Kenny, Firestone Diamonds 324 645
Simon Edwards / Tim Redfern, Evolution
Securities (Joint Broker) +44 20 7071 4330 / 4312
Rory Scott, Mirabaud Securities
(Joint Broker) +44 20 7878 3360
Alexander Dewar, Brewin Dolphin
(Nominated Adviser) +44 131 529 0276
Jos Simson / Emily Fenton, Conduit +44 20 7429 6603/+44 7899
PR 870 450
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.
Review by Competent Person
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 29 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).
This information is provided by RNS
The company news service from the London Stock Exchange
END
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