Strong Diamond Sale Results (3081F)

TIDMFDI

RNS Number : 3081F

Firestone Diamonds PLC

21 April 2011

Firestone Diamonds plc

Strong diamond sale results

LONDON: 21 April, 2011

Firestone Diamonds plc, ("Firestone" or "the Company"), the AIM-quoted diamond mining and exploration company (ticker: AIM:FDI), is pleased to announce results from the diamond tender recently held in Gaborone, Botswana.

HIGHLIGHTS

 
 --   First diamond sale of 2011 completed 
      -   7,111 carats sold for gross proceeds of approximately 
           $1.4 million 
      -   Tender attended by more than 25 local and international 
           buyers 
 --   Liqhobong 
      -   4,850 carats from the Main Pipe and Satellite 
           Pipe sold at an average price of $181/carat, an 
           increase of 85% from December 2010 
      -   Excluding Satellite Pipe production and diamonds 
           held over from 2010, run of mine production from 
           the Main Pipe was valued at an average of $130/carat, 
           an increase of 33% since December 2010 
      -   Prices for small diamonds, cape yellows and browns 
           increased by up to 50% since December 2010 
      -   Higher prices expected for diamonds from the Main 
           Pipe as production ramps up 
 --   BK11 
      -   2,241 carats sold at an average price of $230/carat, 
           an increase of 30% since December 2010 
      -   Excluding diamonds held over from 2010, run of 
           mine production was valued at an average of $202/carat, 
           an increase of 14% since December 2010 
      -   Higher diamond prices expected once new crushing 
           circuit is commissioned

Tim Wilkes, CEO of Firestone Diamonds, commented: "We are very pleased with the results of our latest diamond sale, which show significant increases in prices achieved from both Liqhobong and BK11. The higher prices reflect the quality of production from the mines as well as the continued strength of the rough diamond market. We expect to see significant further increases in prices achieved for production from Liqhobong and BK11 as production at both mines increases in 2011".

The Company has completed its first sale in 2011 of diamonds from the Liqhobong Mine in Lesotho and BK11 Mine in Botswana. Prices achieved were very good, with Liqhobong diamonds achieving an average price of $181 per carat and BK11 diamonds achieving an average price of $230 per carat. A total of 7,111 carats were sold for gross proceeds of approximately $1.4 million. The sale was held at the Company's sales office at Diamond Technology Park in Gaborone, Botswana. Demand from local and international buyers remained extremely strong, with a total of 25 companies attending the tender.

Liqhobong

A total of 4,850 carats from both the Main Pipe and Satellite Pipe at Liqhobong were sold on behalf of the Company's 75% owned subsidiary, Liqhobong Mining Development Co. (Pty) Ltd, for $880,220. The average price achieved of $181/carat is 85% higher than the price achieved in December 2010 of $98/carat. It should be noted that the Liqhobong parcel included diamonds from the Satellite Pipe and some higher quality diamonds from the Main Pipe that had been held over from the December 2010 diamond sale. Excluding these diamonds, the value of run of mine production from the Main Pipe in 2011 is now estimated at $130/carat, a 33% increase from the December 2010 valuation.

Demand for small diamonds, cape yellows and browns was very strong and prices for many of these categories increased by up to 50% since the December 2010 tender. The absence of large, high value stones, which are proven to occur in the Main Pipe, in the parcel that was sold indicates that higher prices will be obtained as production at Liqhobong continues to ramp up in 2011 and the Plant 1 expansion project progresses.

With an average grade of 34 carats per hundred tonnes, the Main Pipe now has an estimated revenue of $44/tonne. Operating costs once the current Plant 1 expansion project has been completed in Q4 2011 are estimated at $16/tonne, which would give operating margins of over 60%. Profitability is expected to increase further when mining of the higher grade and higher revenue per carat K5 and K6 units commences later in 2011. These results support the Company's assessment of Liqhobong as one of the most attractive undeveloped diamond resources in the world.

BK11

A total of 2,241 carats from BK11 were sold on behalf of the Company's 90% owned subsidiary, Monak Venture (Pty) Limited, for $516,011. The average price achieved of $230/carat is 30% higher than the price achieved in December 2010 of $177/carat, although the parcel sold also included some diamonds that had been held over from the December 2010 diamond sale. When these diamonds are excluded, the price achieved for BK11 production in 2011 was $202/carat, a 14% increase from the December 2010 sale. The result is very significant, as 2011 production was comprised of mostly smaller diamonds due to the liberation problems that have been experienced at the BK11 plant, as outlined in the announcement of 30 March 2011. Once the planned new secondary crushing is put into operation later in Q2 2011, the average stone size is expected to increase and higher diamond prices are anticipated.

For further information, visit the Company's web site at www.firestonediamonds.com or contact:

 
                                         +44 20 8834 1028/+44 7831 
 Philip Kenny, Chairman, Firestone        324 645 
  Diamonds                                +27 78 457 6623/+267 713 
  Tim Wilkes, CEO, Firestone Diamonds     77686 
 Tim Redfern, Evolution Securities 
  (Joint Broker)                         +44 20 7071 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, Tavistock    +44 20 7920 3150/+44 7899 
  Communications                          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 Firestone's Liqhobong Mine as well as Gem Diamonds' Letseng Mine and 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.

This information is provided by RNS

The company news service from the London Stock Exchange

END

MSCQBLFLFZFFBBL

Firestone Diamonds (LSE:FDI)
Historical Stock Chart
From Jun 2024 to Jul 2024