TIDMFDI
RNS Number : 5979H
Firestone Diamonds PLC
01 June 2011
Firestone Diamonds plc
Corporate and operations update
LONDON: 1 June, 2011
Firestone Diamonds plc, ("Firestone" or "the Company"), the
AIM-quoted diamond mining and exploration company (ticker:
AIM:FDI), is pleased to provide an update on the Company's mining
operations in Lesotho and Botswana.
HIGHLIGHTS
Liqhobong Mine, Lesotho
-- Production
- Plant 1 now operating at rated capacity of 0.4
mtpa
- Mining grade of 32 cpht, 15% higher than resource
grade of 28 cpht
-- Plant 1 expansion
- Phase 1 expansion to 0.6 mtpa on target for completion
by end Q2 2011
- Plans for Phase 2 expansion to 1.3 mtpa by end
2011 in progress
-- Mine Planning
- Open pit reserves increased approximately 15%
to 70 million tonnes, containing 23 million carats
BK11 Mine, Botswana
-- Production plant
- Secondary crushing circuit currently being commissioned
to improve diamond liberation
-- Mining
- Mining operations ahead of schedule, with two
million tonnes mined between January and April
2011
Diamond Sales
-- Next tender to be held in Gaborone, Botswana, in
late June
-- Sale expected to be significantly larger than the
last tender in April 2011
Corporate
-- Conditions for Standard Chartered Bank $6 million
loan facility satisfied
-- Mirabaud Securities LLP appointed as sole broker
Tim Wilkes, CEO of Firestone Diamonds, commented: "We are very
excited with the progress that we have made at Liqhobong in the
three months since production commenced. We believe that Liqhobong
will soon become a large scale profitable mining operation,
particularly once we commence mining the high grade K5 and K6 units
in the second half of this year. We also expect to reach full
production levels at BK11 shortly."
Liqhobong Mine, Lesotho
Continued good progress has been made at Firestone's 75% owned
Liqhobong Mine in Lesotho.
Plant 1 Production
Following the commencement of production at Liqhobong in
February 2011 and the completion of a number of modifications to
the processing plant, Plant 1 is now operating at its rated
capacity of 0.4 million tonnes per annum "mtpa".
Mining operations at the Main Pipe during April and May have
been focused on the K2 and K4 kimberlite units. The average grade
recovered from K2 and K4 during this period was 32 carats per
hundred tonnes ("cpht"), which is approximately 15% higher than the
resource grade for these units of 28 cpht.
Work on the expansion of Plant 1, which will triple production
capacity to 1.3 mtpa, is on schedule for completion in Q4 2011. The
first phase of this expansion, which will increase capacity to 0.6
mtpa and will allow the processing for the first time of the high
grade K5 and K6 kimberlite units, is on schedule for completion at
the end of Q2 2011.
At full production capacity Plant 1 is expected to generate
revenue of $57 million per annum, based on the average price
achieved in April 2011 for diamonds from the Main Pipe of
$130/carat.
Plant 2 Development
Work is continuing on the specifications and design for Plant 2,
which has a target production capacity of 4.2 mtpa. The Company
expects to be in a position to make the decision to commence
construction of Plant 2 by the end of 2011. Plant 2 is expected to
commence operation in 2013 and to generate revenue of $185 million
per annum at full production. Plant 1 will remain fully operational
until Plant 2 is brought into full production. With estimated
revenue of $44/tonne for the Main Pipe and estimated operating
costs for Plant 2 of $13-15/t, the Company expects Liqhobong to be
a profitable, long term mining operation.
Mine Planning
Following the recent increase in value of production from the
Main Pipe to $130/carat, a new pit optimisation study has been
completed. The results of this study indicate that open pit mining
operations can be undertaken to a depth of 520 metres, which would
result in the mining of approximately 70 million tonnes of
kimberlite and 23 million carats, an increase of approximately 15%,
over a period of approximately 20 years.
BK11 Mine, Botswana
Good progress has also been made at Firestone's 90% owned BK11
Mine in Botswana.
Production
As reported in the announcement dated 29 March 2011, a number of
problems were encountered with the crushing and scrubbing circuits
at the BK11 plant during Q1 2011, resulting in lower than
anticipated diamond liberation from the material being processed.
Substantial progress has been made since then to improve diamond
liberation. A secondary crushing circuit based on mobile crushers
has been designed. The mobile crushers have been secured and
commissioning is currently under way and expected to be completed
by the end of Q2 2011, following which diamond liberation is
expected to be significantly improved.
Mining
Additional mining capacity has been employed at BK11 to
accelerate the deepening of the pit into the softer ore at depth,
which is the principal material that the processing plant was
designed to process. Diamond liberation is expected to be much
higher from processing of this material. Mining operations at BK11
are now ahead of plan, with approximately two million tonnes of
overburden and kimberlite mined between January and April 2011.
Diamond Sales
The Company plans to hold its second diamond sale of 2011 during
the last two weeks of June at its diamond sales office at Diamond
Technology Park in Gaborone, Botswana. The sale is expected to be
significantly larger than the last sale in April 2011.
Corporate
In March 2011 the Company announced that it had agreed terms
with Standard Chartered Bank of Botswana for a $6 million, 3 year,
6.5% fixed rate credit facility. The Company has satisfied all the
conditions for this facility, which is now available for drawdown.
This facility will give the Company greater flexibility in planning
and financing its activities in Botswana and in Lesotho.
The Company also announces that Mirabaud Securities LLP has been
appointed as sole broker to the Company with immediate effect.
For further information, visit the Company's web site at
www.firestonediamonds.com or contact:
+44 20 8834 1028/+44 7831
324 645
Philip Kenny, Firestone Diamonds +27 78 457 6623/+267 713
Tim Wilkes, Firestone Diamonds 77686
Rory Scott, Mirabaud Securities
(Nominated 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 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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