Exceptional Diamond Sale Results (7440J)
July 05 2011 - 2:00AM
UK Regulatory
TIDMFDI
RNS Number : 7440J
Firestone Diamonds PLC
05 July 2011
Firestone Diamonds plc
Exceptional diamond sale results
LONDON: 5(th) July 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
-- Second diamond sale of 2011 completed
- 14,248 carats sold for gross proceeds of approximately
$2 million, an increase of 42% in value from April
2011
- Tender attended by more than 31 local and international
buyers
-- Liqhobong
- 12,212 carats from the Main Pipe and Satellite
Pipe sold at an average price of $123/carat, an
increase of 12% from April 2011
- Main Pipe diamonds sold for $149/carat, an increase
of 15% from April 2011 for run of mine production
and 52% from December 2010
- Prices for small diamonds and cape yellows and
browns continue to be very strong
- Higher diamond prices expected for Main Pipe production
as mining moves to the higher grade and higher
value K5 and K6 units in 2011
-- BK11
- 2,036 carats sold at an average price of $235/carat,
an increase of 16% from April 2011 and 33% from
December 2010
- Higher diamond prices expected following commissioning
of secondary crushing circuit
Tim Wilkes, CEO of Firestone Diamonds, commented: "The results
achieved from this tender reflects the continued strong demand for
rough diamonds and the quality of production from Liqhobong and
BK11. With diamond prices expected to remain strong and higher than
expected grades being achieved from the Main Pipe, the value of
Liqhobong continues to increase significantly. The demand for the
higher quality production from BK11 has also yielded very good
results."
The Company has completed its second sale in 2011 of diamonds
from the Liqhobong Mine in Lesotho and BK11 Mine in Botswana. A
total of 14,248 carats were sold for gross proceeds of
approximately $2 million, a 42% increase in value from the April
tender. Prices achieved were very good, with Liqhobong diamonds
achieving a price of $123 per carat and BK11 diamonds achieving a
price of $235 per carat. 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 31 companies attending the tender.
Liqhobong
A total of 12,212 carats from both the Main Pipe and Satellite
Pipe at Liqhobong was sold on behalf of the Company's 75% owned
subsidiary, Liqhobong Mining Development Co. (Pty) Ltd, for
$1,507,624. The average price achieved for production from the Main
Pipe and Satellite Pipe of $123/carat is 12% higher than the price
of $110/carat achieved for Q1 2011 production at the April 2011
tender. The value of diamonds from the Main Pipe was $149/carat,
which represents an increase of 15% from April 2011 and 52% from
December 2010. Demand for small diamonds, cape yellows and browns
continues to be very strong and prices for many of these categories
have increased since the April 2011 tender. The absence of large,
high value stones, which are proven to occur in the K5 unit of the
Main Pipe, in the tender parcel, indicates that higher prices will
be obtained as mining progresses into the K5 material later in
2011.
The grade of material processed from the Main Pipe continues to
be significantly higher than the published resource grade, with the
production grade of 34 carat per hundred tonnes ("cpht") from the
K2 unit being 30% higher than the resource grade of 26 cpht. The
Company expects these grades to be maintained, which would give the
Main Pipe a value of over $50/tonne. With operating costs for Plant
1 expected to be $18/tonne once commissioning of the Phase 1
expansion of Plant 1 has been completed in July 2011, this would
give an operating margin of 60%. Further increases in operating
margins are expected when mining of the higher grade, higher
revenue per carat K5 and K6 units commences later in 2011.
These results continue to support the Company's assessment of
Liqhobong as one of most attractive kimberlites being developed in
the industry today.
BK11
A total of 2,035 carats from BK11 were sold on behalf of the
Company's 90% owned subsidiary, Monak Venture (Pty) Limited, for
$479,995. The average price achieved is $235/carat, which is 16%
higher than the price achieved for Q1 2011 production at the April
2011 tender and 33% higher than the December 2010 price. Demand for
the smaller sawable and makeable crystals was again very high. With
the secondary crushing circuit at BK11 now commissioned and fully
operational, it is expected that the increased diamond liberation
will result in high grades and larger average diamond sizes, which
should result in higher diamond prices.
Diamond Sales and Marketing
The Company has now completed its third diamond tender in
Gaborone and a further three tenders are planned in 2011. Subject
to market conditions and the size of production available for sale,
the Company plans to hold a diamond sale approximately every two
months in 2012. With significantly higher production expected from
Liqhobong in 2012 following the completion of the Plant 1
expansion, which will result in capacity being tripled to 1.3
million tonnes per annum, the 2012 tenders are expected to be
significantly larger than those held in 2011. The Company's diamond
tenders are managed by First Element Pty Ltd, a 100% owned
subsidiary of the Johan Erikson Group from South Africa. Interest
in and feedback from the Company's tenders, which are the first
independent diamond tenders operated in Botswana, has been very
positive.
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
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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