Diamond Sales Results (1776O)
September 14 2011 - 2:00AM
UK Regulatory
TIDMFDI
RNS Number : 1776O
Firestone Diamonds PLC
14 September 2011
Firestone Diamonds plc
Diamond sale results
LONDON: 14(th) September 2011
Firestone Diamonds plc, ("Firestone" or "the Company"), the
AIM-quoted diamond mining and exploration company (ticker:
AIM:FDI), announces results from its fourth diamond sale of 2011 in
Gaborone, Botswana, which was concluded on 9 September 2011.
HIGHLIGHTS
Results of tender
-- Fourth diamond sale of 2011 completed
- 24,109 carats available for sale, an increase
of 69% from the July 2011 tender
- 3,395 carats sold for $863,037
- 20,714 carats, principally comprising smaller
diamonds, did not achieve reserve prices and were
withdrawn
-- Liqhobong
- 1,846 carats sold for an average of $231/carat
-- BK11
- 1,549 carats from BK11 sold for an average of
$282/carat
Rough diamond market
-- Prices increased approximately 40% in the first half
of 2011 driven by significant growth in demand from
China and India
-- Prices have fallen approximately 15 to 20% since
the beginning of August 2011 primarily due to uncertainty
in international financial markets
-- Fundamentals remain positive, with demand from China
and India and shortfall in supply expected to continue
to support prices
Future diamond sales
-- Stability expected to return to the market later
in 2011
-- Withdrawn diamonds will be held until the next diamond
sale, which is expected to be held in Q4 2011
-- The Company has the ability to withhold any production
that does not achieve reserve prices until stability
returns to the rough diamond market later in 2011
or in early 2012
Results of tender
A total of 24,109 carats was available for sale, an increase of
69% from the last diamond sale in July 2011. Approximately 3,395
carats were sold for gross proceeds of $863,037. A further 20,000
carats, principally comprising smaller diamonds, were available for
sale, but reserve prices for these diamonds were not achieved at
the tender and they were withdrawn. The diamonds sold included
1,846 carats from Liqhobong, which sold for an average of
$231/carat, and 1,549 carats from BK11, which sold for an average
of $282/carat. Subsequent to the closing of the tender the Company
has received a number of enquiries in relation to the withdrawn
diamonds, but these will be held until the next diamond sale.
Rough diamond market
The results of the diamond sale reflect a drop in overall rough
diamond prices of approximately 15 to 20% since the beginning of
August 2011 and significant volatility in prices in selected
categories of diamonds. This has been primarily driven by recent
uncertainty in international financial markets.
Rough diamond prices increased approximately 40% in the first
half of 2011 driven by significant growth in demand from China and
India. With continued growth expected in demand from China and
India and insufficient new production to address the current
shortfall in supply, the prospects for rough diamond prices remain
positive.
Future diamond sales
The Company expects that stability will return to the rough
diamond market later in 2011 and that the shortfall in rough
diamond supply will limit any further significant decreases in
rough diamond prices. Following the completion of the GBP13.5
million financing announced in July 2011, the Company's cash
position remains secure, and the Company has the ability to
withhold any production that does not achieve reserve prices until
stability returns to the rough diamond market later in 2011 or in
early 2012. The next diamond sale will be held in Q4 2011, with the
timing to be selected on the basis of financial market and rough
diamond market conditions.
Tim Wilkes, CEO of Firestone Diamonds, commented: "We have
continued to make significant progress at both Liqhobong and BK11,
with a 69% increase in production available for sale from the last
tender in July 2011. Although demand for smaller diamonds has
decreased, it has remained firm for larger, better quality
diamonds, and we are confident that we will see increased demand
for our full range of production later in 2011."
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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