TIDMFDI
RNS Number : 9077W
Firestone Diamonds PLC
07 February 2012
Firestone Diamonds plc
Operations update
LONDON: 6 February 2012
Firestone Diamonds plc, ("Firestone" or the "Company")
(AIM:FDI), the AIM-quoted diamond mining and exploration company,
is pleased to provide an update on the Company's mining operations
in Lesotho and Botswana.
HIGHLIGHTS
Liqhobong Mine, Lesotho
-- Mining
- Mining of K2, K4 and K5 ore types continuing as
the Main Pipe pit develops
- Construction of the tailings facility starter
wall underway
-- Plant No 1
- Plant throughput increased from 0.4 million tonnes
to 0.6million tonnes per annum
- Grade and mine call factors above target
- Recovery of 3 large approximately 100 carat broken
diamonds in plant
- Increase in number of higher quality diamonds
-- Plant 2
- Definitive Feasibility Study on track for June
2012 completion
BK11 Mine, Botswana
-- Production plant
- Secondary crushing circuit installed and being
optimised
- Bulk sampling continues to confirm resource grades
Technical challenges remain and management is
currently considering various strategic alternatives
-- Mineral Resource
- Higher grade reserve blocks on Bench 5 exposed
Diamond Sales
-- First tender of 2012 concluded on 3(rd) of February
-- Tender well supported with 35 international diamond
buyers attending and all stock available in the tender
was sold
Tim Wilkes, CEO of Firestone Diamonds, commented: "We are very
pleased with the performance of the plant at Liqhobong over the
past 2 months. We are implementing a programme of continued
improvement and enhancement to maximize the recovery of diamonds
and we are confident that we will see positive results over the
coming weeks. The performance of the mineral resource has been
outstanding with respect to grade, mine call factor and diamond
assortment. The recovery of three plus 100 carat diamonds, albeit
broken, confirms Firestone's conviction that the resource has the
ability to produce much higher value diamonds than recovered to
date. These positive indicators bode well for Firestone as we shift
our focus towards phase 2 of the project, being the development of
a world class diamond mine and a purpose built plant facility.
Our recent diamond tender was very well attended and the prices
we received for the higher quality stones indicate continued strong
demand, whilst the near gem and smalls remain under pressure. We
remain cautiously optimistic for the months ahead".
Liqhobong Mine, Lesotho
Continued good progress has been made at Firestone's 75% owned
Liqhobong Mine in Lesotho.
Mining
Mining is now concentrated exclusively on the Main pipe as the
pit and its benches are developed and regular blasting is
undertaken. The current mine plan is focused on extracting maximum
value out of mining the K4 and K5 units on the western side of the
pipe and all indications are that these are the areas producing the
bigger and better quality diamonds.
The K5 unit is the highest grade geological unit in the Main
Pipe resource, with an average resource grade of 45 carats per
hundred tonnes ("cpht") compared to the average resource grade of
28 cpht for the K2 and K4 kimberlite units that have been mined to
date. As the K5 unit will be the primary focus for mining
operations for the next two years, this bodes well for continued
increases in production and diamond prices from Liqhobong.
Plant No 1
P100, the wet front end installed and commissioned during Q4
2011, has allowed the plant to treat much larger tonnages of the
fines-rich K5 ore. Mine management is now implementing a programme
of continued enhancement and the replacement of a number of the
critical units in order to maximize tonnage throughput and value. A
number of these have already been completed and have contributed to
the higher than budgeted grades of 38 carats per hundred tonnes and
mine call factors of 115% being recovered. A priority area of
significant focus at present is to engineer out the components
where the larger diamonds are being damaged or broken. Since late
December 2011, three large approximately 100 carat gem diamonds
have been recovered in fragments indicating breakage is occurring
in the plant. The main areas currently being addressed are surge
bin capacity feeding into the secondary and tertiary cone crushers.
The Company has engaged the required specialists and personnel to
expedite these changes to the plant which should significantly
reduce the amount of diamond damage and breakage in the coming
weeks, and which will also have a marked beneficial effect on the
value per carat of the diamonds recovered.
Plant No 2
DRA were contracted to recommence the Definite Feasibility Study
("DFS") in H2 of 2011 and good progress has been made around a
number of the parallel work streams. The information emanating from
the current plant, specifically around the treatment of the various
ore types and their nuances, is critical to the ore-dressing
studies and design of the final flow-sheet. The DFS is planned for
completion in June 2012 and the Directors believe that when the
DFS's recommendations are implemented, this will transform
Liqhobong mine into a world class diamond operation.
BK11 Mine, Botswana
The project continues to encounter technical challenges with
respect to the liberation of diamonds from the secondary crushing
circuit of the plant.
Production Plant
Construction of the required civils and steelwork to tie-in the
secondary crushers to the existing flow sheet was completed in
November 2011, and installation and optimizing of the circuit
continued for most of December and January. A major gearbox failure
to the secondary scrubber limited progress over the holiday period.
To date the crushing circuit is only partly effective, as increased
recirculating load from the secondary crusher limits the amount of
fresh ground that can be treated by the plant. These problems are
being addressed whilst management considers a number of strategic
options on the way forward for this project.
Mineral Resource
Bulk sampling of the K2 units exposed in the bottom of the pit
on levels 4 and 5 in December 2011 returned grades of 8-10cpht as
predicted, and diamond recovery of the larger diamonds also
improved whilst these units were being mined. Three large good
quality diamonds of 7, 9 and 11 carats were recovered during this
period.
Diamond Sales
The Company has recently held its first diamond tender of 2012
from January 23(rd) to 2(nd) February. The tender was well attended
with 35 diamond buyers attending whilst 23 bids were submitted. The
Company is pleased to announce that all of the diamonds on tender
were sold.
The Company plans to hold its next diamond tender in mid March
2012.
A comprehensive update on the diamond sales and mine production
data for the first quarter of 2012 will be provided in April, as
outlined in the Company's announcement of 14 November 2011.
For further information, visit the Company's web site at
www.firestonediamonds.com or contact:
+44 20 8834 1028 / +44
7831 324 645
+27 78 457 6623 / +267
Tim Wilkes, Firestone Diamonds 713 77686
Rory Scott, Mirabaud Securities
(Broker) +44 20 7878 3360
Robert Beenstock, N+1 Brewin
(Nominated Adviser) +44 20 3201 3710
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 5,250 square kilometres around the major
Orapamines, the majority of the Kokong kimberlite field 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 and several are at the evaluation
stage.
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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