FDI Firestone Diamonds Plc

RNS Number:1755A
Firestone Diamonds PLC
28 June 2004

                             Firestone Diamonds plc


    Establishes joint venture with De Beers on Mopipi exploration project in
                                    Botswana
 De Beers to earn 61% interest for financing project to completion of bankable
                               feasibility study

LONDON:  28th June 2004

Firestone Diamonds plc ("Firestone" or the "Company") today announces that it
has entered into a joint venture with De Beers over the Company's Mopipi
kimberlite exploration project in Botswana.

The Mopipi exploration project is located adjacent to De Beers' Orapa and
Letlhakane diamond mines, which produce 13 million carats per annum, worth
approximately $800 million.  The Mopipi project covers an area of approximately
3,200 square kilometers, making Firestone the largest holder of diamond
exploration rights in the Mopipi and Orapa areas.

Firestone has carried out a substantial amount of exploration at Mopipi.  This
work includes aerial photography and satellite imagery interpretation,
acquisition and interpretation of aeromagnetic, electromagnetic and gravity
data, extensive soil sampling and drilling.  Results of this work strongly
suggest good potential for the presence of a new kimberlite source in the Mopipi
area, and that the kimberlite source is likely to be diamondiferous.

Under the terms of the joint venture agreement, De Beers will be responsible for
financing and carrying out all exploration and evaluation work, up to and
including the completion of bankable feasibility studies on any kimberlites
discovered in the project area.  The joint venture will initially be held 51% by
De Beers and 49% by Firestone.

On completion of the first bankable feasibility study on a kimberlite in the
project area, De Beers' interest in the joint venture will rise to 61%.
Following completion of a bankable feasibility study on a kimberlite, Firestone
and De Beers will each bear their pro-rata share of mine construction costs,
although Firestone will have the option to call on De Beers to provide loan
finance for Firestone's share of these costs.  If Firestone elects to exercise
this option, De Beers will earn an additional 4% interest in the joint venture.

De Beers will be the operator for any mines developed by the joint venture,
although mines for which annual production is projected to be below an agreed
threshold will be operated by Firestone, with Firestone receiving a 61% share of
the profits from such mines.

De Beers will shortly commence an intensive exploration and evaluation
programme.  The first phase of work will comprise the integration of data from
exploration carried out by Firestone with De Beers' extensive geological
database from more than thirty years of exploration and mining in the Mopipi and
Orapa areas.  High resolution geophysical surveys, including ground gravity,
airborne magnetics and Bell Geospace AIR-FTG airborne gravity gradiometry, will
be conducted over the entire project area.  Preparations for the first
geophysical surveys are already under way, and the surveys will commence in July
2004.

Following completion of the surveys, high interest targets will be selected and
prioritised for drilling.  It is expected that the first targets will be drilled
before the end of 2004.  All kimberlites identified by drilling will be sampled
and evaluated for diamond potential.

The initial work programme will also include the re-evaluation of two known
kimberlites in the Mopipi project area, which are located close to De Beers'
Letlhakane mine.  High resolution integrated geophysical surveys will be carried
out to define the shape and size of the kimberlites.  Samples from the
kimberlites will be taken for analysis at De Beers' laboratories to assess their
diamond potential.

Philip Kenny, CEO of Firestone Diamonds, commented today: "We are very pleased
to have De Beers as our joint venture partner at Mopipi.  We consider Mopipi to
be an exceptional exploration project, and results from work that we have
carried out to date indicate that the potential for the discovery of
diamondiferous kimberlite in the area is very good.  Having access to De Beers'
unrivalled expertise and capability in diamond exploration will allow us to
accelerate the pace of exploration at Mopipi, and gives us increased confidence
that we will be able to realise the exciting potential of our licences."

Bill McKechnie, Director of Global Exploration for De Beers also commented:  "De
Beers is very pleased to have concluded this joint venture agreement with
Firestone Diamonds which gives us the opportunity to apply new technologies and
ideas to a part of Botswana that we regard as being highly prospective."

The joint venture agreement is subject to the approval of the Minister of
Minerals, Energy and Water Resources of Botswana.


For further information:

Philip Kenny, Firestone Diamonds         +44 20 7370 6452/+44 7831 324 645
Leesa Peters, Conduit PR                 +44 20 7936 9095/+44 7812 159 885
Jamie Cumming, Bell Lawrie White         +44 141 314 8103/+44 776 8044 620


                       Website: www.firestonediamonds.com


Background information:

Mopipi, Botswana

Botswana is the world's largest producer of diamonds by value, with annual
production of over 20 million carats worth over $1.6 billion, accounting for
over 23% of worldwide production by value.  Botswana hosts De Beers' Orapa,
Letlhakane and Jwaneng mines and is considered to be one of the best countries
in the world to explore for kimberlite - the primary source rock for diamonds.
Firestone's Mopipi project is located adjacent to the Orapa and Letlhakane
mines, which produce approximately 13 million carats per annum, worth
approximately $800 million.  The Mopipi project does not include any ground
located within the Central Kalahari Game Reserve.

Firestone Diamonds

Firestone is also active in the Namaqualand region of South Africa, one of the
most prolific alluvial diamond producing areas in the world, where the Company
operates the Avontuur and Oena mines, and where the Company's new Bonte Koe mine
is due to come into production shortly.  The Company has extensive exploration
properties in Namaqualand, including the Groen River Valley exploration project,
and is also engaged in kimberlite exploration in the United States.  Firestone
is quoted on the London Stock Exchange's Alternative Investment Market (AIM).


                      This information is provided by RNS
            The company news service from the London Stock Exchange
END
JVEILFFRRTIEFIS

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

Firestone Diamonds (LSE:FDI)
Historical Stock Chart
From Jul 2023 to Jul 2024