FDI Firestone Diamonds Plc

RNS No 9740t
FIRESTONE DIAMONDS PLC
14th December 1998

 
                    Firestone Diamonds plc
                               
     First recovery of diamonds in the Groen River Valley
                               
      Completion of expansion programme at Avontuur Mine
 
                               
 LONDON: 14 December 1998  - Firestone Diamonds plc, ("Firestone" or
 "the Company") the UK-based diamond mining and exploration company,
 reports that since its shares were admitted to trading on the AIM
 market in August it has made significant progress in the further
 development of its two major operations in Namaqualand, Northern Cape
 Province, South Africa, and with its exploration project in Botswana.
 
 Groen River Valley, Namaqualand, South Africa
 
 Firestone has recovered the first diamonds from its Groen River Valley
 project in Namaqualand, Northern Cape Province, South Africa. 
 Preliminary results from the exploration of the 70,000 acre site have
 met the Company's objectives, which were to prove that the palaeo
 river system under investigation is diamondiferous, and to confirm it
 as one of the systems responsible for transporting the large, high
 quality diamonds which have been mined at South Africa's Atlantic
 coast by De Beers and others.
 
 The Company is greatly encouraged by the initial results from this
 latest phase of exploration at Groen River Valley, which is still at
 an early stage.  Treatment of gravels from the first location tested
 has resulted in the recovery of gem quality diamonds proving that the
 target system is diamondiferous.   In addition, analysis of the
 diamonds and associated heavy minerals recovered indicate that they
 belong to one of the palaeo river systems which carried large, high
 quality diamonds through this area.  
 
 Firestone considers these results to be highly significant as they
 provide further evidence that the Groen River Valley area has the
 potential to host several mines in the future.  The Company has now
 established a permanent exploration base in the Groen River Valley and
 intends to increase the pace of exploration in the area in 1999, with
 results of additional excavation and testing expected in the first
 quarter. 
 
 Avontuur Mine, Namaqualand, South Africa
 
 In line with the plans outlined at the time of the Company's shares
 being admitted to trading on the AIM market in August, activity has
 been focused on completing a major expansion programme at the nearby
 Avontuur Mine. Since the acquisition earlier this year of 100% control
 of Avontuur, which is located between two major diamond mines operated
 by De Beers and Trans Hex on the coast of Namaqualand, Firestone has
 been working on a programme to integrate the company's operations on
 its neighbouring Nova and Gras Kom properties into a single expanded
 operation centred on the Avontuur Mine.  This work has been completed
 and the expanded Avontuur Mine now covers an area of over 2,600 acres
 and has diamond reserves/resources of approximately 900,000 carats
 with a gross value of approximately $100 million.  
 
 Highlights of the expansion programme are as follows:
 
    Additional earthmoving equipment has been acquired, resulting in
    earthmoving capacity being more than doubled to over 1 million
    tonnes per annum.
 
    Additions and modifications to the gravel treatment plants have
    been carried out, resulting in treatment capacity being increased
    by 60% to approximately 320 tonnes per day.
 
    A new drilling rig has been acquired which will increase the
    Company's drilling capability 10-fold.  
 
 In parallel with the capacity expansion, activity at Avontuur has also
 concentrated on developing new mining areas to support the increased
 production capacity.  Three new excavations have been opened up and
 are expected to go into full scale production in the first quarter of
 next year.   These new excavations will enable gravel feed to the
 treatment plants to be blended for the first time, allowing greater
 control and predictability of production.  Drilling has also been
 carried out continuously and has resulted in the discovery of three
 new gravel deposits on the mine.  While further evaluation of these
 deposits is required the Company is confident that they will result in
 an increase to the mine's reserves.  
 
 The Company is very pleased with the progress that has been made on
 the Avontuur Mine over the past four months, and expects to see a
 significant and sustained increase in production over the next year as
 a result of the work that has been completed.
 
 Mopipi, Botswana
 
 In Botswana, substantial progress has been made on Firestone's Mopipi
 joint venture project, which is located approximately 50 km west of De
 Beers' Orapa Mine.  A closely-spaced soil sampling programme has been
 carried out in a number of areas which had been identified as being
 the most prospective by previous exploration work.  This programme has
 been completed and the integration of the significant heavy mineral
 anomalies identified by the sampling with aerial photo analysis has
 resulted in several potential kimberlite targets being indicated.  A
 follow-up programme is currently under way to recover larger samples
 directly from the surface of these targets.  Results from this
 programme, which will be completed early next year, will be used to
 prioritise targets for drilling to determine the presence of
 kimberlite.  

 On the basis of results obtained to date, a new prospecting license
 for an additional area of 3,620 acres adjacent to the existing joint
 venture area has been applied for and granted, bringing the joint
 venture's total area in Mopipi to over 20,920 acres.
   
 
 Philip Kenny, Chief Executive of Firestone said:
 
 " We are very pleased with the rapid progress which the Company has
 made over the past few months, and believe that we have established a
 solid foundation for our continued growth.  All of the projects in our
 portfolio are developing as planned, we have added to the portfolio
 over recent months and expect to continue to add more projects over
 the coming year.  We expect that our strategy of funding exploration
 programmes with cash flow from the Avontuur Mine will start to bear
 fruit next year and are very optimistic about our prospects for the
 future."
 
 
 For further information:
 
 Philip Kenny, 
Firestone Diamonds plc           0171-370-6452 / 0831-324-645
 
 Keith Irons, 
Bankside Consultants             0171-220-7477 / 0585-356-639
 
END

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