FDI Firestone Diamonds Plc

RNS No 6899j
FIRESTONE DIAMONDS PLC
27th January 1999

          Firestone acquires valuable new exploration rights
                                 
     Company now controls highly prospective area in South Africa
 
 LONDON: January 27, 1999  - Firestone Diamonds plc, FDI.L ("Firestone" or
"the  Company"), the UK-based diamond mining and exploration company, has
acquired exploration rights over a highly prospective property on the Atlantic
coast of Namaqualand, one of South Africa's most important diamond producing
regions. 
 
 The Company has acquired rights to prospect for and mine diamonds on the
property known as Eiland Punt Noord, ("Eiland") from Sandy Bay Diamonds
(Proprietary) Limited ("Sandy Bay"), a private South African company.  
 
 Eiland is one of the few remaining properties on the coast of Namaqualand
which is not controlled by De Beers or other major diamond mining companies. 
The property covers a total area of 4,316 acres and is located approximately 2
km south of the current mouth of the Groen River.  The ancient Groen River is
known to have carried diamonds of large size and exceptional quality.
 
 Eiland adjoins Firestone's existing Groen River properties where the Company
recently made a new diamond discovery.  With this acquisition, Firestone now
controls diamond prospecting rights over most of the prospective area in the
lower reaches of the Groen River valley, covering a total of over 74,000
acres, and extending more than 20 km inland from the coast.  
 
 Under the terms of the agreement with Sandy Bay, Firestone will make an
initial payment of R200,000 (approximately #20,000) and will also pay Sandy
Bay a royalty of 7.5% on the gross value of diamonds recovered in the first
year, decreasing to 6.5% for subsequent years.   Sandy Bay has agreed, subject
to South African exchange control approval, to subscribe for 17,365 shares in
Firestone at a price of 57.5p, being the mid market price at close of business
on January 25, 1999, and to hold these shares for 12 months. 
 
 Eiland is considered to have excellent potential for the discovery of
economic deposits of diamond-bearing gravels.  Mining operations on De Beers'
property immediately to the north are reported to have produced large diamonds
of exceptional quality from marine terraces located close to the coast, and

Firestone's initial surveys of the property indicate that these terraces also
occur on Eiland.   Recent exploration work carried out by Sandy Bay has proved
the presence of diamondiferous gravels and, more importantly, that the ancient
Groen River entered the sea at a point immediately to the south of the
property, some 7 km south of the current river mouth.  This point is
considered to have been the source of the diamonds mined by De Beers to the
north of Eiland, as diamonds deposited in the ocean on the Namaqualand coast
are known to have been transported in a northerly direction by the prevailing
current.  
 
Bulk sampling on both marine and river gravel deposits on Eiland is scheduled
to begin in February, when earthmoving and gravel processing equipment will be
moved to the property from the Company's other operations in the Groen River
valley.
 
 Philip Kenny, Chief Executive of Firestone said:
 
"Eiland represents a very attractive opportunity for Firestone due to the
exceptional quality of diamonds recovered from De Beers' operations on their
adjoining property.  Firestone's experience in mining similar diamond-bearing
marine gravel deposits at the Avontuur Mine combined with the immediate
availability of staff and equipment in the Groen River valley will enable us
to evaluate the property rapidly and at low cost. We remain confident that we
will be able to develop commercial mining operations in the Groen River valley
in the coming year."
 
 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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