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06/06/2011

Tim Wilkes at Firestone Diamonds says margins have grown substantially

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Additional Information
Market: AIM
Sector: General Mining - Diamonds & Gemstones
EPIC: FDI
Latest Price: 5.75p  (-2.21% Descending)
52-week High: 32.75p
52-week Low: 5.38p
Market Cap: 31.37M
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Firestone Diamonds
www.firestonediamonds.com

Firestone is a UK-based diamond mining and development company with assets located in Botswana and Lesotho. Firestone also controls a substantial portfolio of diamond exploration and development projects in the Orapa, Jwaneng and Tsabong regions of Botswana.

Full Firestone Diamonds profile here
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Firestone Diamonds' Shareholders approve Kopane Takeover

3rd Sep 2010, 3:35 pm Next Kopane’s shareholders will vote on the proposal, on Monday

Firestone Diamonds' (LON:FDI) takeover of Kopane Diamond Developments (LON:KDD) took another step forward this afternoon, after the company’s shareholders approved the deal.

At a general meeting in London, Firestone’s shareholders voted on the proposed acquisition, and the ‘Scheme of Arrangement’ - which sets out the terms of the share-based transaction - was duly passed.

On Monday 6th September, Kopane’s shareholders will vote on the proposal.

If the deal goes ahead, the enlarged company’s shares will be admitted to trading on the 30th September 2010.

In July, Firestone made a surprise bid for rival Kopane.

Kopane’s board had unanimously recommended the all-paper deal that valued the shares at 17 pence each, or £51 million - at the time of the bid.

This represented a 36 per cent premium to the previous day’s closing price.

The pair said the deal would give the enlarged group a more "diversified portfolio of production, development and exploration stage diamond projects".

Yesterday, the company's shares jumped over 15% following an upbeat statement, which highlighted that the company has made significant progress with the development of the BK11 kimberlite and production is ahead of schedule.

Following the Phase 1 commissioning in July, the BK11 plant is currently running with the average throughput of 185 tonnes per hour (tph), 23% ahead of the initial 150tph target, the company announced.

The mine began continuous operations at the beginning of August and diamond concentrates are now being shipped from BK11 to the diamond sorting facility in Gaborone.

Firestone described initial diamond recoveries as ‘very encouraging’ and highlighted the largest diamond recovery to date from BK11 - a high quality 13.74 carat diamond.

 

The find increases the raw value of diamonds from bulk sample excavation by 68% from $149/carat to over $250/carat, and as such Firestone expects a significant increase to BK11’s modelled value.

Based on the better-than-expected performance of the Phase 1 plant, Firestone believes it will comfortably exceeded BK11’s 1.5 million tonnes per annum (Mtpa) production target capacity once Phase 2 has been completed in Q4 2010.

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