Firestone Diamonds
Firestone Diamonds plc is an international diamond mining and exploration company with operations in Botswana and South Africa, which are the world's largest and fourth largest producers of diamonds, respectively, and the lowest cost producers among major diamond producing countries. Firestone has extensive interests in Botswana, which produces over 34 million carats per annum, worth over $3.5 billion. Botswana is considered to be one of the top countries in the world to explore for kimberlite - the primary source rock for diamonds.
Firestone is the largest holder of exploration rights around the Orapa Mine, including the BK11 evaluation project, and around the Jwaneng mine. In addition, De Beers has entered into joint ventures with Firestone over some of Firestone's ground holdings in the Orapa and Jwaneng areas. The company also holds exploration rights over the entire Tsabong kimberlite field in south-west Botswana, which is one of the largest diamondiferous kimberlite fields in the world.
Firestone is also exploring for kimberlite in the US on the Laurentia craton, which extends into Canada, where it hosts a number of diamondiferous kimberlite deposits.
Firestone's mining operations include the Bonte Koe, Avontuur and Oena Mines, which are located on the west coast of South Africa, in Namaqualand. Namaqualand has been one of the world's largest alluvial diamond producing regions for the past 60 years, with total production to date estimated to be worth more than $3 billion. Firestone has entered into a mining joint venture with De Beers at the Bonte Koe Mine, which provides the company with guaranteed cash flow for processing gravel mined by De Beers in the area surrounding Bonte Koe.
Firestone Diamonds extends gains after interims report
Firestone Diamonds PLC remained in the limelight with its interim results statement out today, March 31, following two announcements over the last two trading days regarding good news from its opaerations in Botswana.
The company stayed in favour even though it reported a loss for the six months to end-December 2008, extending gains over the previous two sessions by a further 14 percent in midmorning trades.
Revenue for the period increased 92 percent to £3.7 million, but the rise was primarily due to the termination payment from De Beers in relation to the Bonte Koe mine. Stripping out the one-off item, revenue fell to £1.53 million from £1.9 million in the previous first half, impacted by the recent substantial fall in diamond prices.
“We continue to believe that the long term prospects for diamonds remain positive due to the projected significant long term shortfall in supply and that diamond prices will increase once again when the global economy begins to recover,” Firestone said.
It swung to a pretax loss of £1.26 million from a £2.8 million profit a year earlier, hit by impairment charges of £2.6 million related to its South African alluvial assets in the reported period.
Firestone reiterated it is very encouraged by drilling results at the BK11 kimberlite in Botswana. Development costs are estimated to be approximately US$7.5 million and production could commence in mid 2010 with an initial capacity of approximately 1.5 million tonnes per annum.
Contract negotiations for the Jwaneng tailings project are expected to be concluded by the third quarter of 2009.
While Firestone is at present focusing on more advanced projects that are closer to cash flow, such as BK11 and tailings treatment projects, it considers the Tsabong kimberlite field in Southern Botswana to be one of the most attractive large scale diamond exploration and evaluation projects in the market and is currently in joint venture talks for Tsabong. Firestone attracted substantial interest after announcing in December 2008 it is seeking a partner for the project, it added.
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Other Firestone Diamonds articles
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01/02/10 Firestone Diamonds: right place, right time, right pipe
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10/12/09 Firestone Diamonds expects BK11 kimberlite production to start ahead of schedule as resource and grades rise
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18/02/09 Firestone Diamonds: A big step closer to a hard rock diamond mine
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06/10/08 Firestone Diamonds ploughs ahead with kimberlite evaluation programs
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27/06/08 Firestone Diamonds - starting to sparkle?
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02/11/06 Firestone Diamonds gets Excited about Tsabong Kimberlites
Other Firestone Diamonds news
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15/03/10 Firestone Diamonds broadens Botswana based investment appeal with BSE listing
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12/03/10 Firestone Diamonds to operate FTP project for De Beers JV in Namibia
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28/01/10 Firestone Diamonds plans to evaluate kimberlites at Orapa in Botswana after historical data review
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21/01/10 Firestone Diamonds upbeat about BK11 diamond project in Botswana
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21/12/09 Firestone Diamonds acquires up to 85% interest in Orapa and Francistown kimberlite licenses in Botswana
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16/11/09 Evolution retains ‘buy’ rating for Firestone Diamonds, target price reduced due to Jwaneng delays
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13/11/09 Firestone Diamonds FY revenues rise 22%, talks over Jwaneng plant and kimberlites development in Orapa ongoing
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25/09/09 Firestone Diamond Makes Progress in Botswana, Key Developments Expected by Years End
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08/07/09 Firestone Diamonds raises £7.2 mln in placing, Botswana operations making progress
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30/03/09 Firestone Diamonds indentifies higher grade diamond zone at BK11 kimberlite