www.firestonediamonds.com
Firestone is a UK-based diamond mining and development company with assets located in Botswana and Lesotho. Firestone commenced production at the BK11 Mine in Botswana in July 2010 and plans to recommence production at the Liqhobong Mine in Lesotho 2011. Firestone also controls a substantial portfolio of diamond exploration and development projects in the Orapa, Jwaneng and Tsabong regions of Botswana.
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.
