Proactiveinvestors United Kingdom Firestone Diamonds Proactiveinvestors United Kingdom Firestone Diamonds RSS feed en Mon, 22 Jul 2019 15:07:11 +0100 Genera CMS (Proactiveinvestors) (Proactiveinvestors) <![CDATA[RNS press release - Board Changes ]]> Mon, 22 Jul 2019 07:00:06 +0100 <![CDATA[News - Firestone Diamonds recovers "fancy yellow" stone from Lesotho mine ]]> Firestone Diamonds PLC (LON:FDI) said it had recovered what it described as a an “intense fancy yellow sawable” diamond from its Liqhobong Mine in Lesotho.

At 54 carats, it is expected to curry a great deal of interest when it goes on sale in September.

Fancy intense yellow and fancy vivid yellow diamonds tend to cost more than colourless stones because of their rarity.

Last year Dominion Diamond Mines unearthed a 552-carat yellow diamond from its Diavik Diamond Mine in Canada.

De Beers & Tiffany

Among the world's largest of this ilk is the 440-carat light-yellow diamond that was found by De Beers in 1888 and later cut into a 235-carat cushion-cut stone. 

The Tiffany Yellow Diamond is also ranks up there. It weighted 287 carats in the rough when it was found in 1878 in the Kimberly Mine in South Africa.

Of his company’s discovery, Firestone chief Paul Bosma said: "The Liqhobong mine has become known for its fancy yellow stones but this one is the largest we've recovered so far and is therefore quite special.

“Although certain segments of the diamond market are currently struggling, the demand for unique natural stones remains positive."

Mon, 08 Jul 2019 07:54:00 +0100
<![CDATA[RNS press release - Recovery of 54 Carat Fancy Yellow Diamond ]]> Mon, 08 Jul 2019 07:00:05 +0100 <![CDATA[RNS press release - Bank and Bondholder Support for Covenant Waiver ]]> Mon, 01 Jul 2019 12:16:34 +0100 <![CDATA[RNS press release - Board Changes ]]> Tue, 30 Apr 2019 09:01:35 +0100 <![CDATA[RNS press release - Quarterly Update on Operations ]]> Thu, 25 Apr 2019 07:00:05 +0100 <![CDATA[RNS press release - Issue of Shares re: Eurobond ]]> Mon, 15 Apr 2019 11:49:08 +0100 <![CDATA[News - Firestone Diamonds sparkles as miner digs up 72 carat yellow diamond at its Liqhobong Mine in Lesotho ]]> Firestone Diamonds PLC (LON:FDI) shares sparkled on Monday after the miner revealed it dug up a 72 carat yellow, whole stone diamond at its Liqhobong Mine in Lesotho over the weekend.

In a statement, the AIM-listed group said the makeable yellow diamond was recovered together with a 22 carat makeable white stone, and an 11 carat fancy light-pink stone.

READ: An uptick in global prices could turn Firestone Diamonds into a significant cash cow

The company said the diamonds will go on sale at the next tender which is scheduled to take place during May 2019, adding that further details of the sale will be included in its fourth-quarter production update.

Firestone noted that this is the second stone of around 70 carat recovered from the operation this calendar year, following the 70 carat white, makeable which was sold in a March auction at a record overall price for a Liqhobong diamond.

Paul Bosma, Firestone’s chief executive officer, commented: "It was a good weekend for us, recovering the 72 carat diamond as well as the two smaller, high-quality stones from within the northern, lower grade part of the pit. These recoveries will certainly assist in supporting the average value of the next sale in May."

In late afternoon trading, Firestone shares were 4.9% higher at 2.15p.

Mon, 08 Apr 2019 15:42:00 +0100
<![CDATA[RNS press release - Recovery Of 72 Carat Yellow Diamond ]]> Mon, 08 Apr 2019 07:00:06 +0100 <![CDATA[News - An uptick in global prices could turn Firestone Diamonds into a significant cash cow ]]> It’ll take just a small uptick in diamond prices for the margins of Firestone Diamonds PLC (LON:FDI) to balloon out and provide the company with some very substantial cash flow.

As it stands, Firestone is modelling production from its Liqhobong project in Lesotho as likely to realise US$75 per carat, which is supported by current diamond market conditions.

But if the price were to increase by just, say, US$10 per carat on average, then the difference would be marked.

“The cash left and the end of the life of the mine,” says Firestone’s chief executive Paul Bosma, “would be double.”

So the question then becomes, how likely is such an uptick in the diamond market?

Weaker demand?

It’s a tricky one to generalise since diamonds are generally sold at the tender and each individual parcel commands a unique price. But there are some clear trends that can be discerned, not least by reading the market commentary of bigger players like De Beers and Alrosa.

De Beers’ most recent sight wasn’t exactly encouraging, as the company that once completely controlled the price itself, was able to book just US$490mln in revenue, the lowest for several years. De Beers blamed weak demand for lower value stones as fears of global trade war dented demand in China and a depreciation of the value of the rupee in India kept buyers at home there.

So it’s not just Firestone that’s finding it challenging. The big boys are too.

Future price gains?

But if the immediate outlook offers scant comfort, the next couple of years present a very different picture. For one thing, the current oversupply in smaller stones is likely to be significantly curtailed as production from Rio Tinto’s Argyll mine draws to an end. Argyll is slated to come offline within the next two years, and its absence will make it harder for buyers to find the small stones known as the minus three grainers.

But guess who has plenty of those in its mine? That’s right, Firestone Diamonds.

So that’s one ray of sunshine on the horizon.

Another is that the global trade war looks to be drawing to a close. While nothing’s yet been signed, both President Trump and the Chinese President Xi Jinping have been making positive noises about reaching an accommodation. Both sides may be chivvied along by the recent inversion of US government bond yields, as it’s becoming increasingly clear that both the US and China have everything to gain by reaching an accommodation.

“In the foreseeable future there will definitely be a decline in supply,” says Bosma.

And he contrasts that with the likely increase in demand. According to Bosma, the world market for luxury goods items amounts to approximately €1.2tn, of which 7% or €84bn is accounted for by diamond jewellery demand.

So these are huge sums, and likely to rise, given the unequal geographical spread of current demand. Around 50% of demand comes from the US, with only 16% from China and 6% from India. And as prosperity in both China and India continues to rise, so demand for diamonds will too.

And Bosma follows that up with another intriguing thought.

Wedding market

Around a third of the global population are now millennials, he says. And these millennials are all starting to get married.

The fundamentals, therefore, have a great deal to offer a Firestone optimist.

While it’s true that Liqhobong hasn’t quite lived up to initial expectations in terms of dollars per carat realised or the frequency of its large stones, the company’s production is running well and the plant is exceeding nameplate capacity.

With supportive shareholders RCF and Pacific Road holding sizeable chunks of stock, the future looks fairly secure, particularly if the diamond price starts to improve.

Added to that, there’s always the possibility of a round of consolidation amongst the Lesotho diamond operators, given that there are as many companies there as there are mines.

Firestone’s weak share price might tend to make it a target, were it not for those big supportive shareholder blocks. So it’s possible instead that some sort of more creative deal might get done. Watch this space.



Fri, 29 Mar 2019 10:14:00 +0000
<![CDATA[RNS press release - Unaudited results for six months to 31 Dec 2018 ]]> Thu, 28 Mar 2019 07:00:02 +0000 <![CDATA[Media files - Improvement in diamond market could deliver significant margin uplift for Firestone Diamonds ]]> Wed, 20 Mar 2019 13:09:00 +0000 <![CDATA[News - Unpacking the diamond market with the 3Cs, and other short-hand tricks to understanding value ]]> In February 2019, Firestone Diamonds PLC (LON:FDI) discovered a 70-carat diamond at its Liqhobong mine in Lesotho.

Liqhobong has yielded several large diamonds for Firestone in recent years, most recently a 46-carat stone unearthed in December and sold for just over US$1mln.

There’s clearly big money in larger stones and Firestone’s chief executive Paul Bosma was keen to underline the point.

“Although the market for smaller stones has been under pressure,” he said after the 70-carat discovery, “we’ve seen continued demand and good prices realised for special stones.”

Well and good – it seemed Firestone would realise at least US$1mln from its new stone, bearing in mind the price received for the smaller stone, and especially considering it was mined undamaged. But precisely how much it was likely to get remained an open question.

And just how exactly is the non-specialist investor supposed to know what the real implications of such a find are?

Here we unpack a few of the basics in putting valuations on diamonds and diamond mining companies, especially if they are trumpeting a particularly valuable find.

Diamond mines come in all shapes and sizes

Diamond mines come in different shapes and sizes. Diamonds are formed inside a rock known as kimberlite, named after the town of Kimberley in central South Africa. It was here that the South African diamond boom began with the discovery of an 85.5 carat stone known as the Star of South Africa in 1869.

This sparked a rush of miners into the area, and the creation of what became known as the Big Hole, a giant hole dug vertically into the ground that’s still visible today. The rock that the old timers were going through was unknown at that time, and so they dubbed it kimberlite, and it’s a rock type that remains central to diamond exploration to this day. 

Typically the richest kimberlites form in the shape of a pipe, as kimberlitic magma pushes its way up through fissures, in what’s known as an intrusion. Kimberlite pipes are the world’s richest source of diamonds and occur in only a few select areas of the world – most notably in South Africa and Botswana, in Russia and in Canada. Geologists are still searching for the ultimate source of diamonds found in Brazil and India, but as yet with no luck.

For complicated geological reasons to do with the actual formation of the rock, not all kimberlites are diamondiferous. And the ones that are might not necessarily be economic to mine. But while those caveats apply to those companies in the early stages of exploration, it’s also true to say that the world’s richest diamonds mines, with one or two exceptions, are based around kimberlite pipes.

Of course, diamonds and geological time sometimes interact in surprising ways.

The surrounding kimberlite can get eroded, separating out the diamonds, particularly if there is an ancient watercourse in the area. In such cases, the diamonds are often transported in river streams and mixed in with other pebbles and silt. These are what are known as alluvial diamonds, and the effects of geological time can be so powerful that connecting them back up to the source may be ultimately impossible.

Alluvial diamonds are found in all the major diamond producing regions of the world, and in a few areas where kimberlites are unknown. The most famous example of this is the Marange deposit in Zimbabwe, one of the world’s richest alluvial deposits, and the subject of much fighting and conflict in recent years.

A secondary source of diamonds is the dyke. Usually, these are formed when the upward thrust of the molten kimberlite is hindered in some way and the magma splinters out laterally in smaller streams. These dykes can be equally diamondiferous, but the erratic nature of their formation means they can be extremely difficult to mine effectively.

Analysts’ models: art or a science?

It’s somewhat paradoxical that the scientific modelling of mines and future mines by analysts always involves a significant number of assumptions. For a start, analysts always build in price assumptions that are based on educated forecasts, but which can never properly take into account sentiment or a wider shift in the global economic backdrop. As Firestone Diamonds chief Paul Bosma said on the discovery of that 70 carat stone, the prevailing market for small stones was weaker, while pricing for larger stones remained strong.

The world of pricing diamonds is nuanced and subtle and hard to predict. In the old days, before about the year 2000, there existed a massive stockpile held by De Beers, the world’s number one diamond miner and the onetime owner of the Big Hole that got dug at Kimberly after 1869. That stockpile was used to manipulate and control prices, but it’s gone now. Instead, the international diamond market now relies on an aggregation of prices achieved at tenders all round the world in order to get an idea of how much stones are worth in any given month.

The tendering system involves packaging up parcels of stones and then offering them out to buyers for tender. The buyers put their bids in in secret, and the highest bid wins. It’s simple, except that this type of sale only encompasses mid-sized and smaller stones, which are sold together, in parcels, and thus it’s hard to establish a precise value for any particular stone. Larger stones get priced individually at auction, and the market there is even harder to predict, because there isn’t always a Richard Burton around looking to impress an Elizabeth Taylor.


The three Cs: carat, cut, clarity


So, it’s only when you reach the retail level that the value of diamonds really becomes clear. Here, the traditional valuation tool of the three Cs holds as good as it ever did.

First, carat. The bigger it is, the more valuable, allowing that required parameters of the two other Cs are also met.

Second, cut. The art of the diamond cutter, honed in particular in Antwerp and Bombay, is key. The better the cut the greater the lustre, and the greater the value. But there’s also another factor. The most skilled cutters will ensure that the maximum amount of stone is retained, and that the off-cuts are kept to a minimum. This takes us back to the first of the Cs, and ensures that the amount of carats in a stone is as high as possible.

Third, colour. This is subjective to some degree, since in the case of larger stones, the market often pays top dollar for exotic pinks or blues. Nevertheless, at the mid-to-smaller end of the range, the clearer a diamond is, the better value it will attain. The industry jargon for an opaque or imperfect stone is “occluded”, and discounting can be heavy if the depth and extent of the impurity is marked. Having said that, most diamonds are imperfect, so impurity is not necessarily considered a deal-breaker.


A big diamond isn't necessarily a buy signal


Every diamond company likes to trumpet its larger finds, in part because it reassures investors that cash flow will be healthy, and in part too because it serves as a way of promoting companies and projects generally.

Petra Diamonds LTD (LON:PDL) has proved itself particularly adept at this over the past few years, marketing itself on the back of several large stones to an effective degree. However, investors should be wary of reading too much into the discovery of these stones. In most cases the potential discovery of large stones form part of a company’s internal modelling, since the ratio of large stones to smaller ones, though small, can often be fairly consistent in a kimberlite pipe.

Tim Read, formerly a director of Kopane Diamonds, which was taken over by Firestone, used to put it like this. “Once you get on the bus route, you don’t necessarily know when the buses are going to come, but you know that they will, and with relative frequency.”

And that means that companies, professional investors and analysts alike have usually built in the discovery of large stones into their plans and models. When large stones do turn up, it’s a payday for the PR companies, but its also part and parcel of the business of diamond mining.


Key considerations when assessing diamond companies


Grade, measured in carats per hundred tonnes Types of deposit - kimberlite, dyke or alluvial? Types of stone on offer State of the wider diamond market




Wed, 13 Feb 2019 11:29:00 +0000
<![CDATA[News - Firestone Diamonds delights with a 70-carat whopper ]]> Firestone Diamonds PLC (LON:FDI) has recovered a 70-carat white diamond from its Liqhobong Mine in Lesotho.

A 46-carat stone it found in December recently sold for more than US$1mln.

The latest diamond, which was undamaged, will go on auction in March.

Chief executive Paul Bosma said: "The 70-carat stone was recovered in the northern, low-grade part of the pit where the bulk of our mining will take place in the coming months.

“Although the market for the smaller stones has been under pressure, we've seen continued demand and good prices realised for special stones.”

In production update last week the company said it saw a quarter-on-quarter drop-off in recoveries as it raked in 224,947 carats in the last full three month period versus 240,733 carats. However, it is sticking with its guidance for the full year of 820-870,000 carats.

The overall grade was 25.4 carats per hundred tonnes of ore.

Tue, 12 Feb 2019 07:52:00 +0000
<![CDATA[RNS press release - Recovery of 70 Carat White Gem Diamond ]]> Tue, 12 Feb 2019 07:00:04 +0000 <![CDATA[RNS press release - Quarterly Update on Operations ]]> Mon, 04 Feb 2019 07:00:05 +0000 <![CDATA[RNS press release - Issue of Shares re: Eurobond ]]> Fri, 11 Jan 2019 15:32:09 +0000 <![CDATA[RNS press release - Update on Option Agreement for Botswana operations ]]> Tue, 18 Dec 2018 14:59:11 +0000 <![CDATA[News - Firestone Diamond unearths 46 carat white diamond at Liqhobong mine ]]> Firestone Diamond Plc (LON:FDI) told investors it has unearthed a 46-carat white diamond from its Liqhobong Mine in Lesotho.

The stone was recovered undamaged and will go on sale at the end of January 2019, the company said in a statement.

READ: Firestone Diamonds reports strong start to quarter at Liqhobong mine

Also, Firestone highlighted a stabilisation in diamond prices for smaller, lower value stones at a recent sale, earlier this month. The company noted that this confirms the trend reported by other producers.

"The recovery of the white 46 carat stone is good news as we start mining across the pit towards the northern side of the orebody over the coming months,” said Paul Bosma, Firestone chief executive.

“We are also pleased by the fact that the prices of our smaller, lower value goods have stabilised and we look forward to further improvement as we head into the new year on the back of an expected positive diamond jewellery retail season."

Fri, 14 Dec 2018 08:41:00 +0000
<![CDATA[RNS press release - Recovery of 46 carat white gem diamond ]]> Fri, 14 Dec 2018 07:00:02 +0000 <![CDATA[RNS press release - Results of AGM ]]> Wed, 28 Nov 2018 11:40:17 +0000 <![CDATA[News - Firestone Diamonds reports strong start to second quarter at flagship Liqhobong mine ]]> Firestone Diamonds PLC (LON:FDI) shares sparkled on Monday after saying its majority-owned Liqhobong Diamond Mine in Lesotho had a strong start to the second quarter after selling its third most valuable stone to date. 

In the second sale of the 2019 financial year, the diamond miner sold a total of 102,835 carats for US$8.2mln on October 26.

Firestone sold a 68-carat white diamond, the third most valuable stone sold to date for just under US$10mln, and a 20-carat yellow diamond. It also recovered a 326-carat near-gem diamond - the largest to date at Liqhobong.

READ: Firestone Diamonds recovers largest diamond from its flagship Liqhobong mine in Lesotho

The average value realised of diamonds was US$79 per carat.

In the first quarter ended September 30, 194,206 carats were sold for US$13.5mln in the first sale of the 2019 fiscal year, compared to 261,985 carats for US$18.6mln in the fourth quarter of 2018.

The average value of carats in the first quarter was US$70 each, which was lower than expected due to a deterioration in prices received for the smaller, lower value run of mine (ROM) stones.

Firestone recovered 240,733 carats recovered at a grade of 23.8 carats per hundred tonnes (cpht) in the first quarter, down from 263,512 carats at a grade of 25.7 cpht the previous three months. The group treated 1.01mln tonnes of ore, compared to 1.02mln tonnes in the fourth quarter.

The company ended the first quarter with net cash of US$25.7mln, down from US$27.8mln at the end of the fourth quarter.

“We held one sale during the quarter which was impacted by lower average values realised for the smaller, lower quality ROM stones,” said chief executive Paul Bosma.

He added: “We completed our second sale of the financial year post the quarter end, and pleasingly, the strong demand for our special stones offset the continued pricing pressure on the ROM stones, resulting in an improved average value realised of US$79 per carat.

"During October we also recovered our largest stone to date, a 326-carat near-gem diamond which provides further evidence of Liqhobong's large stone potential and importantly, the ability of the treatment plant to recover larger stones intact."

Shares rose 2.7% to 4.5p in morning trading. 

Mon, 29 Oct 2018 08:29:00 +0000
<![CDATA[RNS press release - Quarterly Update on Operations ]]> Mon, 29 Oct 2018 07:00:05 +0000 <![CDATA[RNS press release - Issue of shares re: Eurobond ]]> Thu, 25 Oct 2018 16:04:17 +0100 <![CDATA[RNS press release - Final results for the year ended 30 June 2018 ]]> Fri, 28 Sep 2018 07:00:08 +0100 <![CDATA[RNS press release - Issue of shares re: Eurobond ]]> Thu, 02 Aug 2018 16:48:46 +0100 <![CDATA[RNS press release - Quarterly Update and Guidance for FY 2019 ]]> Mon, 23 Jul 2018 07:00:06 +0100 <![CDATA[RNS press release - Board Appointment ]]> Thu, 12 Jul 2018 07:00:06 +0100 <![CDATA[RNS press release - Holding(s) in Company ]]> Fri, 06 Jul 2018 07:16:51 +0100 <![CDATA[RNS press release - Board changes ]]> Thu, 05 Jul 2018 07:00:07 +0100 <![CDATA[RNS press release - Appointment of CEO ]]> Mon, 14 May 2018 07:00:10 +0100 <![CDATA[RNS press release - Quarterly Update on Operations ]]> Thu, 19 Apr 2018 07:00:31 +0100 <![CDATA[RNS press release - Issue of shares ]]> Tue, 17 Apr 2018 11:27:29 +0100 <![CDATA[RNS press release - Half-year Report ]]> Tue, 27 Mar 2018 07:00:05 +0100 <![CDATA[RNS press release - Issue of Equity ]]> Fri, 19 Jan 2018 12:22:55 +0000 <![CDATA[RNS press release - Quarterly Update on Operations ]]> Wed, 17 Jan 2018 07:00:03 +0000 <![CDATA[RNS press release - Holding(s) in Company ]]> Wed, 10 Jan 2018 08:04:53 +0000 <![CDATA[RNS press release - Result of AGM ]]> Fri, 29 Dec 2017 12:27:04 +0000 <![CDATA[RNS press release - Holding(s) in Company ]]> Thu, 28 Dec 2017 14:09:18 +0000 <![CDATA[RNS press release - Results of General Meeting and Open Offer ]]> Wed, 20 Dec 2017 12:17:48 +0000 <![CDATA[RNS press release - Sale of BK11 Asset - Extension of Option Period ]]> Wed, 20 Dec 2017 07:00:03 +0000 <![CDATA[RNS press release - Results of Firm Placing & Placing, Notice of GM ]]> Fri, 01 Dec 2017 10:22:35 +0000 <![CDATA[RNS press release - Firm Placing, Placing and Open Offer, etc ]]> Fri, 01 Dec 2017 07:01:01 +0000 <![CDATA[RNS press release - Final Results ]]> Fri, 01 Dec 2017 07:00:07 +0000 <![CDATA[RNS press release - Quarterly Update on Operations ]]> Mon, 23 Oct 2017 07:00:03 +0100 <![CDATA[RNS press release - Issue of shares ]]> Tue, 17 Oct 2017 07:00:03 +0100 <![CDATA[RNS press release - Change of Adviser ]]> Mon, 09 Oct 2017 07:00:05 +0100 <![CDATA[RNS press release - Recovery of 134 carat gem-quality diamond ]]> Tue, 03 Oct 2017 07:00:02 +0100 <![CDATA[RNS press release - Diamond Sales Results and Operational Update ]]> Fri, 29 Sep 2017 07:00:07 +0100 <![CDATA[RNS press release - ABSA Debt Facility Update ]]> Wed, 06 Sep 2017 07:00:05 +0100