Firestone Diamonds (LON:FDI) has made what it called “good progress” at its Liqhobong mine in Lesotho, expecting production to recommence ahead of schedule in February 2011.
Investors welcomed the update, driving shares in the company up 4.5%.
Late last year, Firestone raised £13 million through an equity placing, enabling it to accelerate its plans to recommence and significantly expand production at the main pipe at Liqhobong.
Firestone has now completed detailed mine planning and scheduling and appointed a mining contractor and mobilised earthmoving equipment to site.
Mining will be initially focused on high grade K5 and K6 kimberlite units.
“We are pleased with the very rapid progress that we have made at Liqhobong, which we believe has the potential to be a highly profitable mining operation.
“Together with production from the BK11 mine and our extensive portfolio of kimberlites in Botswana, we believe that Firestone is now very well positioned to become a significant diamond producer and to reach its target of producing 1 million carats per annum by 2014,” said chief executive of Firestone Diamonds Philip Kenny.
Production plant 1 is set to be producing at a rate of 0.4 Mtpa (million tonnes per annum) in March 2011 with the capacity to be tripled to 1.3 mtpa by Q4 2011. The plant is expected to generate revenue of $43 million per annum at full capacity.
Work is continuing on specifications and design for Plant 2, with planned capacity of 4.2 mtpa and expected revenue of US$140 million per annum.
The main pipe hosts a resource of 91 million tonnes at an average grade of 34 carats per hundred tonnes containing 31 million carats.
Firestone has stated that with an average estimated diamond value of $98/carat and a contained value of approximately US$3 billion, Liqhobong is one of the most attractive undeveloped kimberlites in the world.
Firestone owns a 75% stake in Liqhobong.