Firestone Diamonds (LON:FDI) has raised £13.5 million through a placing to advance its Liqhobong mine in Lesotho and activities in Botswana, it emerged.
The company placed 48.64 million new shares at 27.75 pence with institutional and other investors.
The placing price represents a middle market share price yesterday (July 27), said Firestone.
The firm said the cash would be used to accelerate work at the Lesotho mine, including a definitive feasibility study for the expansion of Plant 2.
The funds will also be used to complete connection to the power grid at the BK11 mine in Botswana, and for other working capital purposes.
Firestone's chief executive Tim Wilkes said he was very pleased to have received significant support from existing and new institutional shareholders for the cashcall.
"We have made significant progress at Liqhobong, with grades and diamond prices increasing substantially since production commenced in February 2011.
"In Botswana, we are pleased with the progress that we are making at the BK11 Mine and that we are now in a position to recommence evaluation activities on our portfolio of 174 kimberlites, which we believe has the potential for further economic discoveries."
Firestone Diamonds said it had decided to accelerate work on the Definitive feasibility Study (DFS) at Liqhobong and to begin work on the tailings dam and related infrastructure that will be required to support Plant 2.
Discussions are currently underway with a number of lenders in relation to debt financing for the construction of Plant 2. These discussions are expected to be finished shortly after the completion of the DFS, it said.
AT BK11, the company said following significant increases in liberation and grade of diamonds since July 2011, it has decided to connect the mine to the new power line being constructed by Botswana Power Corporation.
"It is expected that grid power will be available at BK11 in Q3 2011, which will result in both lower costs and improved production plant availability," added the company.
Over the past two years, the firm has concentrated on Liqhobong and BK11, and with both mines now in production Firestone will begin again its Botswana kimberlite programme.
This will initially focus on BK16, BK24 and other high interest kimberlites in the Orapa region in Botswana that can be evaluated and exploited using the infrastructure that the company has established at BK11, but will then be expanded in 2012 to include the high interest kimberlites identified at Kokong and Tsabong, it said.