Firestone Diamonds PLC said it is continuing to pursue a number of significant new toll treatment opportunities after De Beers Consolidated Mines terminated the toll treatment joint venture at the Bonte Koe mine on the Buffels River.
De Beers paid Firestone £2.5 million compensation for early termination. De Beers decided to pull out of the venture after a review of its Namaqualand Mines operations in South Africa.
While Firestone has achieved all of the required throughput and operational targets since commencement of operations in 2006, a decrease in revenue received by De Beers from diamonds recovered and an increase in mining costs have resulted in De Beers deciding to suspend its Buffels River operations indefinitely, the company said.
Firestone's operations at Bonte Koe have now been suspended. The plant, which has a capacity of approximately 1.5 million tonnes per annum, would be suitable for use at the company's BK11 kimberlite project in Botswana, it said. This would substantially reduce the time and cost to develop a new mining operation at BK11 and also significantly improve the economics of the project. Firestone is currently making provisional plans to relocate the Bonte Koe plant and infrastructure to BK11, subject to results from bulk sampling which are expected to be available later this quarter.
Firestone chief executive Philip Kenny said: “We are continuing to pursue a number of significant new toll treatment opportunities and with our experience working for De Beers at Bonte Koe having proven that we have the capability to design, build and operate efficient, cost effective mining operations to a high standard, we are confident that we can continue to develop our toll treatment business.”