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Firestone Diamonds (LON:FDI) today said it has made good progress in improving the quality and value of diamonds recovered from the Liqhobong mine, in Lesotho.
This comes after changes were made to reduce diamond breakages at the pilot plant.
It reported that several larger stones have since been recovered successfully in the past quarter, and further improvements are now expected in the short term. Higher grade rock from Liqhobong’s K5 area will now be processed, it explained.
"We are happy with the progress that we have made at the Pilot Plant in September which has continued into October, after overcoming technical and weather challenges in July and August,” said chief executive Tim Wilkes.
Firestone said that it successfully recovered three yellow stones weighing 27, 17 and 15 carats and three white stones weighing 12.4, 9.2, and 9.1 carats.
Wilkes explained that the amount of whiter stones recovered is encouraging.
“(This) should continue on an upward trend as the mine plan calls for more of the higher grade, larger stone bearing areas of the pit to be mined during the remainder of the year.”
Fairfax analyst John Meyer, in a note today, said he was expecting a continued improvement from Liqhobong.
“It is encouraging to see that changes to the pilot plant appear to be reducing breakages of larger stones,” the analyst said.
“Now that breakages are being better managed using a greater proportion of feed from the more weathered higher grade feed from K5 makes sense and should lead to better recoveries.”
Meyer also says he expects the upcoming diamond tenders to show that prices have stabilised.
Today’s statement comes ahead of two potential catalysts for Firestone.
It told investors that the next diamond tender will take place this month, in Gaborone and Antwerp.
Meanwhile the definitive feasibility study for Liqhobong’s main treatment plant is also expected this month.
“The DFS will decide the next stage for the company – we have factored in expansion capex of $150m but this may come in at a higher level.
“We will be also looking at how strip ratios will increase over time in the open pit which will impact operating costs and the economics of the mine.”