Firestone Diamonds plc (AIM: FDI) updated investors on their operations in Botswana. The African focused diamond exploration and mining company has two primary projects in Botswana, the BK11 and the Jwaneng tailings project.
Earlier this year Firestone announced that BK11 had an inferred resource of 12m tonnes containing approximately 830,000 carats with a revised modelled value of $135/carat.
At the BK11 project Firestone expect to make a key Mine development decision in Q4 2009, following the substantial progress being made by current bulk sampling work. Firestone has mined 250k tonnes since July and expects to reach the targeted 325k tonne milestone to complete the bulk sampling in October.
The location for the bulk sample trench was selected so as to intersect both the higher and lower grade kimberlite units that have been identified by large diameter drilling.
Performance of the mining equipment on site has been very good, with mining rates now averaging over 5,000 tonnes per day. This indicates that the target mining capacity of 1.5 million tonnes per annum is likely to be achievable with the Company's existing equipment.
Commissioning of the 25 tonne per hour pilot production plant was completed in July and the plant is now running continuously, with concentrate being transported to the Company's office in Gaborone for sorting and diamond recovery.
Much of the infrastructure that has been established to support the pilot production plant has been designed to support full scale mining operations which will reduce the time and cost of mine development.
Production at BK11 is expected to commence mid 2010, subject to the Mine development decision scheduled later this year.
In today’s announcement Firestone also updated investors on their other project in Botswana, the Jwaneng Tailings project. In February, Firestone was selected by Debswana Diamond company as their preferred bidder for a toll treatment contract.
Debswana is a joint venture between the Government of the Republic of Botswana and De Beers.
The Jwaneng plant is intended to demonstrate the economics and capability of the modular plant concept on the Jwaneng tailings resource. Under the agreement firestone will supply, construct and operate a modular tailings treatment plant at the Jwaneng Mine in Botswana.
The Jwaneng tailings resource is estimated to be in excess of 30m tonnes.
Firestone and Debswana have established a joint steering committee for the project to negotiate and agree detailed technical and commercial provisions for the project. Firestone state that negotiation is progressing with a number of interested lenders in relation to debt financing of the project through a special purpose vehicle.
Firestone expects to finalise the financing arrangements shortly after the Debswana agreement is signed in Q4 2009.
Firestone Diamonds CEO, Philip Kenny commented on his confidence in Firestone’s prospects in Botswana.
“With the Company fully financed to production at BK11, and with prices in the rough diamond market continuing to recover from their recent lows, we remain confident about Firestone's prospects.”