30 Jun 2010 07:00
Firestone Diamonds plc
BK11 update
LONDON: 30 June, 2010
Firestone Diamonds plc, ("Firestone" or "the Company"), the AIM-quoted diamond mining and exploration company (ticker: AIM:FDI), is pleased to announce an update on development work and production plans at its BK11 kimberlite in Botswana.
HIGHLIGHTS
| • | Mine development decision made in December 2009 | |
|
|
|
|
| • | Construction of production plant on schedule | |
|
| - | Phase 1 complete and ready to commence production as soon as mining licence is issued |
|
| - | Phase 2 on schedule for completion in Q3 2010 |
|
|
|
|
| • | Mining licence application submitted in Q1 2010 | |
|
| - | All additional information requested by Department of Mines has been submitted |
|
| - | Mining licence expected to be issued imminently |
Philip Kenny, CEO of Firestone Diamonds, commented: "We have made significant progress at BK11 since April. The imminent expected commencement of production at BK11 is a major milestone for the Company as is it will make Firestone one of only three kimberlite producers worldwide outside of the major mining companies. The combination of cash flow from production at BK11, an extensive portfolio of kimberlites in the Orapa and Tsabong kimberlite fields and exciting toll treatment opportunities positions Firestone very well for significant growth in Botswana and with the substantial shortfall in rough diamond supply projected in the coming years we are confident about Firestone's future prospects. We look forward to further updating our shareholders very soon once the mining licence has been granted and production has commenced."
Background
Development work has been under way at BK11 since the successful completion of the final phase of evaluation work in December 2009. A mining licence application was completed and submitted to the Ministry of Minerals, Energy & Water Resources (the "Ministry") during Q1 2010 and in April 2010 the Company raised £9.45 million, of which approximately £4.5 million was to cover the final capital costs relating to the BK11 production plant and for pre-stripping of near-surface low grade kimberlite.
Production plant
Work on Phase 1 of the production plant, which has a capacity of approximately 650,000 tonnes per annum, has been completed and the plant is ready to commence production as soon as the mining licence is issued. Work on Phase 2 of the production plant, which will increase production capacity to 1,500,000 tonnes per annum, is on target for completion as originally scheduled in Q3 2010.
Mining licence
Since April 2010 the Company has been in discussions with the Department of Mines ("DoM"), which is the part of the Ministry that is responsible for assessing mining licence applications. The Company has provided additional information requested by the DoM and there are no further matters outstanding from the Company in relation to the BK11 mine development plan and mining licence application. The Company expects the mining licence to be issued imminently.
For further information, visit the Company's web site or contact:
| Philip Kenny, Firestone Diamonds
| +44 20 8834 1028/+44 7831 324 645 |
| Simon Edwards / Tim Redfern, Evolution Securities (Joint Broker)
| +44 20 7071 4330 / 4312 |
| Rory Scott, Mirabaud Securities (Joint Broker)
| +44 20 7878 3360 |
| Alexander Dewar / Neil McDonald, Brewin Dolphin Corporate Advisory & Broking (Nominated Adviser)
| +44 131 529 0276 |
| Emily Fenton / Leesa Peters, Conduit PR
| +44 20 7429 6608/+44 77885 54035 |
Background information on Firestone Diamonds:
Firestone Diamonds plc ("FDI.L") is an international diamond mining and exploration company with operations in Botswana and South Africa. Botswana is the world's largest and lowest cost producer of diamonds, with annual production worth over $2.5 billion, and is considered to be one of the most prospective countries in the world to explore for diamonds.
Firestone is the largest holder of mineral rights in Botswana's diamondiferous kimberlite fields, controlling over 25,000 square kilometres around the major Orapa and Jwaneng mines and the entire Tsabong kimberlite field. Firestone has 103 kimberlites in its portfolio, of which BK11 is about to commence production, and 29 others have been proven to be diamondiferous.