21 Dec 2009 07:00
Firestone Diamonds plc
Botswana joint venture agreement signed
LONDON: 21 December, 2009
Firestone Diamonds plc, ("Firestone" or "the Company"), the AIM-quoted diamond mining and exploration company (ticker: AIM:FDI), is pleased to announce that it has entered into a joint venture agreement with Tawana Resources NL ("Tawana") over Tawana's kimberlite exploration and evaluation projects in Botswana, which includes 8 kimberlites in the Orapa kimberlite field. Under this agreement Firestone could earn up to an 85% interest in any kimberlites in the prospecting licences controlled by Tawana.
HIGHLIGHTS
Firestone to acquire an interest in Tawana's kimberlite projects in Botswana
Firestone can earn 70% by carrying costs for first stage bulk sampling
Tawana has option to fund its remaining 30% interest from that point
Firestone could earn an additional 15% by carrying costs to mine development decision if Tawana option is not exercised
Orapa prospecting licence
Contains 8 kimberlites and covers 57 square kilometres
Located close to Debswana's Damtshaa Mine
26 kilometres from Firestone's BK11 mine development project
Review of historical data due to be completed in January 2010
Francistown prospecting licences
Cover an area of 1,500 square kilometres
Located in the right geological setting for discovery of diamondiferous kimberlites
Review of historical data due to be completed in Q1 2010
Philip Kenny, CEO of Firestone Diamonds, commented: "With production from our planned new mine at BK11 due to commence in Q2 2010, we will be able to use the infrastructure at BK11 to develop and exploit economic potential at other satellite kimberlites in the Orapa area quickly and at relatively low cost. We are excited about the potential of Tawana's kimberlites in the Orapa area, which bring the total number of kimberlites in Firestone's portfolio in the Orapa area to 15, and look forward to updating our shareholders about the results of our initial review of the project in early 2010."
Orapa prospecting licence
The Orapa prospecting licence covers an area of 57 square kilometres in the Orapa kimberlite field and contains a cluster of 8 kimberlites, BK19-26. The largest of these kimberlites, BK24, is located 2.5 kilometres from Debswana's Damtshaa Mine and 26 kilometres from Firestone's BK11 kimberlite, which is due to commence commercial production in Q2 2010. The Company has commenced a review of the historical data available from work carried out by Tawana and other operators on BK19-26. This review is expected to be completed in January 2010."
Francistown prospecting licences
The Francistown prospecting licences cover an area of 1,500 square kilometres close to the town of Francistown in eastern Botswana. Although no kimberlites have been discovered in this area before now, the prospecting licences are located in the right geological setting for the discovery of diamondiferous kimberlites. The Company has also commenced a review of the historical data available from work carried out by Tawana and other operators in this area. This review is expected to be completed in Q1 2010.
Joint venture terms
Firestone can earn a 70% interest in any kimberlite by financing all evaluation work on that kimberlite up to the completion a bulk sample of a minimum of 150 tonnes from kimberlites less than 1 hectare in size, and of a minimum of 250 tonnes from kimberlites greater than 1 hectare in size. Tawana will then have an option to fund its pro-rata share of all further work on that kimberlite. If Tawana is unwilling or unable to exercise this option, Firestone will be entitled to earn an additional 15% by financing all further evaluation work up to and including the making of a mine development decision on that kimberlite. The agreement is subject to the approval of the Minister of Minerals, Energy & Water Resources.
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, Brewin Dolphin (Nominated Adviser) | +44 131 529 0276 |
| Jos Simson / Leesa Peters, Conduit PR | +44 20 7429 6603/+44 7899 870 450 |
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 95 kimberlites in its portfolio, of which 24 have been proven to be diamondiferous. Fifteen of Firestone's kimberlites are at the bulk sampling stage.
Notes:
1. The information in this statement has been reviewed by Mr. Tim Wilkes, BSc, Pr Sci Nat, who is a qualified person for the purposes of the AIM Guidance Note for Mining, Oil and Gas Companies. Mr. Wilkes is Chief Operating Officer of Firestone Diamonds plc and has over 27 years' experience in diamond exploration, mineral resource management and mining. Mr. Wilkes is a member of the sub-committee for diamonds of the South African Mineral Resource Committee (SAMREC).