FDI.L Regulatory News (FDI)

6 Oct 2008 07:00



Firestone Diamonds plc

Botswana operations update

LONDON: 6 October 2008

Firestone Diamonds plc, ("Firestone" or "the Company"), the AIM-quoted diamond mining and exploration company (ticker: AIM:FDI), today announces an update on evaluation work at its BK11, BK16 and  Tsabong projects in Botswana.

HIGHLIGHTS

BK11

Drilling and bulk sampling ahead of schedule; results expected Q4 2008

New diamond recovery facility constructed in Gaborone

Pilot plant construction on schedule

Significant progress made with scoping study

Mine development decision may be advanced from Q4 2009 to Q1 2009, with possible commencement of production in 2010

BK16

Drilling and bulk sampling to commence ahead of schedule in October 2008

Results expected Q1 2009

Tsabong

Bulk sample plant modifications completed on schedule in August 2008

Diamonds recovered from MK1 tailings audit; all tailings now being reprocessed

First macrodiamonds recovered from MK38; microdiamond analysis indicates potential grade of 25-30 cpht

LDD drilling completed on 4 other kimberlites

Work continues on other 79 kimberlites in the field

Philip Kenny, CEO of Firestone Diamonds, commented: "We have made excellent progress in Botswana over the past three months. In particular, we continue to be excited about BK11, where we believe we are close to confirming its economic potential. Our primary focus in the coming months is to complete evaluation work on BK11 as soon as possible, with the objective of accelerating a mine development decision to early 2009. Work at Tsabong is progressing well and we continue to believe that the prospects for identifying economic kimberlites in the area are good."

BK11

Substantial progress has been made at the BK11 kimberlite in the Orapa area, from which very good bulk sample results were reported in June 2008. BK11 is situated approximately 20 kilometres south east of Debswana's Orapa Mine and 5 kilometres north east of African Diamonds' AK6 kimberlite. Follow up drilling and bulk sampling is ahead of schedule. Since July 2008 fourteen core holes have been drilled for approximately 1,700 metres, with four holes remaining to be drilled. Approximately 1,000 tonnes of kimberlite will be recovered from large diameter drill ("LDD") drilling, with four 36 inch LDD holes completed and two holes remaining to be drilled.

Material from the LDD holes is currently being transported to the Company's bulk sample plant ("BSP") at Tsabong for processing. A new diamond recovery facility has also been constructed at the Company's offices in Gaborone and diamond concentrate from BK11 and other kimberlites will be transported from the BSP to this facility for sorting. Bulk sampling results are expected to be available in Q4 2008, and an independent valuation of diamonds recovered will be undertaken in Q1 2009. Work on the new BK11 pilot plant, which is being relocated to the Orapa area from the Company's Avontuur Mine in South Africa, is on schedule and the plant is expected to be operational in the first half of 2009.

Significant progress has been made on the scoping study for the development of a new mining operation to exploit BK11 and other kimberlites in the Orapa area. The Company is now evaluating the feasibility, subject to the results of the next stage of bulk sampling, of accelerating a development decision on BK11 from Q4 2009 to Q1 2009, which could allow first production from BK11 to commence in 2010 with an initial capacity of 1 million tonnes per annum.

BK16

The Company plans to carry out approximately 2,000 metres of core and 800 metres of LDD drilling on BK16, which is located 20 kilometres from BK11. This work is scheduled to commence ahead of schedule in October 2008 once drilling on BK11 has been completed. Results are expected to be available in Q1 2009.

Tsabong 

In June 2008 the Company announced that it planned to modify the BSP in order to enable it to process material with high clay and zircon content, such as from the MK1 kimberlite. Since June, independent audits have been undertaken on samples of tailings from MK1. These audits resulted in the recovery of nine macrodiamonds and confirmed that the BSP was not recovering all diamonds from the material being processed. The necessary modifications were completed on schedule in August 2008 and the BSP is now fully operational. Approximately 36 tonnes of tailings from MK1 are currently being reprocessed and results are expected to be available in Q4 2008.

A total of 55 microdiamonds have been recovered from a 214 kg core sample taken from the MK38 kimberlite.  Analysis of the size frequency distribution of the microdiamonds indicates a potential macrodiamond grade of 25 to 30 carats per hundred tonnes. It should be noted that this is a preliminary estimate, as between 200-400 microdiamonds are typically required to provide grade estimates with the necessary levels of confidence. A 60 tonne LDD sample is currently being processed, with three macrodiamonds recovered to date. Bigger LDD sampling is planned for MK38. 

LDD drilling has been completed on four other Tsabong kimberlites. This material has been processed through the BSP and the concentrate is in Gaborone awaiting sorting. Work is continuing on evaluation of the 79 other kimberlites in the field and exploration for new kimberlites.

Background information on Firestone Diamonds:

AIM quoted 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 29,000 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. Sixteen of Firestone's kimberlites are at the bulk sampling stage, of which BK11 is the most advanced. Firestone's mining operations in South Africa include a toll treatment operation in joint venture with De Beers at the Bonte Koe Mine.

Note: The information in this statement has been reviewed by Mr. Tim Wilkes, B Sc, 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).

For further information:

Visit the Company's web site at www.firestonediamonds.com, or contact:

  Firestone Diamonds

Philip Kenny +44 20 8834 1028 / +44 7831 324 645

Conduit PR

Gareth Tredway, Jos Simson +44 20 7429 6603 / +44 7899 870 450

Canaccord Adams (Joint Broker)

Mike Jones/Ryan Gaffney, +44 20 7050 6500

Blue Oar (Joint Broker)

Jerry Keen, +44 20 7448 4492 / +44 777 069 7358

Brewin Dolphin (Nominated Adviser)

Alexander Dewar / Sandy Fraser +44 141 221 7733 / +44 131 225 2566