5 Dec 2011 07:00
Firestone Diamonds plc
Diamond sale results
LONDON: 5 December 2011
Firestone Diamonds plc, ("Firestone" or "the Company"), the AIM-quoted diamond mining and exploration company (ticker: AIM:FDI), announces results from its fourth diamond sale of 2011.
HIGHLIGHTS
Results of tender
• | 47,576 carats sold for gross proceeds of $2.8 million |
• | All diamonds offered at the tender were sold |
• | Run of mine value of production from Liqhobong and BK11 estimated to be $95/carat and $180/carat, respectively |
Rough diamond market
• | Prices have fallen approximately 30% from their highs in July 2011 |
• | Some stability has returned to the market, with growing demand from China and India and shortfall in supply expected to support prices |
• | Prices for Liqhobong and BK11 production expected to increase in 2012 |
Tim Wilkes, CEO of Firestone Diamonds, commented "We are pleased to have been able to sell all of the diamond production offered at our recent tender, the results of which indicate that some stability has returned to the rough diamond market after the volatility of the past few months. We remain positive about the fundamentals of the diamond market, with long term demand, which is largely driven by growth in India and China, expected to continue to outstrip supply, and expect to see prices for both Liqhobong and BK11 production increase in 2012."
A total of 47,576 carats was sold for gross proceeds of $2.8 million. The diamonds sold were comprised of approximately 27,000 carats of new production from the Liqhobong Mine and the BK11 Mine, and approximately 20,000 carats, principally comprising smaller diamonds from both mines, that had been withdrawn from the previous diamond tender in September 2011. The number of buyers attending and interest in the tender was significantly higher than in September and back to the levels seen at the July tender.
All of the diamonds offered at the tender were sold, and results indicate that the value of run of mine production from Liqhobong and BK11 have dropped by about 30% from their highs in July 2011. This is in line with the Company's expectation, as indicated in the preliminary announcement of results for the year ended 30 June 2011 that was released on 14 November 2011 (the "Preliminary Announcement"). On this basis, the value of run of mine production from Liqhobong and BK11 are estimated to be $95/carat and $180 /carat.
As indicated in the Preliminary Announcement, the Company intends to announce a summary of results of both production and diamond sales on a quarterly basis. The next update, which will be for Q4 2011, will be provided in Q1 2012.
For further information, visit the Company's web site at www.firestonediamonds.com or contact:
Philip Kenny, Chairman, Firestone Diamonds Tim Wilkes, CEO, Firestone Diamonds
| +44 20 8741 7810/+44 7831 324 645 +27 78 457 6623/+267 713 77686 |
Rory Scott, Mirabaud Securities (Nominated Broker)
| +44 20 7878 3360 |
Robert Beenstock, Brewin Dolphin (Nominated Adviser)
| +44 20 7246 1000 |
Jos Simson / Emily Fenton, Tavistock Communications
| +44 20 7920 3150/+44 7899 870 450 |
Background information on Firestone Diamonds:
Firestone Diamonds plc is an international diamond mining and exploration company with operations focused on Lesotho and Botswana. Firestone operates the Liqhobong Mine in Lesotho and the BK11 Mine in Botswana. Firestone is also the largest holder of mineral rights in Botswana's diamondiferous kimberlite fields, controlling approximately 10,000 square kilometres around the major Orapa and Jwaneng mines and the entire Tsabong kimberlite field. In addition to Liqhobong and BK11, Firestone has 108 kimberlites in its portfolio, of which 30 have been proven to be diamondiferous.
Lesotho is emerging as one of Africa's significant new diamond producers, and hosts Gem Diamonds' Letseng Mine, Firestone's Liqhobong Mine as well as the Kao and Mothae development projects. 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.