FDI.L Regulatory News (FDI)

3 Feb 2005 07:00

Firestone Diamonds PLC03 February 2005 Firestone Diamonds discovers three new kimberlites at Orapa Project in Botswana Drilling programme under way at Orapa and Mopipi Projects Three kimberlites discovered on first four targets drilled Substantial new areas applied for near Orapa and Jwaneng mines LONDON: 3 February, 2005 Firestone Diamonds plc ("Firestone" or the "Company") is pleased to announce thediscovery of three new kimberlites during drilling at its Orapa kimberliteexploration project in Botswana. Firestone's Orapa and Mopipi Projects cover a total area of approximately 4,900square kilometers. The two projects surround the Letlhakane Mine and adjoin thesouthern and western boundaries of the Orapa Mine, which is the second largestdiamond mine in the world in terms of carat production, producing approximately16 million carats per annum with a value of over $800 million. Firestoneentered into two separate joint ventures with De Beers over the Orapa and MopipiProjects in 2004. An intensive exploration and evaluation work programme is under way in the twoproject areas and over 51,000 line kilometres of high-resolution airbornemagnetic, ground gravity and ground magnetic surveys have been conducted todate. Data from these surveys is currently being reviewed along with data fromprevious exploration in the area, and by the end of 2004, 62 targets had alreadybeen identified for drilling in the Orapa Project area and 118 targets in theMopipi Project area. Kimberlite Discoveries Drilling commenced at the end of 2004 and the first four exploration drill holeshave been completed, resulting in the discovery of three new kimberlites.These kimberlites are located in the Orapa Project area, approximately 15kilometres south of the Orapa Mine, and are the first new kimberlites discoveredin the Orapa region in the last seven years. Although initial evaluation ofmaterial recovered from drilling is still being carried out, two of thekimberlites are located under only ten metres of overburden, which willfacilitate bulk sampling of the kimberlites, should that be warranted by theresults of the evaluation. The discovery of three new kimberlites is very significant, particularly giventhe fact that more than 10% of the 75 known kimberlites in the Orapa region areeconomic. With a further 176 targets still to be investigated, the Companybelieves that it is likely that more kimberlites will be discovered as drillingcontinues in the coming months, and that the prospects for new economicdiscoveries have improved substantially as a result of the new discoveries. All the material recovered from drilling of the kimberlites has been dispatchedto De Beers' laboratories in Johannesburg for processing to recover kimberliticindicator minerals and microdiamonds. Microprobe analysis of the kimberliticindicator minerals and analysis of the size/distribution frequency of themicrodiamond populations will allow an initial evaluation of the economicpotential of the kimberlites to be made. Petrographic studies will also becarried out on core samples recovered from each kimberlite. Detailed highresolution ground geophysical surveys will also be conducted over thekimberlites to provide an initial estimate of their size. If the results ofthis work are positive, bulk sampling will be carried out by large diameterdrilling in order to allow a preliminary estimate of grade and diamond value tobe made. Philip Kenny, CEO of Firestone Diamonds, said today: "Firestone's work in theregion over the past seven years had led us to believe that more kimberliteswould be discovered around Orapa, and that has now been proven to be the case.These new discoveries are highly significant, and represent the breakthroughthat we have been waiting for in the area. To identify three new kimberliteswith our first four exploration drill holes is an exceptional result by anystandard, and is testament to the technical expertise and financial resourcesthat are being applied to these projects by De Beers. With many targetsremaining to be drilled, we are confident that we will discover more kimberlitesin the coming months. As work continues, we believe that the Orapa and MopipiProjects have the potential to develop into some of the most exciting kimberliteexploration projects in the world." Details of the new kimberlite discoveries are as follows: Kimberlite X765 Drill target X765 is located 15 kilometres south of the Orapa Mine. Kimberlitewas encountered at a depth of 65 metres, beneath a cover of Kalahari sands,Kalahari calcrete and Karoo basalt. The hole was terminated in kimberlite at adepth of 134 metres. Kimberlite X777 Drill target X777 is located 2.5 kilometres south east of target X765.Kimberlite was encountered at a depth of ten metres, beneath a cover of Kalaharisands and Kalahari calcrete. The hole remained in kimberlite to a depth of 152metres, where it entered Karoo sandstone. The hole was terminated in Karoosandstone at a depth of 162 metres. Kimberlite X776 Drill target X776 is located 350 metres south east of target X777. Kimberlitewas encountered at a depth of ten metres, beneath a cover of Kalahari sands andKalahari calcrete. The hole remained in kimberlite to a depth of 129 metres,where it entered Karoo sandstone. The hole was terminated in Karoo sandstone ata depth of 150 metres. New Applications Firestone is the largest holder of diamond exploration rights in the Oraparegion, and is the only significant holder of diamond exploration rights, otherthan De Beers, in the Jwaneng region. All of Firestone's current interests inthe Orapa and Jwaneng areas are being explored in joint venture with De Beers.Much of the region around the Orapa and Jwaneng mines is still considered to behighly prospective for the discovery of new diamondiferous kimberlites, asmodern geophysical and other exploration techniques have not been fully appliedin these areas. On this basis, the Company has decided to significantly expand its licenceinterests in these areas. Applications have been submitted for areas coveringapproximately 9,400 square kilometers in the Orapa region, and coveringapproximately 2,900 square kilometers in the Jwaneng region. If theseapplications are successful, Firestone's prospecting licence interests willincrease to 14,300 and 6,600 square kilometers in the Orapa and Jwaneng regions,respectively, giving the Company a very significant strategic land position inthese highly prospective areas. For further information: Philip Kenny, Firestone Diamonds: +44 20 7370 6452/+44 7831 324 645Leesa Peters,Conduit PR: +44 20 7618 8707/+44 7812 159 885Jamie Cumming, Bell Lawrie White: +44 141 314 8103/+44 776 8044 620 Website: www.firestonediamonds.com Background information: BotswanaBotswana is the world's largest producer of diamonds, with annual production ofapproximately 30 million carats, worth over $2.5 billion and accounting for over25% of worldwide production by value. Botswana hosts Debswana's Jwaneng, Orapa,Letlhakane, and Damtshaa mines and is considered to be one of the best countriesin the world to explore for kimberlite - the primary source rock for diamonds.Debswana is owned in equal shares by the Botswana Government and De Beers. Firestone DiamondsFirestone has extensive diamond exploration interests in Botswana, as follows: • The Orapa Project covers an area of approximately 1,300 square kilometers and is located close to the Orapa and Letlhakane diamond mines. • The Mopipi Project covers an area of approximately 3,600 square kilometers and is located close to the Orapa and Letlhakane diamond mines. • The Jwaneng Project covers an area of approximately 3,700 square kilometers and is located close to the Jwaneng Mine. Firestone entered into separate joint ventures with De Beers over all three ofthese projects in 2004. Under the terms of the joint venture agreements, DeBeers can earn a 61% interest in each project by financing and carrying out allexploration and evaluation work, up to and including the completion of bankablefeasibility studies on any kimberlites discovered in the project area. Firestone is also active in the Namaqualand region of South Africa, one of themost prolific alluvial diamond producing regions in the world, where theCompany's Bonte Koe, Avontuur and Oena mines are located. The Company hasextensive exploration properties in Namaqualand, including the Groen RiverValley exploration project. Firestone also has a large scale kimberliteexploration project in the United States, and in 2004 the Company entered into ajoint venture with American Diamonds, which is in the process of earning a 60%interest in the project. Firestone is quoted on the London Stock Exchange's Alternative Investment Market(AIM). This information is provided by RNS The company news service from the London Stock Exchange