FDI.L Regulatory News (FDI)

25 Feb 2008 07:00

Firestone Diamonds PLC25 February 2008 Firestone Diamonds plc Encouraging results from MK1 kimberlite, Tsabong LONDON: 25 February 2008 Firestone Diamonds plc, ("Firestone" or "the Company"), the AIM-quoted diamondmining and exploration company (ticker: AIM:FDI), today announces an update onevaluation work on the MK1 kimberlite at its Tsabong project in Botswana. TheTsabong kimberlite field contains 83 kimberlites, including the 180 hectare MK1kimberlite, which is one of the largest diamondiferous kimberlites in the world. HIGHLIGHTS • Positive microdiamond samples from first core hole indicate potential for significant mineralisation • Initial grade estimate of 20 carats per hundred tonnes • Preliminary volumetric modeling indicates 1.1 billion tonnes of kimberlite to 1,000 metres • Two additional core holes completed for additional microdiamond sampling • Bulk sampling for macrodiamonds to commence shortly Philip Kenny, CEO of Firestone Diamonds, commented: "This is a highlyencouraging result from the first kimberlite to be evaluated by Firestone in theTsabong field, particularly given the very large size of MK1. We have 83kimberlites in our licence area and with 14 high interest kimberlites to be bulksampled in 2008 and bulk sampling expected to commence in March, we believe thatthe prospects for a significant economic discovery are good." Microdiamond recovery completed Following the completion of a 508 metre deep core hole into MK1 in mid 2007,samples of kimberlite from various depths were submitted to SGS MineralsServices in Canada for microdiamond recovery. A total of 117 microdiamonds(greater than 0.075 mm) have been recovered from the 561 kilogrammes ofkimberlitic core treated. Details of the samples and diamonds recovered areprovided in the table below: Sample number Rock Sample weight (kg) Microdiamonds Stones per Stones per Type recovered tonne 20 kgMK1/1 VK 146 14 96 1.9MK1/2 VK 187 15 80 1.6MK1/3 VK 148 26 175 3.5MK1/4 VK 79 62 785 15.7 Total 561 117 208 12.5 Note: VK = Volcaniclastic Kimberlite Grade estimate The size frequency distribution of the microdiamonds recovered has been analysedby an independent consultant, Mr. Tinus Oosterveld, in order to provide anindication of potential grade. Mr. Oosterveld was instrumental in establishingthe principles of grade estimation based on microdiamond size frequencydistribution during his 30 years at De Beers, and is considered to be one of theleading experts in the field. The initial work carried out by Mr. Oosterveld indicates an overall grade of 20carats per hundred tonnes for the four samples combined. Furthermore, analysisof the individual samples indicates an increase in grade with depth, with sampleMK1/4, although small, indicating a potential grade of 119 carats per hundredtonnes for the interval sampled. It should be noted that these are preliminaryestimates, as between 200-400 microdiamonds are typically required to providegrade estimates with the necessary levels of confidence. The data does indicate,however, that MK1 has the potential to have a significantly higher grade thanwas previously estimated based on the shallow drilling and limited evaluationwork carried out in the 1980's, and is very encouraging. Mr. Oosterveld concluded that "the indications are that MK1 might havesignificant macro diamond content" and recommended that more work be carried outto recover additional diamonds in order to allow more accurate estimates ofgrade to be made. The Company is also encouraged by the recovery of 3macrodiamonds (diamonds larger than 0.5 mm) from the samples. Although thesediamonds have not been used for the above grade estimates, they do provide afurther indication of the potential for MK1 to be significantly mineralized. Tonnage estimate Mineral Services (Pty) Limited of Cape Town, one of the industry's leadingdiamond exploration and evaluation consultancies, has completed preliminaryvolumetric modelling based on data from high resolution geophysics and drilling.Based on this modelling it is estimated that MK1 contains approximately 1.1billion tonnes of kimberlite to a depth of 1,000 metres. Further evaluation work planned The company now plans to recover additional microdiamonds from core drilling andmacrodiamonds from bulk sampling in order to increase confidence in the gradeestimates. Two additional core holes were drilled into the south-east and north-west lobesof MK1, to depths of 524 metres and 490 metres, respectively, in January 2008.Logging of these holes has recently been completed and indicates that the holesintersected similar volcaniclastic units below the crater sediments to thoseintersected in the first hole, and at depths ranging from 200 metres belowsurface. Core samples from the approximately 450 metres of volcaniclastickimberlite intersected in these holes have been sent to SGS Minerals Services inSouth Africa for microdiamond recovery, and results are expected during Q2 2008. Large Diameter Drill ("LDD") bulk sampling will be undertaken on MK1 during Q22008 to recover macrodiamonds, with four separate 100 tonne mini bulk samplesplanned. The samples will be treated at the Company's recently commissioned bulksampling plant at Tsabong. Notes: 1. Microdiamond recoveries were carried out by the caustic dissolutionmethod by SGS Minerals Services, which is accredited to the ISO/IEC 17025standard for this process. A breakdown of microdiamonds recovered by sieve sizeis provided below: Sieve +1.18 +0.85 +0.60 +0.425 +0.30 +0.212 +0.15 +0.105 +0.075size(mm) Number 2 1 0 3 7 16 17 37 34ofstones 2. Tinus Oosterveld has more than 45 years of experience in diamond miningand exploration. He was employed by Anglo American Corporation and De BeersConsolidated Mines Ltd. for more than 30 years, during which time he was incharge of De Beers' Mineral Resource Department and responsible for theassessment of kimberlite deposits throughout the world. He is regarded as one ofthe leading authorities in diamond resource evaluation and diamondgeostatistics. 3. 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 GuidanceNote for Mining, Oil and Gas Companies. Mr. Wilkes is Chief Operating Officer ofFirestone Diamonds plc and has over 26 years experience in diamond exploration,mineral resource management and mining. Mr. Wilkes is a member of thesub-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: Philip Kenny, Firestone Diamonds +44 20 8834 1028/+44 7831 324 645 Leesa Peters/Arabella Hobbs, Conduit PR +44 20 7429 6600/+44 7812 159 885 Mike Jones/Ryan Gaffney, Canaccord Adams (Joint Broker) +44 20 7050 6500 Jamie Cumming, Brewin Dolphin (Joint Broker) +44 141 314 8103/+44 7768 044 620 Ken Fleming, Brewin Dolphin (Nominated Adviser) +44 141 221 7733/+44 7971 835070 Background information on Tsabong: The Tsabong kimberlite field is located in south western Botswana, approximately280 km south west of the Jwaneng Mine, which is the world's biggest diamondmine. Tsabong is one of the largest diamondiferous kimberlite fields in theworld, containing 83 known kimberlites, of which 18 have been proven to bediamondiferous. Tsabong is noted for the exceptionally large size of many of itskimberlites, in particular the 180 hectare MK1 kimberlite, which is one of thelargest known diamondiferous kimberlites. The Tsabong field also contains 5kimberlites larger than 50 hectares and 32 kimberlites between 20 and 50hectares in size. Access to the area is via tarred road from Gaborone andinfrastructure in the area is good. Background information on Firestone Diamonds: AIM quoted Firestone Diamonds plc ("FDI.L") is an international diamond miningand exploration company with operations in Botswana and South Africa. Botswanais the world's largest and lowest cost producer of diamonds, with annualproduction worth over $2.5 billion, and is considered to be one of the mostprospective countries in the world to explore for diamonds. Firestone is the largest holder of mineral rights in Botswana's diamondiferouskimberlite fields, controlling over 21,000 square kilometres around the majorOrapa and Jwaneng mines and the entire Tsabong kimberlite field. Firestone has92 kimberlites in its portfolio, of which 23 have been proven to bediamondiferous and 15 are currently being advanced to bulk sampling. Firestone'smining operations in South Africa include a toll treatment operation in jointventure with De Beers at the Bonte Koe Mine. This information is provided by RNS The company news service from the London Stock Exchange