FDI.L Regulatory News (FDI)

Firestone Diamonds plc

Exceptional diamond sale results

LONDON: 5th July 2011

Firestone Diamonds plc, ("Firestone" or "the Company"), the AIM-quoted diamond mining and exploration company (ticker: AIM:FDI), is pleased to announce results from the diamond tender recently held in Gaborone, Botswana.

HIGHLIGHTS

Tim Wilkes, CEO of Firestone Diamonds, commented: "The results achieved from this tender reflects the continued strong demand for rough diamonds and the quality of production from Liqhobong and BK11. With diamond prices expected to remain strong and higher than expected grades being achieved from the Main Pipe, the value of Liqhobong continues to increase significantly. The demand for the higher quality production from BK11 has also yielded very good results."

The Company has completed its second sale in 2011 of diamonds from the Liqhobong Mine in Lesotho and BK11 Mine in Botswana. A total of 14,248 carats were sold for gross proceeds of approximately $2 million, a 42% increase in value from the April tender. Prices achieved were very good, with Liqhobong diamonds achieving a price of $123 per carat and BK11 diamonds achieving a price of $235 per carat. The sale was held at the Company's sales office at Diamond Technology Park in Gaborone, Botswana. Demand from local and international buyers remained extremely strong, with a total of 31 companies attending the tender.

Liqhobong

A total of 12,212 carats from both the Main Pipe and Satellite Pipe at Liqhobong was sold on behalf of the Company's 75% owned subsidiary, Liqhobong Mining Development Co. (Pty) Ltd, for $1,507,624. The average price achieved for production from the Main Pipe and Satellite Pipe of $123/carat is 12% higher than the price of $110/carat achieved for Q1 2011 production at the April 2011 tender. The value of diamonds from the Main Pipe was $149/carat, which represents an increase of 15% from April 2011 and 52% from December 2010. Demand for small diamonds, cape yellows and browns continues to be very strong and prices for many of these categories have increased since the April 2011 tender. The absence of large, high value stones, which are proven to occur in the K5 unit of the Main Pipe, in the tender parcel, indicates that higher prices will be obtained as mining progresses into the K5 material later in 2011.

The grade of material processed from the Main Pipe continues to be significantly higher than the published resource grade, with the production grade of 34 carat per hundred tonnes ("cpht") from the K2 unit being 30% higher than the resource grade of 26 cpht. The Company expects these grades to be maintained, which would give the Main Pipe a value of over $50/tonne. With operating costs for Plant 1 expected to be $18/tonne once commissioning of the Phase 1 expansion of Plant 1 has been completed in July 2011, this would give an operating margin of 60%. Further increases in operating margins are expected when mining of the higher grade, higher revenue per carat K5 and K6 units commences later in 2011.

These results continue to support the Company's assessment of Liqhobong as one of most attractive kimberlites being developed in the industry today.

BK11

A total of 2,035 carats from BK11 were sold on behalf of the Company's 90% owned subsidiary, Monak Venture (Pty) Limited, for $479,995. The average price achieved is $235/carat, which is 16% higher than the price achieved for Q1 2011 production at the April 2011 tender and 33% higher than the December 2010 price.  Demand for the smaller sawable and makeable crystals was again very high. With the secondary crushing circuit at BK11 now commissioned and fully operational, it is expected that the increased diamond liberation will result in high grades and larger average diamond sizes, which should result in higher diamond prices.

Diamond Sales and Marketing

The Company has now completed its third diamond tender in Gaborone and a further three tenders are planned in 2011. Subject to market conditions and the size of production available for sale, the Company plans to hold a diamond sale approximately every two months in 2012. With significantly higher production expected from Liqhobong in 2012 following the completion of the Plant 1 expansion, which will result in capacity being tripled to 1.3 million tonnes per annum, the 2012 tenders are expected to be significantly larger than those held in 2011. The Company's diamond tenders are managed by First Element Pty Ltd, a 100% owned subsidiary of the Johan Erikson Group from South Africa. Interest in and feedback from the Company's tenders, which are the first independent diamond tenders operated in Botswana, has been very positive.

For further information, visit the Company's web site at www.firestonediamonds.com or contact:

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.