FDI.L Regulatory News (FDI)

29 Jan 2007 07:01

Firestone Diamonds PLC29 January 2007 Firestone Diamonds plc Kimberlite discovery at Tsabong project, Botswana LONDON: 29 January, 2007 HIGHLIGHTS • Four large kimberlites discovered at Tsabong - MK74 - 8 hectares - MK75 - 28 hectares - MK76 - 12 hectares - MK77 - 8 hectares • Increases number of kimberlites discovered since exploration commenced in November 2006 to 7 • Increases number of kimberlites in licence area to 74 • Kimberlite evaluation programme to commence on schedule in Q1 2007 - focus on 17 known diamondiferous kimberlites - 6,000 metres of core drilling planned on highest ranked kimberlites - deep core drilling to be undertaken on 180 hectare M1 kimberlite Firestone Diamonds plc, ("Firestone" or "the Company"), the AIM-quoted diamondmining and exploration company (ticker: AIM:FDI), is pleased to provide anupdate on exploration and evaluation work at its Tsabong kimberlite project inBotswana. Exploration Results In November 2006 the Company commenced a 10,000 metre exploration drillingprogramme at Tsabong. This programme is targeting approximately 80 well definedgeophysical anomalies that have been identified by interpretation ofaeromagnetic survey data over the area. In December 2006 the Company announcedthat it had discovered three kimberlites, with estimated sizes of 22, 18 and 15hectares. A further four new kimberlites have since been discovered. Modeling of thesekimberlites based on airborne and ground geophysical data indicates that theyare large, with estimated sizes ranging from 8 to 28 hectares. Drill chipsamples are currently being prepared for dispatch to laboratories in SouthAfrica and Canada for microdiamond, mineral chemistry and petrographic analysis.These discoveries bring the total number of kimberlites in the Tsabong projectarea to 74. Details of the discovery holes, all of which were terminated in kimberlite, arelisted below: Kimberlite Estimated Hole depth Kimberlite Depth of Kimberlite type size (m) intersection (m) overburden (m) (Hectares) MK74 8 119 99 20 Diatreme/hypabyssal MK75 28 149 52 97 Diatreme MK76 12 107 72 35 Crater MK77 8 113 79 34 Crater Philip Kenny, CEO of Firestone Diamonds, commented: "The discovery of sevenlarge kimberlites in our first two months of exploration at Tsabong is a verysignificant achievement. We are still an early stage of our explorationprogramme, and with many more targets remaining, we believe that there is goodpotential for the discovery of new, large-tonnage diamondiferous kimberlites.With 74 kimberlites in our licence area and the prospects of more discoveriesbeing made, we believe that Tsabong has the potential to produce a majoreconomic discovery." Evaluation Programme A detailed evaluation programme is planned for the kimberlites in the Tsabongproject area, none of which have been evaluated on an adequate scale or withmodern techniques. Planning for this programme, which will be carried out inparallel with the current exploration programme, is at an advanced stage andwork is expected to commence on schedule in Q1 2007. Approximately 6,000 metres of core drilling is planned on the highest ranked ofthe 17 known diamondiferous kimberlites. Work will also be carried out on anumber of large kimberlites that have not produced microdiamonds but have onlybeen sampled by a single discovery hole, and on any new discoveries that showpositive microdiamond counts or geochemistry. A separate evaluation programmewill be carried out on the 180 hectare M1 kimberlite, which is the onlykimberlite in the Tsabong field to have been previously sampled formacrodiamonds. Core holes will be drilled to depths of up to 500 metres in order to identifythe various geological phases in the kimberlites at depth and to allowpreliminary 3D geological models of the kimberlites to be constructed. Detailedmicrodiamond, mineral chemistry and petrographic analyses will be carried out onsamples from the core. This work will allow more accurate assessments of theeconomic potential of the kimberlites to be made. Subject to the results of the evaluation programme, the next stage of work atTsabong will be to take bulk samples from selected kimberlites by large diameterdrilling to test for the presence of macrodiamonds. For further information: Philip Kenny, Firestone Diamonds +44 20 8834 1028 / +44 7831 324 645 Laurence Read/Jos Simson, Conduit PR +44 20 7429 6605 / +44 7979 955 923 Jamie Cumming, Bell Lawrie +44 141 314 8103 / +44 7768 044 620 www.firestonediamonds.com 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 77 known kimberlites, of which 17 have been proven to bediamondiferous. Tsabong is noted for the exceptionally large size of many ofits kimberlites, in particular the 180 hectare M1 kimberlite, which is one ofthe largest known diamondiferous kimberlites. The Tsabong field also contains 5kimberlites larger than 50 hectares and 30 kimberlites between 20 and 50hectares in size. With rough diamond prices estimated to have tripled since the Tsabong field wasdiscovered in the early 1980's, the threshold for economic viability in the areahas been reduced substantially. A kimberlite in Tsabong with a moderate gradeof 20 cpht and average quality diamonds of $100 per carat would support alarge-scale, profitable mining operation. Access to the area is via tarred road from Gaborone and infrastructure in thearea is good. Background information on Firestone Diamonds: Firestone Diamonds plc is an international diamond mining and explorationcompany with operations in the Namaqualand region of South Africa, Botswana andthe United States. Firestone has extensive interests in Botswana, which is the world's largestproducer of diamonds, with annual production of approximately 30 million caratsworth over $2.5 billion. Botswana is considered to be one of the best countriesin the world to explore for kimberlite - the primary source rock for diamonds.Firestone's Mopipi, Orapa and Jwaneng projects are located close to the majorOrapa and Jwaneng mines and are all being explored by De Beers in joint venturewith Firestone. Firestone is also exploring for kimberlite in the US on theLaurentia craton, which extends into Canada, where it hosts a number ofdiamondiferous kimberlite deposits. Namaqualand, which is located on the west coast of South Africa, has been one ofthe world's largest alluvial diamond producing regions for the past 60 years,with total production to date estimated to be worth more than $3 billion.Firestone's mining operations in Namaqualand include the Bonte Koe, Avontuur andOena Mines, all of which produce high quality alluvial diamonds, and a growingportfolio of early stage and advanced exploration projects, of which the GroenRiver Valley project, which is being explored by De Beers in joint venture withFirestone, is the most important. Firestone has a highly qualified management team with extensive experience inthe exploration, evaluation and development of diamond projects. Firestone isquoted on the Alternative Investment Market (AIM) of the London Stock Exchangeand trades under the symbol FDI.L. Note: The information in this statement has been reviewed by Mr. Tim Wilkes, BSc, 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 Officerof Firestone Diamonds plc and has over 25 years experience in diamondexploration, mineral resource management and mining. Mr. Wilkes is a member ofthe sub-committee for diamonds of the South African Mineral Resource Committee(SAMREC). This information is provided by RNS The company news service from the London Stock Exchange