FDI.L Regulatory News (FDI)

Firestone Diamonds plc

Operations update

LONDON: 20 July, 2011

Firestone Diamonds plc, ("Firestone" or "the Company"), the AIM-quoted diamond mining and exploration company (ticker: AIM:FDI), is pleased to provide an update on the Company's mining operations in Lesotho and Botswana.

HIGHLIGHTS

Liqhobong Mine, Lesotho

BK11 Mine, Botswana

Diamond Sales

Tim Wilkes, CEO of Firestone Diamonds, commented: "We are very excited about the results of our first tests of the high grade K5 unit at the Main Pipe at Liqhobong. The recovery of high quality diamonds, including our first fancy yellow and our first pink diamond, confirms that there is much upside to the value of the Main Pipe. With mining operations planned to commence at the K5 unit in the second half of 2011, these results augur well for future production and diamond values from Liqhobong."

Liqhobong Mine, Lesotho

Continued good progress has been made at Firestone's 75% owned Liqhobong Mine in Lesotho.

K5

Pumping of water from the Main Pipe to the new raw water dam that has been established at the Satellite Pipe commenced in July 2011, and has enabled some of the K5 ore to be exposed for mining. Approximately 3,000 tonnes of K5 material has been treated through Plant 1 to provide an initial indication of diamond quality from K5 and to assess plant performance with the high fines content contained in K5.

The quality of diamonds recovered was significantly better than those from the K2 and K4 units that have been mined to date. Recoveries included four impressive diamonds - a 33 carat white, a 9 carat vivid yellow, a high quality 8 carat white octahedron and a very attractive 1.7 carat pink diamond. These results confirm the presence of high quality diamonds at the Main Pipe, in particular the first pink diamond to be recovered at Liqhobong, and are particularly significant in that the diamonds were recovered from a small sample of K5 material.

The K5 unit is the highest grade of the four geological units in the Main Pipe, with an average resource grade of 45 carats per hundred tonnes ("cpht"), compared to the average resource grade of 28 cpht for the K2 and K4 kimberlite units that have been mined to date in 2011. As the K5 unit will be the primary focus for mining operations for the next two years, this bodes well for continued increases in production and diamond prices from Liqhobong.

Operationally, the production plant coped well with the K5 material, although some components of the plant were overloaded as a result of the increased amount of fine material. These problems will be addressed by the new scrubbing and screening unit that will be added to the front end of Plant 1, on which work is now almost complete.

Plant 2

The Company is pleased to report that it has signed a letter of intent with Dowding Reynard and Associates ("DRA"), under which DRA will complete the Definitive Feasibility Study ("DFS") and commence detailed engineering studies for the planned 4.2 million tonnes per annum ("mtpa") Plant 2. The DFS is scheduled for completion at the end of 2011. DRA has been associated with a number of large scale plant design and construction projects in Southern Africa and has specialised skills and experience in the design of large scale diamond plants.

Plant 1

Plant 1 has continued to run well, and is consistently operating at its rated capacity of 0.4 mtpa. DRA will also undertake a review of the current Plant 1 design with the objective of optimizing its throughput and efficiency. Plant 1 is scheduled to reach a production level of 0.65 mtpa in Q3 2011 and 1.3 mtpa in Q1 2012.

BK11 Mine, Botswana

Good progress has also been made at Firestone's 90% owned BK11 Mine in Botswana.

As reported in Q1 2011, a number of problems were encountered with the crushing and scrubbing circuits at the BK11 plant that resulted in lower than anticipated diamond liberation from the material being processed. A secondary crushing circuit based on mobile crushers was designed to address these problems and this circuit has been operational since the beginning of July 2011. Significant increases in diamond liberation and grade have been achieved during the limited time that the circuit has been operational, and a detailed update will be provided as more data becomes available.

Mining operations have now exposed the higher grade blocks of the reserve on bench 4, and the Company is confident that further increases in grade will be achieved as this material is processed. The increased diamond recoveries should be reflected at the next diamond sale in August 2011.

Diamond Sales

The Company plans to hold its third diamond sale of 2011 during the last two weeks of August at its diamond sales office at Diamond Technology Park in Gaborone, Botswana. The sale is expected to be significantly larger than the last sale in June 2011, and will include the high quality diamonds recently recovered from the K5 material at Liqhobong.

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.