12 Mar 2010 07:00
Firestone Diamonds plc
Selected by Namdeb for new toll treatment project
LONDON: 12 March, 2010
Firestone Diamonds plc, ("Firestone" or "the Company"), the AIM-quoted diamond mining and exploration company (ticker: AIM:FDI), is pleased to announce that it has been selected by Namdeb Diamond Corporation ("Namdeb") as the preferred supplier and operator for the Dredge and Floating Treatment Plant ("FTP") project at Namdeb's diamond mining operations on the south west coast of Namibia. Namdeb is a joint venture between the Government of the Republic of Namibia and De Beers and is the world's 6th largest diamond producer by value.
HIGHLIGHTS
| • | Firestone selected as preferred supplier and operator for Dredge and Floating Treatment Plant project by Namdeb
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| • | Firestone and Namdeb jointly completing feasibility for review and approval by Namdeb board, following which contract negotiations will be finalised
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| • | Plant to have a capacity of 11.5 million tonnes per annum and 15 year minimum life
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| • | Firestone to construct the plant for Namdeb and operate on a toll treatment basis
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| • | Production targeted to commence in 2012
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Philip Kenny, CEO of Firestone Diamonds, commented: "Being selected by Namdeb, one of the world's leading diamond producers, for the Dredge and Floating Treatment Plant project is a reflection of the significant operating capability that Firestone has developed. This project follows the selection of Firestone by Debswana in 2009 for a toll treatment tailings processing project at the Jwaneng Mine in Botswana and represents a further opportunity for the Company to supplement cash flow from our own mining operations at BK11 in Botswana with cash flow from long term, low risk toll treatment projects."
Namdeb is currently evaluating a number of outsourcing alternatives that would enable it to extend the life of its mining operations. One of these alternatives is the FTP project. The FTP is an integrated production unit that will remove overburden using a dredge and treat diamondiferous gravel using a floating treatment plant in a single synchronous operation. This will result in substantially lower operating costs than using conventional earth moving equipment and fixed treatment plans located away from the mining area. The area selected to be mined by the FTP is in Mining Area 1 close to the mouth of the Orange River and extends from a bedrock elevation of five metres above to 15 metres below sea level. The FTP will have a target production capacity of 11.5 million tonnes per annum and will be designed for a minimum 15 year life.
Following the submission of tenders by a number of companies in 2008, Firestone has been selected by Namdeb as the preferred supplier for building the FTP for Namdeb and for operating it on a toll treatment basis. Firestone and the Namdeb FTP project team have commenced work on revising Namdeb's feasibility study for the project to reflect current capital costs and Firestone's projected operating costs, with Firestone being paid an agreed price per tonne of material processed. Once the feasibility study has been completed it will be presented to the board of Namdeb for approval, subject to which Firestone and Namdeb will conclude formal contract negotiations and the project would move into the execution phase, with a target date for commencement of production of 2012. The feasibility study is expected to be completed and presented to the Namdeb board later in 2010.
For further information, visit the Company's web site or contact:
| Philip Kenny, Firestone Diamonds
| +44 20 8834 1028/+44 7831 324 645 |
| Simon Edwards / Tim Redfern, Evolution Securities (Joint Broker)
| +44 20 7071 4330 / 4312 |
| Rory Scott, Mirabaud Securities (Joint Broker)
| +44 20 7878 3360 |
| Alexander Dewar, Brewin Dolphin (Nominated Adviser)
| +44 131 529 0276 |
| Jos Simson / Leesa Peters, Conduit PR
| +44 20 7429 6603/+44 7899 870 450 |
Background information on Firestone Diamonds:
Firestone Diamonds plc ("FDI.L") is an international diamond mining and exploration company with operations in Botswana and South Africa. 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.
Firestone is the largest holder of mineral rights in Botswana's diamondiferous kimberlite fields, controlling over 25,000 square kilometres around the major Orapa and Jwaneng mines and the entire Tsabong kimberlite field. Firestone has 103 kimberlites in its portfolio, of which BK11 is due to commence production in Q2 2010 and 29 others have been proven to be diamondiferous.