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FIRESTONE
DIAMONDS plc
Botswana operations update
LONDON: 25 September,
2009
Firestone
Diamonds plc ("Firestone" or "the Company"), the
AIM-quoted diamond mining and exploration company (ticker: AIM:FDI), is
pleased to announce an update on its BK11 and Jwaneng tailings
projects in Botswana.
Highlights
BK11
·
Substantial progress made with bulk
sampling
o
250,000
tonnes mined since July
o
Mining target of 325,000 tonnes to
be reached in October 2009
o
Mining rate of 5,000 tones per day achieved
·
Pilot production plant fully
operational
·
Concentrate sorting and diamond recovery being
undertaken in Gaborone
·
Mine development decision expected to be made
in Q4 2009
Jwaneng Tailings
·
Negotiations with Debswana on toll
treatment progressing towards target for agreement to be
signed in Q4 2009
·
Project finance discussions
progressing
Philip
Kenny, CEO of Firestone Diamonds, commented: "We are very pleased with the
progress that we have made since July. We continue to work
towards making a mine development decision on BK11 and
to signing an agreement with Debswana on the Jwaneng tailings project before
the end of the year.. With the Company fully financed
to production at BK11, and with prices in the rough diamond
market continuing to recover from
their recent lows, we remain confident about Firestone's
prospects."
BK11
In
March 2009 the Company announced an inferred resource of 12 million
tonnes containing approximately 830,000 carats with an overall modelled value
of $123/carat. In July 2009 the Company announced that the modelled value had
increased to $135/carat and that work on the final phase of
evaluation on BK11 had commenced. Substantial progress
has since been made.
Bulk
sampling
The
objective of the final phase of evaluation is
to process a bulk sample of approximately 20,000 tonnes and recover a
sufficiently large parcel of diamonds in order for a high confidence
diamond valuation to be obtained. This data is expected to
be sufficient to allow a mine development decision to be
made by the end of the year. The bulk sample
trench is planned to extend to a depth of 30 metres
and will require the excavation of approximately 325,000 tonnes
of overburden and kimberlite. The location for
the bulk sample trench was selected so as to intersect both the
higher and lower grade kimberlite units that have been identified
by large diameter drilling.
The
pit has now advanced to a depth of 20 metres with
approximately 250,000 tonnes of material mined. Mining of
the remaining kimberlite is scheduled to be completed
in October 2009. The material selected for sampling will be
processed as twenty separate 1,000 tonne samples in order to provide
information on grade and geological variability. The remaining excavated
kimberlite of approximately 180,000 tonnes will be stockpiled
for processing at a later stage.
Performance
of the mining equipment on site has been very good, with mining
rates now averaging over 5,000 tonnes per day. This
indicates that the target mining capacity
of 1.5 million tonnes per annum is likely to be achievable
with the Company's existing equipment. Commissioning of
the 25 tonne per hour pilot production plant was completed in
July and the plant is now running continuously, with concentrate
being transported to the Company's office in Gaborone for sorting and diamond
recovery.
The
Company expects to be in a position to make a decision to commence mine
development based on the results of this work in Q4 2009, as
planned, subject to which production is expected to
commence in mid 2010.
Mine
development planning
Much of
the infrastructure that has been established to support the pilot
production plant has been designed to support full scale mining
operations, which will reduce the time and cost of mine development. Sufficient
water supply and storage capacity is now in place for the
target production capacity of approximately 1.5 million tonnes
per annum. Work has continued on preparing the production
plant at the Company's Bonte Koe Mine in South Africa for
relocation to BK11, subject to results from bulk sampling.
Jwaneng
Tailings Project
In
February 2009, Firestone announced that it had been selected by Debswana
Diamond Company ("Debswana") as the preferred bidder to supply,
construct and operate a modular tailings treatment plant at the Jwaneng Mine in
Botswana on a toll treatment basis. Debswana is a joint venture between
the Government of the Republic of Botswana and De Beers and
is the world's leading diamond producer by value. The Jwaneng plant is
intended to serve as a pilot facility to demonstrate the economics and
capability of the modular plant concept on the
Jwaneng tailings resource, which is estimated to be in excess of
30 million tonnes.
Firestone
and Debswana have established a joint steering committee for the project to
negotiate and agree detailed technical and commercial provisions for the
project. This work has continued to progress towards the target of
finalising and signing an agreement in Q4 2009.
Discussions
are also progressing with a number of interested lenders in
relation to debt financing of the capital costs of the project through a
special purpose vehicle. The Company expects to be in position to finalise
these arrangements shortly after the Debswana agreement is signed.
Recent
photographs of operations at BK11 will be available at www.firestonediamonds.com. 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 29,000 square kilometres around the major Orapa and
Jwaneng mines and the entire Tsabong kimberlite field. Firestone has 95
kimberlites in its portfolio, of which 24 have been proven to be
diamondiferous. Sixteen of Firestone's kimberlites are at the bulk sampling
stage, of which BK11 is the most advanced.
Notes:
1. 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 Guidance Note for Mining, Oil and Gas Companies. Mr. Wilkes
is Chief Operating Officer of Firestone Diamonds plc and has over 27
years' experience in diamond exploration, mineral resource management and
mining. Mr. Wilkes is a member of the sub-committee for diamonds of the South
African Mineral Resource Committee (SAMREC).
2. All grades and diamond values are based on a
bottom cut off of 1mm.
3.
The resource estimates in this statement have been compiled in accordance with
the SAMREC code.
This information is provided by RNS
The company news service from the London Stock
Exchange
END
MSCILFLEALISFIA