Firestone
Diamonds plc
Buffels River Toll Treatment Update
LONDON: 9 February, 2009
Firestone
Diamonds plc, ("Firestone" or "the Company"), the
AIM-quoted diamond mining and exploration company (ticker:
AIM:FDI), today announces that the toll treatment agreement
at the Company's Bonte Koe
Mine on the Buffels River has been terminated
by De Beers Consolidated Mines ("De Beers"). De Beers has made a
payment of approximately ?2.5 million to the Company
as compensation for early termination.
Firestone has
been notified by De Beers that it has completed a review of its
Namaqualand Mines operations in South Africa, which
include the toll treatment joint venture with Firestone at
its Bonte Koe
Mine on the Buffels River.
While Firestone has achieved all of the
required throughput and operational targets since commencement of
operations in 2006, a
decrease in revenue received by De Beers from diamonds recovered and an
increase in mining costs have resulted in De Beers deciding to suspend
its Buffels River operations indefinitely.
Under the terms of the toll treatment agreement De Beers has made a
payment to Firestone of approximately ?2.5
million as compensation for early termination. Firestone retains ownership of
the toll treatment plant under the agreement.
Firestone's
operations at Bonte Koe
have now been suspended. The Bonte Koe plant, which has a capacity of approximately 1.5
million tonnes per annum, would be suitable for use at the
Company's BK11 kimberlite project in Botswana. This would substantially reduce
the time and cost to develop a new mining operation at BK11 and also
significantly improve the economics of the project. The Company is
currently making provisional plans to relocate the Bonte Koe plant and
infrastructure to BK11, subject to results from bulk sampling which are
expected to be available later this quarter.
Philip
Kenny, Chief Executive of Firestone Diamonds commented: "While we would
like to have been able to continue with what was a very successful toll
treatment operation at Bonte Koe,
in current market conditions the ?2.5 million termination payment that we have
received strengthens the Company's financial position. We are continuing
to pursue a number of significant new toll treatment opportunities and with our
experience working for De Beers at Bonte Koe having proven that we have the capability to
design, build and operate efficient, cost effective mining operations to a
high standard, we are confident that we can continue to develop our toll
treatment business."
For
further information, visit the Company's web site
at www.firestonediamonds.com, or contact:
Philip Kenny, Firestone
Diamonds
|
+44 20 8834 1028/+44 7831 324 645
|
Gareth Tredway,
Jos Simson, Conduit PR
|
+44 20 7429 6603/+44 7899 870 450
|
Mike
Jones/Ryan Gaffney, Canaccord Adams (Joint Broker)
|
+44 020 7050 6500
|
Jerry
Keen, Blue Oar (Joint Broker)
|
+44 20 7448 4492/+44 777 069 7358
|
Alexander
Dewar, Brewin Dolphin
(Nominated
Adviser)
|
+44 131 529 0276
|
Background
information on Firestone Diamonds:
AIM
quoted 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.
This information is provided by RNS
The company news service from the London Stock
Exchange
END