26 January 2017

Firestone Diamonds plc

("Firestone", the "Group" or the "Company") (AIM: FDI)

Quarterly Update on Construction and Commissioning Activities

Firestone Diamonds plc, the AIM-quoted Diamond company, is pleased to provide its quarterly update on construction and commissioning activities at its Liqhobong Diamond Mine ("Liqhobong" or the "Project") for the quarter ended December 2016. Liqhobong is owned 75% by Firestone and 25% by the Government of Lesotho.

Highlights for the quarter ended 31 December 2016

?        Project construction 100% complete and ramping up to nameplate capacity

?        First Diamond recoveries commenced in late October 2016

?        Recovery of over 20 special stones larger than 10.8 carats, with the largest being a 37 carat white Diamond, as well as several fancy yellow diamonds

?        Processing of lower grade stockpiles and diluted ore in the quarter produced 58,000 carats at a grade of 14.4 carats per hundred tonnes

?        402,000 tonnes treated by the processing plant and nameplate capacity achieved on multiple occasions

?        Strong operating cost management of US$12 per tonne treated at bottom end of guidance

?        Zero lost time injury record maintained, with approximately 3.6 million man hours worked

?        Strong financial position with cash and available facilities of US$18 million, alongside a further US$15 million standby facility available

?        First sale of Liqhobong diamonds will be held in Antwerp, Belgium from 6-10 February 2017

Stuart Brown, Chief Executive Officer, commented:

"Construction activities at Liqhobong were completed early in the quarter and we are currently in the commissioning and ramp up stage of the Project. We have been pleased with the tonnes processed by the plant, which has already seen nameplate production reached on multiple occasions at this early stage of ramp up.

As previously guided, the commencement of commissioning has seen the processing of historic low grade stockpiles, diluted ore and low grade ore from the main pit which at the end of December had produced 58,000 carats. Pleasingly, we have recovered over 20 special stones (larger than 10.8 carats) including a 37 carat white stone and numerous smaller yellow and fancy yellow stones, with no breakages of larger stones to date. At this stage of the ramp up, we have encountered the normal commissioning challenges and these are being addressed by our team in a methodical way.

We look forward to providing further updates on the ramp up programme, as well as the Diamond sale next month."

Project and Commissioning Update

As at 31 December 2016, construction was 100% completed at Liqhobong and first ore was treated through the plant at the end of October 2016, which was well within the revised delivery target.. By the end of December 2016, 402,000 tonnes of ore (being from historic low grade stockpiles, diluted ore and low grade ore from the main pit) had been treated through the plant with a total of 58,000 carats having been recovered, including over 20 special stones larger than 10.8 carats, with the largest being a 37 carat white Diamond, as well as several fancy yellow diamonds.

As is normal during the commissioning phase of a new plant, we have had to modify or change certain operating parameters. The current grade of 14.4 carats per hundred tonnes has been below the initial commissioning estimates and the Company is currently focused on making adjustments and investigating potential causes for the under recovery of lower value finer diamonds.

During the commissioning process we will continue mining in the lower quality ore areas until the recoveries have reached required levels, following which we will then move into the better quality ore areas within the main pit, where the higher value diamonds are expected to be recovered. The recovery tailings from the commissioning phase are being stored separately and will be retreated once the commissioning adjustments have been made.

Operations at the plant have seen good volumes being treated, and on a few occasions during the ramp up stage, the plant has already met the nameplate capacity target of 500 tonnes per hour for 24 consecutive hours. The Company remains on target to achieve nameplate production by the beginning of Q2 2017.

During the commissioning phase we have been careful to manage costs in line with the planned tonnage volumes, at US$12 per tonne treated, we are at the bottom end of the guidance of US$12-14 per tonne.

The rainy season has also begun and water is being collected and stored in the various water storage facilities for future operations in the dry season.

Health & Safety

At the end of the quarter, the Project maintained its outstanding health and safety record, having reached 3.6 million man hours worked without a single Lost Time Injury.

Financial

The Company continues to manage its cash prudently. At the end of the year, cash on hand was US$4 million with US$14 million available under the ABSA debt facility and a further US$15 million available under the standby facility.

At the end of December 2016, 95% of the capital budget had been spent on the project with the remaining US$8 million to be spent in Q1 2017.

Diamond Sales

Firestone has scheduled its first Diamond sale to take place in Antwerp in the week of 6-10 February 2017. Results are expected to be announced during the week commencing 13 February 2017. Thereafter, the Company expects to host two sales per quarter with the second auction due late Q1 2017.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR").

For more information contact:

Background information on Firestone

Firestone is an international Diamond mining company with operations focused on Lesotho. Firestone is currently in the process of commencing production at the Liqhobong Diamond Mine in Lesotho to become a one million carat per annum producer.

Lesotho is emerging as one of Africa's significant new Diamond producers, hosting Gem Diamonds' Letseng Mine, Firestone's Liqhobong Mine and Namakwa Diamonds' Kao Mine.

For more information please visit: www.firestonediamonds.com.

**ENDS**