Kopane Diamond’s shareholders vote in favour of Firestone combination

The combination of Firestone Diamonds (LON:FDI) and Kopane Diamond Development (LON:KDD) is set to go ahead after Kopane shareholders voted in favour of the deal earlier today.
The news follows Friday’s approval by Firestone shareholders at their general meeting.
With both sets of shareholders now having approved the deal, Kopane’s shares will cease to trade on London’s AIM market on 29 September, and the enlarged group’s shares will be admitted the following day.

Back in July, Firestone made a surprise bid for rival Kopane.

Kopane’s board had unanimously recommended the all-paper deal that valued the shares at 17 pence each, or £51 million, at the time of the bid.
This represented a 36 per cent premium to the previous day’s closing price.

The pair said the deal would give the enlarged group a more "diversified portfolio of production, development and exploration stage diamond projects".

Last week, the company's shares jumped over 15% following an upbeat statement, which highlighted that the company has made significant progress with the development of the BK11 kimberlite, and production is ahead of schedule.

Following the Phase 1 commissioning in July, the BK11 plant is currently running with the average throughput of 185 tonnes per hour (tph), 23% ahead of the initial 150tph target, the company announced.

The mine began continuous operations at the beginning of August and diamond concentrates are now being shipped from BK11 to the diamond sorting facility in Gaborone.

Firestone described initial diamond recoveries as ‘very encouraging’ and highlighted the largest diamond recovery to date from BK11 - a high quality 13.74 carat diamond. The find increases the raw value of diamonds from bulk sample excavation by 68% from $149/carat to over $250/carat, and as such Firestone expects a significant increase to BK11’s modelled value.

Based on the better-than-expected performance of the Phase 1 plant, Firestone believes it will comfortably exceeded BK11’s 1.5 million tonnes per annum (Mtpa) production target capacity once Phase 2 has been completed in Q4 2010.