Firestone Diamonds upbeat about BK11 diamond project in Botswana

Firestone Diamonds is buoyant about its expected diamond operation likely to commence in the second quarter of 2010. Chief geologist Polite Khutjwe addressed the locals in Letlhakane, where its operations are located saying that full production "will be attained by the end of 2010".
According to Firestone Diamonds, BK11 is situated approximately 20 kilometres south east of Debswana's Orapa Mine and seven kilometres north west of Debswana's Letlhakane Mine.
Philip Kenny, CEO of Firestone Diamonds said in a statement on the company's website that, "With the projected shortfall in rough diamond supply expected to drive diamond prices higher in coming years, we believe that the prospects for Firestone are extremely good".
Firestone said that progress has been made at BK11 with grade and diamond quality from material processed from the bulk sampling trench has been in line with expectations.
 Valuation of approximately 500 carats from the trench has been completed, resulting in an overall modelled value of $137/carat (a 1% increase from June 2009) and a modelled value of $157/carat for the KW area on the west side of BK11 (a 9% increase from June 2009), which is the area initially targeted for mine development. Based on these results, the company said it now intends to proceed to mine development on BK11.
Firestone plans to modify the production plant at its Bonte Koe mine in South Africa for use at BK11. According to the company, the plant will be relocated and commissioned in two phases, with production to commence ahead of schedule in Q2 2010 with a plant capacity of approximately 650,000 tonnes per annum, increasing to full production capacity of 1,500,000 tonnes per annum in Q3 2010.
It expects revenues of $16 per tonne and with low operating costs in the Orapa area of approximately $6.50 per tonne, mining of the KW area at BK11 is expected to produce annual revenues of approximately $24 million per annum at operating margins of 60%.
The company plans to finance the required development with existing cash resources. Firestone has entered into an agreement with its Botswana partners at BK11 to finance their share of mine development costs, in return for which its interest in the project will be increased from 80% to 90%.
Firestone said that negotiations are under way with the Botswana Power Corporation for the construction of a 14 km long power line from Orapa to BK11, but it has planned sufficient generating capacity available to operate the plant. This will add approximately $1/tonne to operating costs until grid power is available.
Khutjwe told the residents of Letlhakane that the social and environmental impact assessment study report for the B/K 11 project was approved by the Department of Environmental Affairs in September 2009.  http://www.proactiveinvestors.co.uk/companies/news/12462/firestone-diamonds-upbeat-about-bk11-diamond-project-in-botswana-12462.html