Thursday, 1 April 2010

Firestone Diamonds set to begin BK11 production in Q2 2010

In its interim report for the six-months to 31 December 2009, Firestone Diamonds (AIM: FDI) said that the period saw good progress in the development of its project portfolio in Botswana.  The company’s activities were primarily focused on the BK11 kimberlite in the Orapa area, from which producttion is expected to start on schedule in Q2 2010. 

“We are only months away from commencing production on schedule and are still on target to reach full production capacity by the end of 2010 - To put a new mine into operation at BK11 just over 3 years from being granted a prospecting licence, and at a much lower cost than comparable operations elsewhere, will have been a significant achievement by any measure”, Firestone chairman James F Kenny stated. 

Whilst remaining on schedule, Firestone noted that it required additional capital of approximately £2m, and discussions are at an advanced stage with the company's bankers in Botswana. Early in the period, in July 2009, Firestone raised £7.2m from a share placing in order to finance the development of the projects in Botswana, and to provide general working capital. 

Towards the end of the period, in December, Firestone announced that the final phase of the resource evaluation work at BK11 had been completed with positive results, and consequently the company decided to begin the BK11 mine development.

A mining lease application was submitted for BK11 in Q1 2010, and the lease is expected to be granted shortly. Additionally, pit optimisation and mine planning studies also commenced during Q1 2010.

Based on plans for selective mining and the presence of high grade grain flow deposits, the BK11 mine plan is now expected to result in approximately 11.5Mt (million tonnes) of kimberlite at an average grade of 8.5 carats per hundred tonnes (cpht), giving total production of approximately 1 million carats, which Firestone noted was a 22% increase on previous estimates. Furthermore, the overall value of BK11 diamonds is estimated to have increased approximately 13% since December 2009 to US$155/carat.

"With BK11 coming into production in Q2 2010, Firestone is poised to become one of only three kimberlite producers worldwide outside of the major mining companies”, Firestone chief executive Philip Kenny commented.

“Together with our extensive portfolio of kimberlites in the Orapa and Tsabong kimberlite fields, the toll treatment opportunities that the Company has, and the significant shortfall in rough diamond supply projected in the coming years, we are confident about Firestone's future prospects in Botswana”.

The company’s other projects consist of the Orapa Satellite Kimberlites, the Jwaneng Tailings and the Namdeb Toll Treatment Project.

Also in the post-reporting period, Firestone announced its intention to apply for a secondary listing on the Botswana Stock Exchange, the listing application is expected to be made shortly and the listing is planned to take place in Q2 2010.

http://www.proactiveinvestors.co.uk/companies/news/15110/firestone-diamonds-set-to-begin-bk11-production-in-q2-2010--15110.html

No comments:

Post a Comment