Firestone begins BK11 Mine disposal
Brian Benza | Friday August 15, 2014 13:55
Citing operational challenges and weak market demand for the precious stones, the British company suspended operations at BK11 in 2012, when the board decided to focus on the company’s interests in Lesotho, for which it raised US$225.2 million earlier this year.
The move resulted in the retrenchment of 143 workers, with 15 being retained for care and maintenance activities.
In a statement released yesterday, the company announced the appointment of Questco Pty Limited, a South Africa- based corporate finance adviser with prior experience in the successful sale of other diamond assets in Sub-Saharan Africa, to manage the sale process.
“Interested parties are invited to submit expressions of interest, along with signed confidentiality undertakings and completed credentials, questionnaires, by no later than August 29, 2014 in order to be considered for participation in the sale process.
The Firestone’s board has considered various strategic alternatives for its Botswana operations and, given the extent of the interest expressed in the BK11 mine, has decided to undertake a competitive disposal process,” said the company As of June 30, 2013, the combined tax loss in respect of the Botswana operations is estimated to be about P399 million ($45 million).
The BK11 mining license was granted in July 2010. Under the current BK11 mine plan approximately 11.5 million tonnes of kimberlite was planned to be mined at an average grade of 8.5 cpht, resulting in total production of approximately a million carats over a 10 year mine life.
Firestone began mining operations at BK11 during the third quarter of 2010.
In February 2012, BK11 began to experience technical problems in respect of the BK11 Treatment Plant’s ability to successfully liberate diamonds due to the absence of secondary and tertiary crushing circuits.
In addition to the BK11 mine, the remaining assets in the Botswana operations sale package include a 5 tonnes per hour (tph) bulk sampling plant, a 25tph pilot plant; a self-contained diamond recovery grease plant.
As a result of the disposal, Firestone delisted from the Botswana Stock Exchange last year.
With its focus shifted to the Lesotho operations, Firestone believes the BK11 can be viably run by a miner whose sole assets will be Boteti mine.
“The Board is of the view that its Botswana operations present a rare opportunity that has the ability to deliver strong returns under the ownership of an operator or operators for whom it would be a core asset.
The Mine has potential to substantially improve the yield from the BK11 treatment