Firestone to wrap up BK11 sale in 2015
Staff Writer | Friday October 3, 2014 11:06
Firestone started the development programme on the Liqhobong mine in late June after completing the project financing in May.
“As previously communicated to shareholders, the Board is considering various strategic alternatives for its Botswana operations and exploration portfolio, and commenced a formal disposal process in August 2014. We hope to conclude this process in 2015, thus allowing the management team to completely focus their attention on the successful completion of the Liqhobong Mine Development Project,” the company announced yesterday in a commentary.
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. The company 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 August, the company announced the appointment of Questco Pty Limited, to manage the sale process. Questco Pty Limited is a South Africa based corporate finance adviser with prior experience in the successful sale of other diamond assets in Sub-Saharan Africa.
As of June 30, 2013, the combined tax loss in respect of the Botswana operations was 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, 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.
Meanwhile, Firestone also narrowed its net loss to $11.2-million in the financial year ended June 30, from $22.6-million the year before.
Cash on hand at year-end was $107-million, compared with $4.1-million at the end of the prior financial year.