Firestone to raise home-grown capital finance

| Friday April 9, 2010 00:00

The Botswana-focused miner, which is listed on the London Stock Exchange and is aiming for a secondary listing on the BSE, is in the process of developing the BK11 kimberlite project in Tsabong. 

'While we are disappointed not to have met our budget for BK11, we plan to finalise arrangements to ensure that the required funds are put in place as soon as possible,' the CEO of Firestone, Philip Kenny, said in a statement.

'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.'

Firestone Diamonds reported last Wednesday that its net loss grew by 24 percent to $2.1 million during the six months that ended on December 31, 2009. The diamond exploration company did not generate any revenue during the period, compared to $5.5 million for the previous year.

Kenny noted, however, that the company's BK11 kimberlite project was expected to commence production in the second quarter of calendar 2010, as the company submitted its mining licence application in the first quarter.

Kenny noted that the new mine would make Firestone one of only three kimberlite producers worldwide 'outside of the major mining companies'.

In addition, Firestone reported that its negotiations with Debswana regarding its operation of the Jwaneng Tailings project were expected to conclude soon. The company was also selected by Namdeb as the preferred supplier and operator for the dredge and floating treatment plant project at Namdeb's diamond mining operations on the southwest coast of Namibia.

'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,' Kenny said.

With most of Firestone's current operations now focused on Botswana and production due to start at the company's BK11 kimberlite in the second quarter of 2010, the company had been granted local asset status by the Non-Bank Financial Institutions Regulatory Authority of Botswana.

Firestone Diamonds has also identified a number of high interest kimberlites at the Orapa diamond field where it has completed a review of the kimberlites that form part of a joint venture (JV) with Tawana Resources.

Last December, the diamond miner and JSE-listed Tawana Resources entered into a JV agreement over eight kimberlite exploration and evaluation projects in the country in terms of which Firestone could earn up to 85 percent interest in these kimberlites.

Firestone conducted a review of the kimberlites, known as BK19 to BK26, which included historical exploration work done by De Beers, Tawana and other exploration companies on the kimberlites.