Firestone poised to become a bigger diamond producer

Brian Benza
Staff Writer | Friday November 26, 2010 00:00

The group, which started production at its BK11 mine in Orapa four months ago, said losses before tax narrowed to P25 million (£2.4m) for the year ended 30 June 2010 from a loss of P114 million (£10.8m) a year earlier.

Revenue fell to £3,000 from £4m earlier.

'We are confident that the target of producing 1m carats per annum by 2014 is one that the company is now well positioned to reach,' the group said in a statement.

Firestone, which is expected to list on the Botswana Stock Exchange (BSE) soon, also has mines in Lesotho.

Philip Kenny, CEO of Firestone Diamonds, commented: 'The past year has been a transformational one for Firestone.  With the commencement of production at BK11 in Botswana in July 2010, Firestone became one of only three juniorlisted kimberlite producers worldwide. The acquisition of Liqhobong in Lesotho in September 2010 gave Firestone control of one of the most attractive undeveloped kimberlites in the world. 

'Together with our extensive portfolio of kimberlites in the Orapa and Tsabong kimberlite fields in Botswana and the significant shortfall in rough diamond supply projected in the coming years, Firestone is now very well positioned to become a significant diamond producer,' he said.

It added, 'With Firestone planning to be producing at both BK11 and Liqhobong in 2011, an exciting portfolio of projects to evaluate in Botswana, and the continued positive outlook for the rough diamond market, we believe that the prospects for Firestone are brighter than at any time in the company's history.'

The company says it also expects its BK11 production plant to 'comfortably exceed' its targeted capacity of 1,5 million tonnes a year by the fourth quarter, at which time the diamond miner also plans to hold its first diamond tender in Botswana. Firestone said newly-appointed chief operating officer Tim Wilkes is expected to join the board shortly and a number of candidates have been identified for the finance director position.

The company has been granted 'Local Asset Status' by the Non-Bank Financial Institutions Regulatory Authority of Botswana. According to Firestone, with its 'Local Asset Status' and the pending BSE-listing, Botswana-based institutional investors have a significantly improved ability to invest in the company. 

According to Firestone, with over 25, 000 square kilometres around the major Orapa and Jwaneng mines and the entire Tsabong kimberlite field, it is the largest holder of mineral rights in Botswana's diamondiferous kimberlite fields.

In addition to BK11, Firestone controls 21 other kimberlites in the Orapa kimberlite field, of which 13 have been proven to be diamondiferous, and 86 kimberlites in the Tsabong kimberlite field, of which 16 have been proven to be diamondiferous. The Company believes that the likelihood of further economic discoveries being made in these kimberlites is very good. While Liqhobong and BK11 will be the Company's primary focus in 2011, Firestone intends to use cash-flow from its mining operations to evaluate these kimberlites with the objective of identifying additional resources that can be developed and brought into production.

The Company also intends to continue to pursue toll treatment opportunities such as the Jwaneng tailings projects with Debswana, although implementation of this project was delayed by Debswana in September 2010.