Debswana Delays Jwaneng Tailings Project

| Monday September 6, 2010 00:00

 

Aim-listed Firestone Diamonds on Thursday informed shareholders that Debswana, which is a joint venture (JV) between De Beers and the government of Botswana, had decided to delay the implementation of the MTTP to focus its resources on existing projects at the Orapa and Jwaneng diamond mines.

In June, Firestone announced that it had been selected by Debswana to finance, build and operate the MTTP.The company noted that Debswana had assured it that the MTTP remained a strategically important project, which would be pursued when its other higher-priority projects were more advanced.

Construction of the project had been expected to start by the first half of 2011, subject to the conclusion of suitable financing for the required $55-million capital expenditure being arranged. Production had been scheduled to start in 2012.

The MTTP was key to Firestone's strategy of developing toll treatment opportunities to supplement its own mining operations, including its BK11 mine.

The Jwaneng plant had been expected to serve as a pilot facility to demonstrate the economics and capability of the modular plant concept on the Jwaneng tailings resource, which, if successful could have been deployed to other Debswana mines.

The MTTP would have contributed up to $150-million in toll treatment revenues for Firestone.

Firestone CEO Philip Kenny noted that the delay in the MTTP was disappointing, but said that the company would focus its efforts on the Liqhobong kimberlite project, in Lesotho, which Firestone would acquire if its proposed acquisition of fellow Aim-listed Kopane Diamond Developments goes ahead.

Shareholders of both Kopane and Firestone would vote on the proposed takeover on Friday, with the deal to be finalised by the end of September.

Firestone would also continue to pursue other toll treatment opportunities.

In March, the company had been selected as the preferred candidate to build and operate a new dredge and a 11,5-million-tonne a year floating treatment (FTP) plant for Namdeb, another De Beers subsidiary working in JV with the government of Namibia.

The FTP was expected to start production in 2012.Meanwhile, Firestone Diamonds says it has reached production targets ahead of schedule and recovered a high quality diamond at its BK11 Mine, raising its expectations for the average value of output at the mine.