Firestone Diamonds

From Yahoo news, 29/12/03

Chief Executive of Firestone Diamonds sees Black Empowerment opportunities within South Africa

PHILLIP KENNY, is the Chief Executive of Firestone Diamonds

TWST: Can we start with a historical sketch of your (FDI.L) company?

Mr. Kenny: Firestone Diamonds (LSE: FDI.L - news) is a UK based company, quoted on the AIM market of the London Stock Exchange (LSE: LSE.L - news) . Firestone has been involved in the diamonds business since 1994, but the background to our company actually goes back a lot further than that. My father, Jim Kenny, who is Chairman of Firestone and I have been involved in the natural resources sector for many years. We saw an opportunity to get involved in South Africa in 1994, when the first democratic elections took place and the ANC Government came to power. As you may know, the sanctions which had been in place against South Africa during the years of apartheid had resulted in little or no foreign investment coming into South Africa. So, unlike countries like Australia, Canada, and the US where there were many junior companies exploring for gold, base metals, diamonds, etc. there had been very little junior exploration activity in South Africa. We took the view that not only would the diamonds business be a good business to get into, but that it was a good time to start looking at South Africa. We are focused on diamond mining and exploration and currently have operations in two countries in Africa - Botswana and South Africa. Most of our operations are, in fact, focused in South Africa on the West Coast in area known as Namaqualand, which is the largest alluvial diamond producing region in the world. We are also exploring for diamonds in Botswana which is the world's leading diamond producer.

TWST: When we last talked, you had the Avontuur mine and it was expected to help finance further projects; has that gone according to plan?

Mr. Kenny: The Avontuur mine is still going well. We've just recently completed a major upgrade to our processing plant at Avontuur which will allow us to go into double and eventually, triple-shift operation. Cash flows from Avontuur have financed a lot of our exploration in South Africa, but they've also financed the development of the Oena Mine, which we started work on in 2001. We are just about to go into development of our third mine, a mine called Bonte Koe, which is located midway between our two existing mines. This will be the first project we will undertake through our recently announced "black empowerment" joint venture. One of the major political initiatives in South Africa, in recent years, has been a drive to include more black South Africans in South African industry in general and specifically in the mining industry. Earlier this year Firestone announced a joint venture with a South African group called African Star Investments, which is headed by Franklin Sonn, who was the first ambassador from South Africa to the US after the 1994 elections that brought the ANC to power for the first time. This is very much a strategic initiative for us because we believe there will be a lot of new opportunities coming into the market in South Africa, driven by these new government policies which are causing a lot of restructuring in the South African mining industry. It's very much a strategic focus for us and the Bonte Koe Mine will be developed through our "black empowerment" joint venture, African Star Minerals, in which Firestone holds a 75% interest and our empowerment partners 25%.

TWST: Have you yielded any mines from the Groen River Valley?

Mr. Kenny: We've made a lot of progress on the Groen River since we last spoke. We have substantially increased our area under exploration. We've done a lot of drilling and sampling work, which has confirmed the potential of the area and we believe we are very close to being able to determine where the greatest economic potential is located. We remain convinced of the potential for the Groen River valley as a region to host multiple commercial mining operations.