TIDMFDI
RNS Number : 2656U
Firestone Diamonds PLC
23 October 2017
23 October 2017
Firestone Diamonds plc
("Firestone", the "Group" or the "Company")
Quarterly Update on Operations
Firestone Diamonds plc (AIM: FDI) provides its quarterly update
on operations at its Liqhobong Diamond Mine ("Liqhobong") for the
quarter ended 30 September 2017 (Q1 of the Company's 2018 financial
year). Liqhobong is owned 75% by Firestone and 25% by the
Government of Lesotho.
Highlights for the quarter ended 30 September 2017
-- Plant operating at nameplate capacity;
-- Recovery of a 134 carat gem-quality light yellow diamond: the
largest diamond recovered to date which will be included in the
Company's next sale;
-- A total of 195,330 carats sold in the quarter, including the second >US$1 million stone;
-- Mining proceeding to plan and operations gradually extending
to mining more representative ore from the pit;
-- As at 30 September 2017, cash on hand was US$4.3 million;
-- 199,007 carats recovered at a grade of 21.1 carats per
hundred tonnes ("cpht") (FY 2017-Q4: 204,000 carats at a grade of
22 cpht); and,
-- Zero lost time injury record maintained with almost five million hours worked.
Stuart Brown, Chief Executive Officer, commented:
"Production for the quarter has been very stable, we ended the
quarter slightly above all our anticipated production targets.
While the previously announced average value per carat was somewhat
disappointing this is reflective of the combination of the lower
than expected occurrence of better quality diamonds recovered
during the quarter, the widely reported current market conditions
where sales are weaker in the finer sizes and weaker demand due to
the time of the year.
"We have started moving to other areas in the pit and as
expected, we have seen the start of some improvement in average
value per carat recovered. However, as highlighted in previous
announcements, mining will progress into all areas of the pit in
time and it will be some while before more representative volumes
of all the ore types are mined and we can better establish our
revised average value per carat for planning purposes. As with many
diamond deposits, the average value realised per carat may continue
to show significant variability on a sale by sale basis.
Pleasingly, the quarter ended on a highlight with the announcement
of the recovery of our second plus 100 carat stone at the end of
September."
Operations
In the quarter ended 30 September 2017, Liqhobong treated
944,582 tonnes of ore, at an average of 507 tonnes per hour.
199,007 carats were recovered during the quarter. Included in this
was the largest diamond recovered to date, a 134 carat light yellow
stone, as well as 45 specials (larger than 10.8 carats). This
compares to 54 specials in the previous quarter.
Mining is proceeding to plan and Firestone is gradually
extending operations to additional areas in the pit. Management
expects to be able to fully optimise operations as more detailed
knowledge of the pit is acquired over the coming months, and as
previously announced is working on the details of a revised mine
plan which will be published in due course.
Health & Safety
At the end of the quarter, Liqhobong maintained its outstanding
health and safety record, having reached almost five million man
hours worked without a single Lost Time Injury since the start of
the project.
Financial
Despite local currency strength against the US$, Firestone
reports cost per tonne treated including waste stripping at US$12.2
per tonne treated which is at the lower end of guidance. This cost
is expected to rise as waste stripping increases over the remainder
of the year.
Cash available at the quarter end was US$4.3 million with a
further US$10.0 million available under the standby facility.
During the quarter Liqhobong made its third ABSA bank repayment of
US$ 5.5 million, which included US$0.8 million of interest.
Firestone continues to work to finalise the new mine plan based on
a revision of the expected average life of mine value per carat
which it anticipates will be higher than the average value realised
at the two sales reported for this quarter. With this in mind,
Firestone continues to have positive discussions with both its
major shareholders and its debt provider, ABSA Bank Limited, to
reach a financing solution.
As previously advised, Firestone will update the market further
once those discussions are complete and the revised mine plan is
agreed, which is expected to be in Q4 CY2017.
Diamond Sales
A total of 195,330 carats were sold in the quarter including
Liqhobong's second >US$1 million stone, a 45 carat clean white
stone. The sales this quarter achieved an average value of US$69
per carat, yielding proceeds of US$13.5 million. Since commencement
of production in Q4 CY2016, Firestone has sold all 505,706 carats
recovered, for US$41.3 million, at an average value of US$82 per
carat.
The overall market environment has seen a combination of
oversupply and the previously reported Indian de-monetisation
programme which is still having an impact on the Run of Mine goods
(+11 diamond sieve and smaller). In addition, the summer months are
traditionally the quietest time in the rough selling season. In the
medium term, the Board expects market conditions to improve.
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR").
For more information contact:
+44 (0)20
Firestone Diamonds plc 8741 7810
Stuart Brown
Macquarie Capital (Europe) Limited +44 (0)20
(Nomad and Broker) 3037 2000
Raj Khatri
Nick Stamp
Nicholas Harland
Tavistock (Public and Investor +44 (0)20
Relations) 7920 3150
Simon Hudson +44 (0)7788
Emily Fenton 554 035
Jos Simson
Barney Hayward
Background information on Firestone
Firestone is an international diamond mining company with
operations focused in Lesotho. Firestone commenced commercial
production in July 2017 at the Liqhobong Diamond Mine in
Lesotho.
Lesotho is emerging as one of Africa's significant new diamond
producers, hosting Gem Diamonds' Letseng Mine, Firestone's
Liqhobong Mine and Namakwa Diamonds' Kao Mine.
For more information please visit:
www.firestonediamonds.com.
**ENDS**
This information is provided by RNS
The company news service from the London Stock Exchange
END
UPDPGGWAUUPMGMP
(END) Dow Jones Newswires
October 23, 2017 02:00 ET (06:00 GMT)
Firestone Diamonds (LSE:FDI)
Historical Stock Chart
From Apr 2024 to May 2024
Firestone Diamonds (LSE:FDI)
Historical Stock Chart
From May 2023 to May 2024