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Firestone Diamonds sees losses widen but remains confident of prospects

13 November 2009

Philip Kenny, the chief executive of Firestone Diamonds today expressed his confidence in the future prospects for the company as prices in the rough diamond market continued to recover from their recent lows.

The South Africa and Botswana based miner is currently working towards making a mine development decision on its BK11 kimberlite project in Botswana before the end of 2009. It is also looking to sign an agreement with DeBeers’ Botswana arm, Debswana, on its Jwaneng tailings project during 2010.

During the year, Firestone’s revenues increased by 22% to £4 million. However substantial impairment charges of £11.2 million relating to its South African alluvial assets meant that pre-tax profits increased to £10.8 million from £0.3 million last year.

At BK11, where Firestone holds an 80% stake, there is an inferred resource of 12 million tonnes defined, containing approximately 830,000 carats. The project is just 5km away from the AK6 project, which is being run by John Teeling’s African Diamonds and its new partner, Lucara, which is backed by Canada’s Lundin Group.

The final phase of evaluation on the site is underway and the development costs are fully funded following a £7.2 million placing by Firestone in July this year.

At the Jwaneng tailings project, Firestone was selected as preferred bidder in April. The prospecting licences on the project surround the world’s biggest diamond mine at Jwaneng and are considered prospective for the discovery of new diamondiferous kimberlites. Here, the company is planning to begin initial production of 2 million tonnes per year from 2011.






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