Firestone Diamonds plc – Mining licence granted and production commenced at BK11 diamond mine

Firestone Diamonds plc – Mining licence granted and production commenced at BK11 diamond mine

Firestone Diamonds plc, the AIM-quoted diamond mining and exploration company (FDI), is pleased to announce that following the granting of a mining licence for the BK11 kimberlite in Botswana to the Company’s 90% owned subsidiary, Monak Venture (Pty) Limited (“Monak”), commercial production has commenced at the mine.

HIGHLIGHTS


Mining licence granted

  • Valid for 12 years to 30 June 2022
  • Standard diamond royalty of 10%
  • Standard mining company corporation tax
  • Unlimited carry forward of tax losses and 100% depreciation of capital expenditures
  • No government equity participation
  • Production to be sold by open tender in Botswana; tenders can also be held outside Botswana up to 2013, with possible extension to 2015

Commercial production commenced

  • Phase 1 production plant (650,000tpa capacity) now in operation
  • Phase 2 production plant (850,000tpa additional capacity) targeted for completion on schedule in Q3 2010
  • Mine plan of 11.5 Mt of kimberlite at average grade of 8.5 cpht and diamond value of $155/carat
  • Expected 10 year mine life

Orapa satellite kimberlites

  • Company has 20 other kimberlites in the Orapa area, of which 13 are proven to be diamondiferous, and BK16 is the most advanced
  • Evaluation of satellite kimberlites to commence once BK11 is in full production

Philip Kenny, CEO of Firestone Diamonds, commented: "The commencement of production at BK11 is a major milestone for Firestone as the company is now one of only three kimberlite producers worldwide outside of the major mining companies.  It is an exceptional achievement to have reached this point in just over 3 years from being granted a prospecting licence, which is a reflection of the significant capability of our management and staff in Botswana and South Africa.  The combination of cash flow from production at BK11, an extensive portfolio of kimberlites in the Orapa and Tsabong kimberlite fields and exciting toll treatment opportunities positions Firestone very well for significant growth in Botswana, and with the substantial shortfall in rough diamond supply projected in the coming years we are confident about Firestone’s future prospects.”

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