Firestone Diamonds plc Preliminary announcement of results

Firestone Diamonds plc Preliminary announcement of results

The Board of Firestone Diamonds plc, the AIM-quoted diamond mining and exploration company, announces preliminary audited results for the year ended 30 June, 2011.

HIGHLIGHTS

Liqhobong Mine, Lesotho

Acquisition of Kopane Diamond Developments plc

 

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Acquisition completed in September 2010

 

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91 Mt resource identified at an average grade of 34 cpht; contains 31 million carats with a gross value of $3.4 billion

Production Plant 1

 

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Grades and diamond quality from initial production in line with expectations

 

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Plant capacity expanded to 0.65 mtpa and further expansion in progress

 

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Q1 FY2012 production increased 551% from Q3 FY2011, to approximately 34,000 carats

 

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Expected revenue of approximately $45m pa, when full production capacity reached in Q4 FY2012

Production Plant 2

 

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Planning for Plant 2 now at an advanced stage, with target capacity of 4.2 mtpa and annual production of $135m

 

BK11 Mine, Botswana

Mining

 

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Mining licence granted in July 2010

 

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11.5 Mt of kimberlite to be mined at an average grade of 8.5 cpht

 

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Pre-stripping of overburden and low grade kimberlite completed in Q2 FY2012

 

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Mining operations progressing well, with pit deepened to 50 metres

 

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Sampling from base of the mining pit indicates grades of 8-10 cpht, in line with resource grade

Production

 

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New secondary crushing circuit has significantly improved diamond liberation; circuit to be placed in line with scrubbing and DMS circuits in November 2011.

 

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Q1 FY2012 production increased 80% from Q3 FY2011, to approximately 4,500 carats

 

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Significant increase in production expected as production increases to full operating capacity of 1.5 mtpa in Q4 FY2012

 

Botswana Evaluation Projects

Prospecting licences granted over Kokong kimberlite field, containing 68 kimberlites

Firestone now holds prospecting licences containing a total of 174 kimberlites in Botswana, of which 43 are diamondiferous

Potential for economic kimberlites to be identified is very good

 

Rough diamond market and diamond sales

Four diamond sales held at the Company's tender office in Botswana since December 2010

Prices increased to record highs in the first half of 2011, but have recently fallen back, primarily due to uncertainty in international financial markets

Fundamentals remain positive, with demand from China and India and shortfall in supply expected to continue to support prices in the long term

 

Financial & Board

Financial

 

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£13 million raised in December 2010 and £13.5 million in August 2011 from share placements

 

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$6 million credit facility established with Standard Chartered Bank of Botswana

 

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Financial position secure, with $15m in cash and $3m in diamond stocks as of October 2011

Board changes

 

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Philip Kenny appointed as Executive Chairman and Tim Wilkes appointed as Chief Executive Officer during the year

 

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New Finance Director and Non-executive Director appointed

Outlook

Significant increases in production from BK11 and Liqhobong during FY2012

Rough diamond prices to recover in 2012 driven by long term shortfall in supply.

Target production level of 1 million carats pa by 2014

 

 

Tim Wilkes, CEO of Firestone Diamonds, commented: "The past year has seen Firestone move into a select group as one of the few listed kimberlite producers worldwide.  We expect to see significant increases in production from the Liqhobong Mine in Lesotho and the BK11 Mine in Botswana in the current year.  Firestone's prospects are now better than at any time in its history and the Company is well positioned to reach its target of producing 1 million carats per annum by 2014."

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