Firestone Diamonds (FDI-LN),
The company recovers its first diamonds from the Liqhobong Diamond mine in Lesotho, owned 75% by Firestone and 25% by the Government of Lesotho.
Initial recoveries are as expected and confirm presence of fancy yellow diamonds. Commissioning is 96% complete.
Waste stripping is on target and ramp-up to commercial production has commenced. Full production rates of 3.6m tonnes per annum (1m carats), expected to take at least 6 months.
Full year production guidance for year-end June 2017 remains at 1.8 – 2m tonnes treated and between 380k-450k carats recovered. Full year costs are projected to be US$12-US$14 per tonne processed.
All major construction activities were completed by the end of September 2016 and the plant was 91% commissioned, well ahead of revised target of 50%. The project remains within the original budget of US$185.4m.
First Diamond sale to take place in Antwerp in January 2017. The company expects to host two sales per quarter with the increase in production through the ramp up phase.
Cash on hand at the end of September was US$4.6m. The company also had a US$29m ABSA debt facility resulting in forecasted headroom of US$9m. This does not include a US$15m standby facility.
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.