Firestone Diamonds Reports Strong Production in Q4 2018

Firestone Diamonds Reports Strong Production in Q4 2018

Firestone Diamonds plc reported an exceptional operational performance that resulted in several new production-related records at its Liqhobong Diamond Mine during the quarter ended 30 June 2018 (Q4 FY 2018).Liqhobong is owned 75% by Firestone and 25% by the Government of Lesotho.

Releasing its update for the quarter, the Company said that recoveries were 36.8% higher than Q3 at 263,512 carats, resulting in a full year total of 835,832 carats. This was as per the guidance for the year of between 800,000 and 850,000 carats.

Recovered grade of 25.7 carats per hundred tonnes was also higher than the 22.2 cpht in Q3 and 22.0 cpht for FY 2018, while total tonnes treated at 1,025,647t during the quarter were 18.0% higher than Q3, resulting in a full year total of 3.8 million tonnes, ahead of guidance of 3.6 mt.

During the quarter, 114 special stones (plus 10.8 carats) were recovered (Q3: 93 stones) which,Firestone said, was encouraging although, overall, the average quality still remained somewhat below expectation with the recovery of fewer valuable stones.

Firestone also reported that a total of 261,985 carats were sold in the quarter (Q3: 217,380 carats), realising revenue of US$18.6 million (Q3: US$17.6 million) at an average value of US$71 per carat (Q3: US$81 per carat) mainly due to a larger proportion of run of mine diamonds and fewer valuable stones cash increased by $2.5m in the quarter to $27.8 million.

Paul Bosma, Chief Executive Officer, commented:”The fourth quarter saw record production. We were able to access the high grade blocks in the mine plan and thanks to excellent operational performance we were able to achieve record carat recoveries. The increased volume translated in an improved cash position at the end of the financial year.

Stating that the average dollar per carat achieved is highly sensitive to the incidence of special stones, of which there was a lower incidence in this particular quarter, Bosma added, “However, we continue to have grounds for optimism given the parts of the orebody we plan to exploit over the next 12 months. We recently completed a structural and geotechnical assessment of the pit and the outputs are now being used to rerun our life of mine plan. We look forward to updating the market in this respect during the first half of FY 2019.”

The Company said that as announced in December 2017, it is pursuing a revised mine plan with the objective of delivering the best returns in the medium term at low risk whilst at the same time retaining the optionality of taking advantage of the longer life of mine potential of the orebody should realised diamond values increase or should there be a sustained improvement in market conditions.

The Company continues to mine according to the most recent mine plan which was announced in December 2017. During FY 2019, the Company plans to treat between 3.6 and 3.8 mt of ore and expects to recover between 820,000 and 870,000 carats.

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