Firestone Diamonds revises Liqhobong mine plan to yield better results

JOHANNESBURG (miningweekly.com) – Aim-listed Firestone Diamonds, which sold 156 942 ct of diamonds recovered at its Liqhobong mine, in Lesotho, in the quarter ended December 31, has adopted a revised mine plan to increase cash flow in the short term, while resolving issues that affect the value of recovered diamonds.

Diamonds were sold at an average of $80/ct in the December quarter, compared with $69/ct in the quarter ended September 30.

Recoveries at the mine were slightly lower than in the September quarter, at 180 709 ct, resulting in a year-to-date total of 379 716 ct.

“There is cautious optimism on diamond pricing in 2018 after positive initial year-end retail numbers out of the US and China. Despite the recovery of fewer carats in the period, grades are expected to improve in the second half [of the financial year] as mining moves to higher-grade areas of the pit,” CEO Stuart Brown said.

During the quarter, 80 special diamonds – larger than 10.8 ct – were recovered, compared to 45 in the first quarter. While pointing out that this was pleasing, Firestone Diamonds noted that, overall, the average quality remained somewhat below expectation.

Despite local currency strength against the dollar, cost per tonne of ore treated, including waste stripping, was reduced to $11.60/t, with Brown pointing out that management would continue to manage costs as well as possible, given the operational constraints.

“With the stronger local currency, cost per tonne is expected to increase over the second half of the year. Liqhobong’s revised mine plan’s objective is to deliver the best returns in the medium term at low risk, while, at the same time, offering optionality of taking advantage of the longer life-of-mine should the average diamond values increase or should there be an improvement in market conditions,” the company highlighted.

The revised plan is over a shorter nine-year period and involves the stripping of 76-million fewer waste tonnes.

A far more representative area of the pit would be mined over the next 18 months, which could improve the likelihood of recovering higher-quality stones and, in turn, provide a truer representation of diamond quality and pricing than has been possible from production to date.