Firestone on track to meet FY guidance despite subdued environment

Aim-listed Firestone Diamonds on Monday reported that it had treated 1.9-million tonnes of ore in the six months to December 31, in line with the company’s full-year guidance of between 3.6-million tonnes and 3.9-million tonnes treated.

In a quarterly operations update for its Liqhobong diamond mine, in Lesotho, Firestone noted that 884 252 t of ore were treated in the quarter, lower than the first quarter’s figure of just over one-million tonnes of treated ore, owing to unscheduled repair work being undertaken on one of the scrubbers in November.

However, the recovery of 224 947 ct of diamonds brought the year-to-date total to 465 680 ct, which places the company on track to meet its output guidance of between 820 000 ct and 870 000 ct for the full-year.

The overall grade for the second quarter, ended December 31, was 25.4 carats per hundred tonnes (cpht) and 24.6 cpht for the year to date.

Other highlights include Firestone having sold 191 735 ct of diamonds in the second quarter, thereby realising revenue of $13.9-million.

CEO Paul Bosma said Firestone had had a “reasonable second quarter”, barring a scrubber failure in November, and ended the interim period with all of the company’s production parameters on track to meet its full-year guidance.

He lamented, however, that the demand for the smaller, lower-value stones had deteriorated further during the quarter, albeit having stabilised at the December sale and remained at the same level for the January sale.

“Pleasingly, the demand for larger, better-quality stones remains strong as was evidenced by the pricing received for the 46 ct white stone that was sold during the first sale of 2019,” Bosma enthused.

Meanwhile, during the current rainy season, Firestone’s mine plan provides for mining the northern high-lying lower-grade ore blocks, mainly from the K2 kimberlite facies. The company intends to use the opportunity to monitor any changes to diamond assortment.

Further, Firestone’s life-of-mine work showed the potential of further openpit expansion at the Liqhobong mine.

On Monday, the company said that it still had another two years before enacting a final decision on the optimal Cut Three mine design, which would mainly be driven by diamond prices and price growth assumptions.

Despite the continued subdued conditions at the lower value end of the market, the mine remained cash flow positive after finance costs for the quarter.