Firestone recovers 379 716 ct in H1

JOHANNESBURG (miningweekly.com) – Aim-listed Firestone Diamonds recovered 379 716 ct of diamonds from its Liqhobong mine, in Lesotho, in the six months to December 31.

CEO Stuart Brown said in a statement on Tuesday that commercial production at the mine had started on July 1 and that the operation recorded zero lost-time injuries over the first six months of full-scale production, with more than 5.3-million hours logged.

The company achieved revenue of $26-million for the six-month period, generated $8.8-million in cash from operations but posted a loss of $7.8-million.

The company had a cash balance of $29.7-million as at December 31, owing to the $25-million in equity it raised in December.

Firestone achieved a cash operating cost per tonne (including waste) of $11.97, and realised an average value of $74/ct. The company also unearthed a 134 ct gem-quality light yellow diamond during the six months under review.

Further, a total of 3.4-million tonnes was mined – 1.9-million tonnes of ore and 1.5-million tonnes of waste. The mine treated 1.9-million tonnes, ahead of the 3.6-million-tonne-a-year target. It also stripped 1.5-million waste tonnes, slightly ahead of the 2.8-million tonnes required by the revised mine plan in 2018.

The production plant operated above expectation, achieving an average throughput rate of 522 t/h, compared with an expected 500 t/h. The engineering department achieved a plant utilisation rate of 83%, ahead of the target of 81%.

“In the prior year, the grade increased steadily over the ramp-up period to the end of June 2017. During the half-year to December 31, the grade decreased, as expected, from 21.1 carats per hundred tonnes (cpht) in the first quarter to 18.8 cpht in the second quarter as a result of lower-grade ore blocks that were scheduled to be mined for that period.”

An increase in grade is expected in the second half of the current financial year as mining moves to the higher-grade ore.

“Since commencement of the mining operations in late 2016, a combination of lower-than-expected average diamond values realised at sale, and earlier waste stripping prompted a revision of the original 15-year mine plan.”

Firestone Diamonds gained approval for a revised mining plan based on maximising cash flow in the near term.

In February, after the reporting period, the company held its first sale of 2018 when 114 887 ct on offer were sold at an average value of $82/ct, realising total sale proceeds of $9.4-million, noted Brown.

“To address the lower-than-expected diamond values, we announced a revised mine plan at the end of the period, which is designed to maximise cash flow in the shorter term, while we address diamond value recoveries.

“With the strong retail season and the conservative sales volumes from all the major producers towards the end of 2017, we have seen a very encouraging start to 2018 for the rough market, with our first sale of the calendar year realising an average value of $82/ct.

“We look forward to updating shareholders in the next quarter on our diamond recovery initiatives and the improving market conditions for the diamond sector.”