Firestone Diamonds PLC Recovery of type 2B blue diamond and 2A diamonds (7417O)

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RNS Number : 7417O

Firestone Diamonds PLC

16 October 2012

16 October 2012

Firestone Diamonds plc

Recovery of a rare type 2B blue diamond and type 2A diamonds

The Board of Firestone Diamonds plc, ("Firestone" or the "Company") (ticker: AIM: FDI), the AIM-quoted diamond mining and exploration company, is pleased to announce that one small type 2B blue diamond and 28 type 2A diamonds have been recovered at the Company's flagship asset, the Liqhobong mine in Lesotho.

Highlights

Liqhobong Mine, Lesotho

   --     Rare type 2B blue diamond recovered; 
   --     Recovery of 28 type 2A diamonds; 
   --     Significant increase in the colour and quality of the diamonds at Liqhobong; 
   --     Fragments of >200 carat diamond recovered. 

Whilst preparing the diamonds for the pending tenders in Gaborone and Antwerp, one small type 2B blue diamond and 28 type 2A diamonds were identified by the Company's independent diamond valuation consultants. The identification of a blue diamond, albeit small, is significant and confirms that the Liqhobong mine's diamond assortment is diverse and is, to date, relatively untested in terms of its ability to produce diamonds of high quality and size. The recovery of type 2A diamonds within the Liqhobong assortment is highly significant as these diamonds occur predominantly as high quality, high colour crystals and are extremely rare.

The world's diamond production comprises approximately 98 per cent. of type 1A diamonds whilst less than 2 per cent. of the known kimberlite resources produce the high quality, white and colourless type 2 stones.

The type 2 diamonds recovered from Liqhobong in August and September 2012 were identified by the Company's independent valuation consultants, First Element (Pty) Limited ("First Element"). The CEO of First Element, Johan Erikson stated that; "the identification of the type 2 diamonds and the increase in colour, shape and quality at Liqhobong is very exciting. The increased recovery of unbroken, higher quality good colour crystals in the middle and coarser size fractions currently on tender should bolster the prices of the Company's stones."

Furthermore, the Company reports that a 27 carat, fragmented stone was recovered in September 2012, and when reconstructed appears to have originated from a stone in excess of 200 carats. Although the Company has recently made modifications to the Pilot Plant, in order to reduce breakage of diamonds in excess of 100 carats, the pilot plant is not able to recover diamonds with dimensions bigger than 25mm, such as the stone in question.

The Chief Executive Officer of Firestone, Tim Wilkes commented; "the recovery of the rare type 2 diamonds and the increase in quality and the variety of colour endorses the directors belief that the Liqhobong resource contains significant upside, which will be fully realised once production is increased via a much larger, fit for purpose treatment plant." He added; "the increase in quality and the potential for very large stones to be recovered through an expanded treatment plant is extremely exciting and demonstrates the value the Company is gaining from the current pilot plant operation."

Since commencing production via the pilot plant in June 2011, the Company has continued to recover significant quantities of vivid and yellow fancy diamonds, two small, light pink diamonds and a number of high quality white stones and can now confirm the presence of rare type 2 diamonds.

The Company is finalising its Definitive Feasibility Study, which aims to expand the current production of 200,000 carats per annum via the existing pilot plant, to over 1,000,000 carats per annum by 2015 through a fit for purpose treatment plant which has been designed to cater for the large diamonds that are present. The results of the study are to be released in late October 2012.

For more information contact:

Tim Wilkes, Firestone Diamonds [phone]/[phone]

Rory Scott, Mirabaud Securities (Broker) [phone]

Robert Beenstock, N+1 Brewin (Nominated Adviser) [phone]

Jos Simson / Emily Fenton, Tavistock Communications [phone]/[phone]

Background information on Firestone Diamonds:

Firestone Diamonds plc is an international diamond mining and exploration company with operations focused on Lesotho and Botswana. Firestone currently operates the Liqhobong Mine in Lesotho and is also one of the largest holder of mineral rights in Botswana's diamondiferous kimberlite fields, controlling approximately 5,000 square kilometres including prospecting licenses around the major Orapa mine, as well as the entire Kokong and Tsabong kimberlite fields. In addition to Liqhobong and BK11, Firestone has 108 kimberlites in its portfolio, of which 30 have been proven to be diamondiferous to date.

Lesotho is emerging as one of Africa's significant new diamond producers, and hosts Gem Diamonds' Letseng Mine, Firestone's Liqhobong Mine as well as Namakwa Diamonds' Kao Mine and the Mothae development project.

This information is provided by RNS

The company news service from the London Stock Exchange

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