Firestone Diamonds Share Discussion Threads

[varrirob] 06/8/2013 16:49

Buy - I will take anything going at the minute be it defensive, distressed or delirious, a buyer is a buyer and if it improves the share price i ain't going to complain. It won't make my loss look as bad for a start.

[buywell2] 06/8/2013 11:38

OK

It's brought out a defensive buyer .... at these fire sale prices

[andy] 05/8/2013 16:56

buywell,

Thanks for posting the charts!



Earnest,

Sadly I remember the excitement as the Sp approached £2 and stories were flying around about FDI having the "biggest kimberlite in the world"!

Sadly the finance needed to drill M1 was never going to be in their reach, but of course they didn't say that at the time.

[buywell2] 05/8/2013 15:45

SER flattened the FDI chart above


By itself it looks more scary

[earnestwipplethwaiteiii] 05/8/2013 15:26

Buywell - that last graph is astonishing: barring one blip, FDI spent three and a half years in the mid-2000s at well over £1 a share, approaching £2 twice. Shows just how wrong the market can be.

[buywell2] 05/8/2013 15:08

5 yr comparison FDI V SER



10 yr a bit different

[buywell2] 05/8/2013 14:55

The recent cash givers will have to buy more to protect their investment methinks

[andy] 05/8/2013 10:16

trying to post a comparison chart with SER, but HTML rusty.

Incredible but true! FDI have performed WORSE than SER!

Without seeing the chart I would not believe it.

[andy] 04/8/2013 19:50

Aye!

At least Scolaro created shareholder value, whilst FDI have just destroyed it!

I would back him in preference to current management any day.

[earnestwipplethwaiteiii] 04/8/2013 12:32

What price Franco Scolario making a bid at, say, 1p a share? What delicious irony that would be.

[andy] 02/8/2013 01:24

Valentine,

"What a pile of undiluted old cobblers and shinola."


And that's putting it very politely!

[valentine] 02/8/2013 00:41

What they haven't exceeded a billion? Consolidation next 20-1 and bingo they are back to 40p and another placing.
Don't worry be happy they have diamonds on the soles of their shoes..diamonds as big as yer fist that unfortunately ended up... £5 in three months I can assure you.. ..easy peasy..oh that was 2006 or thereabouts, and back to 80p in a month for a placing and then errr?
What a pile of undiluted old cobblers and shinola.

[andy] 02/8/2013 00:22

Here we go!

All resolutions passed, surprise surprise!

Application has been made to AIM for the admission of the 198,500,000 Placing Shares, with trading expected to commence at 8.00 a.m. on 2 August 2013. Following the Admission of the Placing Shares, the Company will have 745,352,396 Ordinary Shares in issue.


So that's a relief!

All salaries will continue to be paid in full, whilst the company continues to destroy shareholder value.

Any bets for when we exceed 1 billion shares?

[andy] 30/7/2013 09:44

Corrientes,

I totally agree.

Sadly FDI WAS made out to be attractive, and many people took a long time to see that the king really didn't have any clothes on, me included!

Credit where credit is due, it was marketed well............

[corrientes] 30/7/2013 08:56

I found out a long time ago,that developing a long term profitable diamond mine is substantially much more difficult to do than developing a base metal or gold mine. All the 'easy' concessions were taken years ago, and whilst there are always exceptions, I wouldn't dream of buying into a small diamond explorer/producer no matter how attractive its made out to be.

[andy] 30/7/2013 08:37

Probably the only way! :-(

I cannot see them being able to raise the capex required, but if they do pull it off, remaining shareholder value will be destroyed in the process, IMHO.

It will be presented as a fait accompli.

[buywell2] 29/7/2013 09:46

With a view to off-setting other Capital Gains ???

[andy] 24/7/2013 23:33

REsourceful,

What I would like them to do is take AT LEAST a 50% salary cut!
Then use some of the remaining salary to buy shares in the market each month.

I agree, there are no retail buyers because they have been fleeced in the past, and people have left never to return.

Again I agree, many do not realise the risks, but inaccurate or misleading information is often given to investors (talking generally here now M'lud!) which caused them to make a loss.

Again I agree, I will never invest in another diamond stock regardless of how good it is, period. FDI taught me some valuable lessons!

An example is when the then CEO stands up at the AGM and in answer to the question "are you fully funded to production", he responded, "yes, but we may need a little more".

What he really meant to say is that we will be doing a 50% dilutive financing in 6 weeks time at 50% of the current share price, because we can"

And then a few weeks later announces a takeover of another company with another hugely dilutive financing!

How can you invest in an environment like that?

[mr keeny] 24/7/2013 22:16

"Theyre already getting decent stones out of the ground"

No they are not, they are breaking the decent stones and are still unable to resolve the breakage problems despite countless funds and possible solutions being thrown at it over the last 18 months.

The unsuitable plant has produced approximately 274,577 carats, including fancies, since opening in September 2011 and achieved an average diamond price of US$86 per carat which is very poor in comparison to others in the country.

The plant currently in operation will soon be shut down and the company will stand idle until the much needed funding is obtained.

The company will not be around for much longer I think.

[madmonkflin] 24/7/2013 19:08

Diamonds arent risky but the country it operates in is. Theyre already getting decent stones out of the ground.

[resourceful] 24/7/2013 16:43

what do you want them to do
they got it wrong and continue to get it wrong
AIM is dying because there are no retail buyers
Retailers do not understand that high risk ventures fail most of the time
Diamonds are the highest risk

[andy] 22/7/2013 19:19

Nobody would believe it!

Shareholder value down the toilet year after year, and the CEO nets a large salary, pension, car, and a BONUS!!!

This is why the AIM is dying, IMO.

[andy] 20/7/2013 11:42

Mr K,

A very succinct article, thanks for posting it.

I still think the upgrade will not happen (postponed!) in the current financial climate, and as the figures quoted suggest, the numbers simply look too big, IMO.

I seriously doubt they could raise £23.9 million in the current market, on AIM, and not a hope in hell at 5p! So if that figure does need to be raised via equity, the dilution will be massive, IMO,and wipe out existing holders.

JUST IMAGINE IF THEY DID IT AT 2P!

[mr keeny] 19/7/2013 11:49

Hope the original poster does not mind me duplicating it over here but I found it to be a reasonable post over on iii regarding future funding from a poster named warnado1:

The company state -

"As announced on 25 October 2012, the definitive feasibility study for the Expansion Project estimates the initial capital expenditure to be approximately US$167 million (assuming an exchange rate of ZAR 8.92: US$1)"

But now "Whilst it is anticipated that the capital expenditure of the Group will be US$167 million, the Directors believe that this may reduce to approximately US$142 million due to the recent depreciation of the South African Rand"

Today the exchange rate is US$1 = ZAR9.91

The new today states that "A further substantial equity fund raise will be required to fund the Expansion Project but the Company is pursuing a number of additional funding alternatives to try and minimise the equity dilution for Shareholders. In particular, to coincide with the proposed subsequent fundraising, the Company has commenced project finance discussions, which if successful, could provide an estimated US$65-85 million, with financing in place by the fourth quarter of 2013".

Also they have secured "a smaller US$6 million forward sale agreement in relation to the Company's smaller diamonds and it is estimated that a further US$20-30 million could be received as a pre-payment for the future delivery of smaller diamonds".

Lets take to above HIGHER END FIGURES and use them to offset the revised CapEx of $142m -

$142m - $85m - $6m - $30m = $21m outstanding CapEx

Also lets take to above LOWER END FIGURES and use them to offset the revised CapEx of $142m -

$142m - $65m - $6m - $20m = $51m outstanding CapEx

Now lets average the two outstanding CapEx figures to add balance -

$51m outstanding CapEx + $21m outstanding CapEx / 2 = $36m outstanding CapEx.

Lets assume the average future funding requirements are met and the market generously view this as a positive and the share price leaps massively to 5p.

The $36m outstanding CapEx required will need raise via dilution. Therefore $36m = £23.9m / 5p = an additional 478m shares.

Sorry guys but, my opinion is that, given the fact that the pilot plant which continues to break stones will shut down "before the end of the calendar year" which will result in the company standing idle for a long period of time.

Also very concerning is the fact that cash burn seems to be very excessive despite sales. Cash at 31 December 2012 was £4.2m but now with the recent proposed placing of ($6m) $5.7 million (£3.77 million) (net of expenses) the Company will have cash resources of approximately $7.7m million (£5.09 million).

Even now despite the ever problematic pilot plant closing "before the end of the calendar year" they are prepared to waste an additional 27% ($2.1m) of their entire funds of $7.7m.

Unreal and a perfect example of how to destroy shareholder value.