Firestone Diamonds Share Discussion Threads

[andy] 30/9/2017 17:42

Potter,

Yes, hard to say how low it could go, so possibly an average down opportunity.

[pottermagic2310] 30/9/2017 17:17

The only option is to average down and hope better Diamonds are recovered sooner rather than later and very consistently over time

[andy] 30/9/2017 10:38

Phoenixs,

Thanks for that industry summary, and I know it's your area of expertise, so the information is extremely useful.

The state of the diamond industry is clearly not a pretty picture, in fact it sounds worse than I thought, I wasn't aware of the other Indian bankruptcy in the USA.

You have to wonder why FDI are not doing more to increase production in the area where they might find some larger stones, the lack of them is probably contributing to the falling share price. They have talked them up so often, but are not producing any, and after so long people start becoming cynical.

People seem to be losing faith, again!

[andy] 30/9/2017 10:31

potter,

The bid is just 19p! I always value my holding on the bid price rather than mid, as that is the price one can sell at.

I have been waiting to add, and was tempted when 30p was breached, but did not jump in due to poor news emanating from the diamond industry.

With a market cap of £62 million even now, there could be a way to fall yet, I'm now waiting for industry news to become more positive, and that could take a while....

[pottermagic2310] 29/9/2017 19:03

19.5p !!!
:-(

[phoenixs] 29/9/2017 14:50

Andy,

I think that you well be proved right. Unfortunately there has been another $100m bankruptcy in the US, an Indian company called EXELCO. This follows on from another i India at the beginning of August for the same sort of figure. The Indian holidays are fast approaching now, 19th October, and accounts are settled by this date. After the holidays more will be known about the diampnd industry's wellbeing.

Prices for tenders have dropped and I fear that they will drop further for a number of reasons:
1) Banks are no longer willing to finance, they have lost a great deal of money and in some cases fraudulently. The rough dealers are loaded with stock and some are desperate to raise cash but they cannot because there are no buyers the levels at which they have the diamonds in stock.
2) The sentiment for diamonds is negative at present and I see no respite for some months
3) De Beers (now Anglo) and the Russians are only interested in the bottom line. They do not support the industry as De Beers used to some years ago.

So the prognosis is not good. Firestone have to either weather the storm and/or produce some large stones which high vales.Otherwise they could be in deep s..t

[superg1] 29/9/2017 11:56

cash-chip

Not really if you followed the diamond market and the low grades they were processing it was highly predictable and was mentioned in posts along the way.

Doing lower grade sections was always going to knock the $ per carat down.

55p was too high and said as such at the time as the market would hit this when the lower $ per carat was reported and the India and diamond market situation was there for all to see.

In fact some of us posted saying the tenders would not go well.

The mining plan and the diamond market was always going to knock the share price back hard from 55p.

Quite clearly what they need to do is get on the high grade areas but I don't understand why they need to go through a consultation discussion to say "dig there". Just get on with it.

The diamond market will go through a trough some will get weeded out by which time FDI should be on the higher grade areas and hopefully hit some big stones.

The point I haven't looked up is the cash circs as they stand at this point which may a reason for delay in the "dig there" obvious solution.

[andy] 29/9/2017 11:56

Potter,

I think the opportunity to buy in at a lower price is a bolt on certainty after this RNS!


What price a placing given the current state of the diamond market and the lack of large stones mined by FDI so far?


Market cap is still £70 million!

[pottermagic2310] 29/9/2017 10:17

Sort of happy with this and sort of happy to be able to pursue an opportunity in the near future to buy-in again at a lower share price .. I think ?

[astjgroom] 29/9/2017 09:22

Why don't they go n mine the anticipated better yield than continuing with the low grade then, surely if it's affecting volume n quality to the degree they need to raise capital they should concentrate on finding the best stones?

[andy] 29/9/2017 08:40

This is the key sentence in the RNS:


"It should be noted therefore, that at current values, the Company would require additional financing and would need to restructure its existing debt obligations in order to be able to deliver such a revised mine plan".


That doesn't read too well, and at the current market cap there is room for some further erosion in share price IMO.

My top up will have to wait.

[abtwo] 29/9/2017 08:28

They seem to be confused re diamond value and size - they are not always related and it is the exception that they increase together.

From the RNS : "The Board anticipates an improvement in the occurrence of higher quality diamonds as the higher grade kimberlite areas are mined and treated."

In fact their own Technical Report shows most of what they have been mining (K2 unit) has the same carat value the K5 unit which is where they hope the big stones are.

What they hope is that the K5 will have random high quality large stones that will result in the average diamond price being higher. In fact this is built into their diamond price estimates as they extrapolated known data to the >10ct to 100ct sizes.

[superg1] 29/9/2017 08:11

All to be expected with them mining lower grade and the current circs of the diamond market.

Should look a lot better when they do the higher grade and hit the big stones hopefully with better market circs.

[earnestwipplethwaiteiii] 29/9/2017 07:27

Sobering RNS today - looks like a round of funding coming.

[superg1] 22/9/2017 12:23

It will sort itself at some point. It was brewing as well all know. The bankruptcies have been talked about for some time. I suppose it depends on what stocks of diamonds there may be out there on the cheap as the liquidations spin through.

[tanelorn] 21/9/2017 16:19

Hi superg1,

Yes unfortunately i knew the reports, although some areas are holding well:

I've reached the opinion, that by the time it's in the news, the price is already built in?.

The company has taken steps to use the weak market as an appropriate time to tackle the civil works on the mine face. There's going to be a lot of reading in the 'year end report' and additional mining plan, due Oct to Dec, but i guess before the AGM, maybe meet some posters there !?.

There are lots of large players who may decide that a diamond mine valued at 90M is worth a takeover.

[pottermagic2310] 21/9/2017 14:38

Definitely looking at a "buy-low and hope for sparklier days" scenario forming.

[andy] 21/9/2017 13:57

superg1,

Thanks, not what we want to hear but better to be aware of it.


The falling share price tells its own story really, I guess those in the know have been selling / reducing.


I'm looking to buy more but happy to wait patiently

[superg1] 21/9/2017 13:55

I posted without looking as I trust the guy.

I just looked for anything recent

[superg1] 21/9/2017 13:52

For those interested which may explain the weakness.

The diamond business talk is (I know someone in it) that things are dire with India companies winding up and its in a bit of a sorry mess.

A suggestion that tenders will be poorly attended.

Just passing it on.

[pottermagic2310] 20/9/2017 18:33

Bang on Tanelorn. I like the look of this past week's efforts and the next one scheduled for late October

[bigglesbingham] 18/9/2017 20:18

I was hoping for more large stones by now

[abtwo] 18/9/2017 10:32

RNS 23Oct13 : Potentially big stones but no mention of where from.

The Pilot Plant has recovered approximately 325,000 carats during the period September 2011 to July 2013. The data
from the recovery and subsequent sale of these diamonds has allowed for the assortment and revenue models to be
updated by the independent consultant and for higher confidence to be placed by management on the modelled prices that
will be realised once production commences via the new fit for purpose Main Treatment Plant.
The previous assortment and revenue models, used to estimate the mineral resource that was incorporated in the 2012
Definitive Feasibility Study ("DFS"), were based on the 2007 wide diameter drill samples, which were derived from
approximately 2,500 carats and 10,000 tonnes of each rock type treated from four localised individual pits. These models
have now been updated with the large production parcel recovered and sold over the past 22 months. Furthermore, the
models have been updated with the nine large (plus 100 carat) stone fragments to determine the potential upside in
diamond values that can be expected.

-------------------------------------------

It is important to note that the independently modelled size of the nine large fragmented stones that were recovered have
been limited to 100 carats per stone. Three of these stones were calculated to have been 200 carats or larger, the largest
being a cape yellow diamond of ~430 carats. Had these large stones been recovered undamaged, the potential price
upside could well be greater than that which is currently modelled and is supported by the knowledge that Lesotho is
known for its production of large high quality diamonds.