Firestone Diamonds Share Discussion Threads

[davethehorse] 29/11/2018 12:50

Paul Bosma and FDI represented at the Mines and Money in London this week, see FDI tweet below with photo along side Gem Diamonds Glenn Turner and our ex CEO Stuart Brown, now CEO of Mountain Province. Wonder what they were discussing? Check out @FDIplc's Tweet: https://twitter.com/FDIplc/status/1067469333562105857?s=08

[buywell3] 29/11/2018 06:05

So the key question re break-even re required diamond price per carat wasn't asked .... what a waste of time the rest of the meeting was ... fudge


Just looked in at Botswana Diamonds .... looks to me like they are for the knackers yard


Will Firestone be next ?


Or is there another in an even worse state re bank covenants


An aversion to barge poles now seems appropriate in this sector of AIM

[andy] 28/11/2018 22:51

DAve,

Thanks, I know who wrote that, he was sat on the far side by the wall.

A decent report that, a fair and accurate description of the proceedings, well written.

One resolution was actually voted down on the show of hands, which would have meant a poll, which would have been won on votes cast, so they re-voted and the guy changed his vote.

I have never seen that at an AGM before.

[davethehorse] 28/11/2018 22:37

This thread on FDI is worth a read, the last post is a detailed report from the AGM by HPC_Follower.... https://www.ii.co.uk/discussion/t/lse-fdi-main-discussion/1141347/56

[andy] 28/11/2018 21:58

bUywell,

No nobody asked that, and I guess it's an obvious question really.

However, you could work it our from the recent results, multiply carats sold by the average price, then look at the amount of loss, and work out how much they have to average to break even.

[andy] 28/11/2018 21:56

Varrirob,


We were relying on you for the food!


Shame you couldn't make it, it was quite a candid meeting and I respect them for that, it was actually refreshing.


Yes a couple of large gem quality atones would make a nice difference, but we need to see consistently higher average prices.

[varrirob] 28/11/2018 21:40

Thanks for the update Andy, sorry I couldn't make it. I had to cover last minute at work which was a bit annoying. Had to eat the sausage rolls at work instead. No surprises then and probably expected as we know it pretty much comes down to the diamond prices. A waiting game to see if we can unearth some big diamonds.

[gbgold1] 28/11/2018 19:06

Thanks for the update. It says all resolutions were passed. Anything major to note on these?

Also, was there any talk or mergers/takeovers/fresh investment?

Thanks

[buywell3] 28/11/2018 16:33

Did anyone ask at what diamond price they are at break even ?

If so please do tell

[andy] 28/11/2018 15:44

mdalos,


They admitted they are not finding so many large stones or coloured fancies as they were expecting, but again mining isn't an exact science, they rely on geologists making assumptions about what's deep down in the ground, they only find out when they mine it.

[andy] 28/11/2018 15:42

dave,


Yes it was by one gentleman there, several times, but in reality what can they do?


They kept repeating that it's the low diamond price that's causing them problems, company performance is in line with expectations.


If diamond prices rise then so will the shareprice (in theory), as they will be able to make money, at $70 they are on the edge.

[tanelorn] 28/11/2018 15:40

Thanks Andy,,,, any news on sale of BK11 ?

[davethehorse] 28/11/2018 15:21

Was the ever declining share price raised or talked about?

[davethehorse] 28/11/2018 15:04

Many thanks Andy, pretty much as expected, we need some decent stones and an increase in prices, lap of the gods I suppose...

[andy] 28/11/2018 14:34

OK the AGM was an interesting meeting.


4 shareholders attended.

This was the first AGM I have attended where AOB was dealt with first.


Lucio chaired the meeting and answered most of the questions, which focused on the financial aspects, as you might expect.


The gist was that the company ran as expected throughout the year in terms of production, performance, and safety wise, the only problem was the low diamond price.


$110 per carat is the level FDI ran their model on and at $70 per carat they are not making money, and are at the threshold of their banking covenants.


Lucio pointed out that 7 million carats of new production had entered the market at a time when diamond prices were already soft, and as a result, "run of mine" sub .6 of a carat was suffering price wise, and sub .3 was not worth mining.(pretty sure that's right, but if you're concerned, call FDI to confirm).


The LOM was reduced from 14 years to 9 years as a result of losing the 0.3, but if diamond prices rebound, this could be revised upwards again.


In my honest opinion, they are in a difficult place in terms of repaying the loan if diamond prices stay where they are, but if they fall further clearly their position will worsen, and the covenants would be broken.


They are in regular contact with their lenders, and flexibility may have to be used going forwards unless diamond prices increase soon.


They pointed out there are several options available to the company if new finance is needed. I personally felt thy were honest and upfront regarding the challenges they face, and didn't duck any hard questions, of which there were quite a few.


No new production is due online, and Argyle is closing in 2020, which will take 14 million carats off the market in one swoop, which should help prices in the longer term.


I genuinely feel they have the skills and expertise to resolve the current problems provided that diamond prices don;t fall any further, which is entirely out of their control.


I left more confident than when I arrived, but also more aware of how important the price of diamonds is to future performance.



The coffee was hot and the biscuits wrapped, so someone must read this thread!

[davethehorse] 28/11/2018 12:14

Waiting for any post AGM snippets with bated breath....

[davethehorse] 28/11/2018 11:04

4p holding firm and 4.1p could be a great top up price

[andy] 28/11/2018 09:23

Varrirob,


Please do!


It'll be the only food we get to consume if you do. :-)

Lincolnshire sausage ones are nice !

[abtwo] 28/11/2018 08:46

@tanelorn "...if they get lucky, but too many tonnes have been dug, for any likely surprises...."

Fortunately it does not work that way. It is just as likely (maybe even more so) that FDI recovers a +300ct GEM in the next 100 tonnes as it was in the first. Yes, it appears they are very rare but FDI's resource report shows they may need to process up to 10 million tonnes before they get one.
As mentioned, the question remains, will they have any money left to get to process the 10 millionth tonne?

[davethehorse] 28/11/2018 08:30

Hope those going manage to glean some useful info and get positive answers to questions. If they read these boards you may even get a decent coffee!

[andy] 27/11/2018 22:08

Varrirob,


You're living in the past there, they used to give a lovely buffet, but not anymore!

It really is tepid coffee and stale biscuits, total contempt for the shareholders.