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From: Nigel
ArtDate: 11th October 2006
Section: (FILLYABOOTS NEWS RELEASES)
Remote Name: 84.9.59.210
Date: 25/10/06
Time: 21:35
11th October 2006
Firestone Diamonds plc Granted Tsabong Kimberlite Prospecting Licences
News Item - Conduit PR
Firestone Diamonds plc Prospecting licences granted over the Tsabong kimberlite field in Botswana
HIGHLIGHTS
Prospecting licences granted over the Tsabong kimberlite field in Botswana, one of the largest diamondiferous kimberlite fields in the world, with 67 known kimberlites, of which 17 are diamondiferous Tsabong contains many large kimberlites, including the 180 hectare M1 kimberlite and 5 kimberlites larger than 50 hectares Known kimberlites have not been evaluated with modern techniques Good potential for discovery of new, large diamondiferous kimberlites Threshold for economic viability in the Tsabong area is modest - 20-25 cpht and diamond value of $100 per carat Exploration and evaluation plans to be finalised by end October 2006, following which field work will commence Firestone Diamonds plc (“Firestone” or “the Company”), the AIM-quoted diamond mining and exploration company, is pleased to announce that it has been granted new prospecting licences over an area of approximately 5,000 square kilometres, covering the entire Tsabong kimberlite field in Botswana.
The Tsabong kimberlite field is located in south western Botswana, approximately 280 km south west of the Jwaneng Mine, which is the world’s biggest diamond mine. Tsabong is one of the largest diamondiferous kimberlite fields in the world, containing 67 known kimberlites, of which 17 have been proven to be diamondiferous. Tsabong is noted for the exceptionally large size of many of its kimberlites, in particular the 180 hectare M1 kimberlite, which is one of the largest diamondiferous kimberlites in the world. The Tsabong field also contains 5 kimberlites each larger than 50 hectares and 30 kimberlites between 20 and 50 hectares in size.
Philip Kenny, CEO of Firestone Diamonds, commented today: “The acquisition of an entire diamondiferous kimberlite field in Botswana is a very significant development for Firestone. With the kimberlite exploration and evaluation expertise that we now have in the Company, and with our cash and cash flow from mining operations in South Africa, we will be able to move the Tsabong project forward rapidly and aggressively. The probable development by De Beers and African Diamonds of a new diamond mine in the Orapa area on the AK6 kimberlite, which was originally discovered and evaluated in the 1970’s and considered at that time to be a small, low-grade kimberlite, provides an indication of the potential that still remains in Botswana. I look forward to updating shareholders on our plans for Tsabong as they develop in due course.”
Data Review The Company has conducted a detailed review of data from work carried out on the Tsabong field. This review has confirmed the diamond-bearing potential of the Tsabong area and indicates that none of the kimberlites have been evaluated either on an adequate scale or with modern techniques. The Company has also conducted a review of data from modern airborne magnetic surveys in the Tsabong area, which indicates that the potential for the discovery of new, large-tonnage diamondiferous kimberlites is good.
Economic potential With rough diamond prices estimated to have tripled since the Tsabong field was discovered in the early 1980’s, the threshold for economic viability in the Tsabong area has been reduced substantially. An analysis of the economics of Botswana’s existing diamond mines indicates that a 20 hectare kimberlite in the Tsabong area with a moderate grade of 20-25 cpht and average quality diamonds of $100 per carat would support a large-scale, profitable mining operation.
Exploration and evaluation plans The Company plans to carry out two parallel work programmes at Tsabong. The first work programme will be focused on a detailed and systematic evaluation of all the known kimberlites in the field. The second work programme will be focused on exploration for new kimberlites. Planning for these programmes is at an advanced stage and is expected to be completed by the end of October 2006, following which preparations for field work will commence. Access to the area is via tarred road from Gaborone and infrastructure in the area is good, so no significant difficulties are expected in carrying out field work.
Background information on exploration at Tsabong: The Tsabong kimberlite field was discovered by Falconbridge in the 1970’s. Between 1977 and 1981 Falconbridge discovered a total of 35 kimberlites in the Tsabong area, including the M1 kimberlite. A limited amount of evaluation was carried out on these kimberlites, primarily due to fact that most of them were covered by between 40 and 80 metres of overburden, which was considered at the time to be deep and close to the limit for effective evaluation and mining purposes. In addition, the microdiamond and kimberlite indicator mineral analysis techniques available at the time were at an early stage of development and primitive by comparison to current techniques. Following the extended slump in commodity prices in the early 1980’s, Falconbridge ceased work on the Tsabong field and withdrew from all of its diamond exploration projects worldwide.
No further work was carried out on the Tsabong kimberlites until the mid 1990’s. Exploration work was carried out on an intermittent basis between 1994 and 2004 by a number of small Canadian and Australian exploration companies, but exploration budgets were limited and did not allow any significant new exploration or evaluation work to be carried out. Despite this, an additional 32 kimberlites were discovered during this period. Limited evaluation work was undertaken on these new discoveries, primarily using a 50 kg sample from a single hole in the centre of each kimberlite.
Note: The information in this statement has been reviewed by Mr. Tim Wilkes, BSc, MSAIMM, who is a qualified person for the purposes of the AIM Guidance Note for Mining, Oil and Gas Companies. Mr. Wilkes is Chief Operating Officer of Firestone Diamonds plc and has over 25 years experience in diamond mining and exploration. Mr. Wilkes is a member of the sub-committee for diamonds of the South African Mineral Resource Committee (SAMREC).
For further information: Philip Kenny Firestone Diamonds +44 20 8834 1028 / +44 7831 324 645
Leesa Peters Conduit PR +44 20 7429 6600 / +44 7812 159 885
Jamie Cumming Bell Lawrie +44 141 314 8103 / +44 7768 044 620
www.firestonediamonds.com
Leesa Peters Conduit PR 76 Cannon St London EC4N 6AE Dir: + 44 (0) 20 7429 6600 Office: + 44 (0) 20 7429 6666 Mob: ++ 44 (0) 781 215 9885 Fax: + 44 (0) 20 7429 6699
www.conduitpr.com
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