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Eman
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RNS Number:4136K
Firestone Diamonds PLC
31 March 2005
31 March 2005
Firestone Diamonds plc
Unaudited interim results for the six months to 31 December 2004
LONDON: 31 March 2005 - The Board of Firestone Diamonds plc, ("the Company"),
the AIM-quoted diamond mining and exploration company, announces unaudited
interim results for the six months to 31 December 2004.
HIGHLIGHTS
General
* After tax profits increased 11% to #162,501
* Rough diamond market very strong; prices increased 20% in 2004 and 3%
to date in 2005
* Share placements in July 2004 and March 2005 raised approximately #4.9
million after expenses
Orapa and Mopipi, Botswana
* Orapa project secured and joint venture signed with De Beers
* Intensive work programme under way in Orapa and Mopipi project areas
* 51,000 line kilometres of high-resolution geophysical surveys
conducted; 180 targets identified to date
* Three kimberlites discovered
Jwaneng, Botswana
* New project secured and joint venture signed with De Beers
* Initial work programme under way
Groen River Valley, South Africa
* Intensive drilling and bulk sampling programme planned; drilling has
commenced
* Prospecting permit issued for substantial new area
Bonte Koe Mine, South Africa
* Mine development and commissioning completed
* First diamonds produced and sold for $205 per carat
Oena Mine, South Africa
* Production increased 26% to 457 carats
* Average value of diamonds sold increased 10% to $1,158 per carat
Avontuur Mine, South Africa
* Production decreased 9% to 2,651 carats
* Average value of diamonds sold increased 11% to $125 per carat
New projects
* New exploration and mining projects being evaluated
Dear Shareholder,
Since June of last year we have made continued good progress in the growth and
development of Firestone's exploration and mining project portfolio.
In Botswana, the Company acquired two new kimberlite exploration projects,
increased the area held under licence by 150% to approximately 9,000 square
kilometres and concluded two new joint ventures with De Beers over the Orapa and
Jwaneng projects. An intensive exploration programme was initiated in the
Mopipi and Orapa project areas, with more than 51,000 line kilometres of
high-resolution geophysical surveys conducted. In February 2005, we announced
that drilling of the first targets identified by these surveys had resulted in
the discovery of three new kimberlites close to the Orapa Mine.
In South Africa, the Company increased the area held under licence in the Groen
River Valley area by 150% to over 50,000 hectares. An intensive follow-up
exploration and evaluation programme was developed for the Groen River Valley
area and drilling in the area commenced at the end of 2004.
The main focus of our mining operations was at the Company's new Bonte Koe Mine.
Construction of the gravel treatment plant, power line and pipe line, and
refurbishment of buildings and accommodation were completed during the period,
following which commissioning of the plant commenced, with the first diamonds
being recovered in October.
REVIEW OF OPERATIONS
Exploration
Orapa and Mopipi Projects
The Mopipi project covers an area of approximately 3,600 square kilometers and
is located close to the Orapa and Letlhakane diamond mines. In June 2004, the
Company entered into a joint venture with De Beers over the Mopipi project,
under the terms of which De Beers can earn a 61% interest in the project by
taking it to completion of bankable feasibility.
During the period, the Company was awarded new prospecting licences for an area
of approximately 1,300 square kilometers, also located close to the Orapa and
Letlhakane diamond mines, known as the Orapa project. In December 2004, we
announced that the Company had entered into a new joint venture with De Beers
over the Orapa project, on the same commercial terms as those of the Mopipi
joint venture.
An intensive exploration programme was initiated in the Mopipi and Orapa project
areas. More than 51,000 line kilometres of high-resolution geophysical surveys,
including airborne magnetics, ground gravity and ground magnetics, were
conducted. Interpretation of the data from these surveys has identified 180
potential kimberlite drilling targets to date for further investigation. De
Beers, which is project operator in the joint ventures with Firestone, has
commenced drilling of selected targets.
In February 2005, the Company announced that three new kimberlites had been
discovered in the Orapa project area, approximately 15 kilometres south of the
Orapa Mine. Evaluation of the material recovered from drilling is currently
being carried out at De Beers' laboratories in Johannesburg. Microprobe
analysis of the kimberlitic indicator minerals and analysis of the size/
distribution frequency of the microdiamond populations from each of the
kimberlites is being undertaken so as to allow an initial evaluation of the
economic potential of the kimberlites to be made.
In March 2005, the Company announced that it had entered into a joint venture
with Daly City Ventures, a Botswana company that holds a prospecting licence in
the Orapa region over an area of approximately 380 square kilometers. The
Company is developing plans for the exploration of this area, which adjoins the
Mopipi and Orapa project areas.
Groen River Valley, Namaqualand, South Africa
The Groen River Valley project in Namaqualand is Firestone's most promising
exploration project in South Africa due to the high quality and large size of
diamonds that have been mined in the area and the large area controlled by the
Company. The pace of exploration activity increased significantly during the
period.
Exploration drilling carried out last year had resulted in a very significant
discovery and proved the presence of at least one very large gravel deposit that
has been proven to be diamondiferous, known as the HL deposit. During the
period, plans were developed for an intensive follow-up exploration and
evaluation programme. This programme commenced in December 2004, and will
include detailed drilling and bulk sampling on the HL deposit, follow-up
drilling on targets identified by the last year's drilling programme, and
drilling of new targets. As the HL deposit is known to be diamondiferous, the
objective of the bulk sampling programme will be to estimate the grade of the
deposit and diamond value in order to make an initial economic evaluation of the
deposit.
In March 2005, we announced that the Company had been awarded a prospecting
permit for a substantial new area in the Groen River Valley region, increasing
the Company's land position by 150% to over 50,000 hectares. The ground covered
by the new prospecting permit adjoins the Company's current project area, and is
believed to contain significant extensions to the diamondiferous palaeo channels
previously identified by the Company in the region. Firestone will explore the
new area through its black-empowerment subsidiary, African Star Minerals.
Jwaneng, Botswana
During the period, the Company was awarded new prospecting licences for an area
of approximately 3,700 square kilometers, located close to the Jwaneng diamond
mine. The Jwaneng Mine is the biggest diamond mine in the world, producing
approximately 12 million carats per annum with a value of over $1.5 billion. In
December 2004, we announced that the Company had entered into a new joint
venture agreement with De Beers over the Jwaneng project, on the same commercial
terms as those of the Mopipi joint venture.
Work commenced on the Jwaneng project in early 2005. Data from exploration
recently carried out by De Beers in the Jwaneng region is being integrated with
data from past kimberlite indicator mineral sampling in order to identify target
areas for follow-up work on the ground. High-resolution ground gravity and
magnetic surveys will be conducted on selected target areas to identify
potential kimberlite drilling targets. Initial drilling targets are expected to
be identified and drilled in the next six months.
US Exploration Project
Exploration at the Company's kimberlite exploration project in the United States
over the past two years indicates that at least one previously unknown
kimberlite field is located in the project area, and that some of these
kimberlites may be diamondiferous. In June 2004, the Company entered into a
joint venture over the US project with American Diamonds Inc, under the terms of
which American Diamonds can earn a 60% interest in the project through the
expenditure of $1 million. Follow-up sampling was carried out during the period
in high priority target areas identified by previous sampling, and the results
of this work are expected to be available shortly.
Mining
Bonte Koe Mine, Namaqualand, South Africa
The Company's black empowerment joint venture company, African Star Minerals,
continued with the development of new mining operations at the Bonte Koe Mine.
During the period construction of the gravel treatment plant, power line and
pipe line, and refurbishment of accommodation, workshop and office facilities
were completed. Commissioning of the gravel treatment plant and final recovery
sections commenced towards the end of the period. During this process a number
of modifications were made to the plant, including conversion of the feed
preparation section from dry screening to wet screening, in order to optimise
gravel throughput and diamond recovery efficiency. All of the required
modifications have now been made and commissioning of the plant has been
completed.
A total of 207 carats was recovered during commissioning of the gravel treatment
plant during the period. The average size of the diamonds was 0.51 carats per
stone, and 26% of the parcel was comprised of diamonds weighing more than 1
carat. A sample parcel of 80 carats was sold during the period for an average
price of $205 per carat, higher than the $200 per carat that was originally
expected for Bonte Koe production.
Mining operations at Bonte Koe have been focused on excavating and processing
material from a number of locations on the property with the objective of
improving the geological interpretation of the deposits on the mine and allowing
material from a number of mining areas to be blended. Grades from areas tested
to date range from 1 to 9 carats/100 tonnes.
In 2004, the Company decided to increase the capacity of the gravel treatment
plant at Bonte Koe and to construct a 10 km power line and a 35km water pipeline
to the mine, with the objective of securing other projects on the Buffels River
that could be exploited using this infrastructure. A number of opportunities in
the Buffels River have been identified and are currently being evaluated by the
Company.
Avontuur Mine, Namaqualand, South Africa
Production for the period was 2,651 carats, a decrease of 9% compared to the
same period last year. This was due to the temporary allocation of some mining
equipment from Avontuur to Bonte Koe, although the impact of this was reduced by
more effective utilization of other equipment at Avontuur. Grades from mining
areas ranged from 2 to 25 carats/100 tonnes, and diamonds produced continued to
be approximately 85% gem quality, with an average size of 0.23 carats per stone.
Demand for Avontuur production remained strong, with the average price for gem
quality diamonds sold during the period increasing 4%, to $137 per carat, and
overall value of mine production increasing 11%, to $125 per carat.
Exploration activity continued on targets that had been identified by data from
a high-resolution airborne electromagnetic survey conducted over the mine area
and which were drilled last year. Bulk sampling of the first of these targets
is being planned for later this year. The Company has also identified a number
of new mining and exploration opportunities in areas close to the mine that
could be exploited using the infrastructure at Avontuur, and it is expected that
progress will be made in this regard in the coming year.
Oena Mine, Namaqualand, South Africa
Meso gravel mining operations were carried out by the Company at the Oena
terrace during the period. Discussions were initiated with a number of
potential mining contractors with the objective of restarting mining operations
at the Blokwerf and Sandberg terraces. These discussions are still under way.
Production from the Company's mining operations at Oena increased 26% to 457
carats compared to the same period last year. Grades from mining areas
continued in line with last year, and ranged from 0.06 to 1 carats/100 tonnes,
with diamonds produced averaging 1.17 carats per stone.
With continued shortages of supply at the high end of the diamond market, demand
for Oena production remained strong. The average price for diamonds sold
increased 10% to $1,158 per carat, primarily due to the sale of a number of
large, high value stones. A number of special diamonds were recovered during
the period, including stones of 62.24 and 32.57 carats that sold for
approximately $204,000 and $120,000, respectively.
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Eman
Platinum Contributor
Joined: 16-Aug-03
Location: United Kingdom
Posts: 500
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http://www.resourceinvestor.com/pebble.asp?relid=9265
Botswana Hits De Beers with Profit Cut
By Emma Muller
15 Apr 2005 at 06:59 AM EDT
ANTWERP (Business Day) -- In a fundamental power shift between De Beers and its suppliers, the Botswana government has renegotiated a contract in which the company’s profit from its Debswana joint venture has been slashed.
Botswana is the world’s biggest diamond producer and sells all its production of about $3bn through De Beers.
Botswana contributes more than 70% to De Beers’ profit.
According to sources familiar with the renewal of the contract, De Beers’ share in the profit from Debswana will be reduced 20%, so that its new share of net profit, estimated at between $2bn and $2,5bn, will be 20% instead of 25% of the total after tax.
Also, it is understood that a new company, DTC Botswana, will be set up, through which 95% of production will be sold before going on to De Beers’ DTC London. This will affect the $300m a year that DTC London receives as its 10% commission for marketing the total production.
The net effect of these two changes, says a source close to the company, will be to roughly halve the profit that De Beers or DTC will make from the Botswana production.
“It will lead to a significant fall in cash inflow, which last year amounted to around $700m,” said Des Kilalea, an analyst at Nedcor Securities in Johannesburg. It might encourage De Beers to focus primarily on volume and increase the number of carats it produced in Botswana, he said.
The move also highlights the growing vulnerability of De Beers’ supplies.
Although analysts say the move is unlikely to strain De Beers’ balance sheet, it will make it difficult for the company to replace the income generated from Botswana.
Some market observers say the changes were partly the result of De Beers’ weak position in other producer countries.
During the renegotiation of the contract, its relations with many producer countries were at an all-time low.
In addition, the liquidation of its stockpile following its privatisation has left the company vulnerable in this type of negotiation.
De Beers has now made its partnerships with producers a key focus of it strategic direction.
The company recently imposed a service surcharge of just less than 2% on its customers, or sight-holders, which insiders say will partly compensate for the decline in revenue from its producer contracts.
DTC is expected to raise the surcharge over the next five to 10 years, based on extra services which will include workshops, seminars with business leaders from other industries and “best practice principles” in corporate accountability and transparency.
Under the new contract, the Botswana government has included demands for local beneficiation. A key objective is to create jobs by encouraging local manufacturing.
Under these arrangements, De Beers will shift part of its activities at the DTC in London to Gaborone through DTC Botswana, which will sort diamonds, organise sales and select its own sight-holders.
De Beers would only say: “This is a confidential matter between the two shareholders and it would be inappropriate for us to comment.”
Charles Wyndham, of WWW International Diamond Consultants in London, said: “The impact for the industry is seismic. Apart from the hole this creates in De Beers’ profit-and-loss account, it signals the end of the what is termed the London mix and single-channel marketing as the cornerstone of De Beers’ marketing.”
Could partially explain why DB is soo keen to find more big mines with their JV partners..
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Eman
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Joined: 16-Aug-03
Location: United Kingdom
Posts: 500
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| Posted: 18-Apr-05 at 14:13 | IP Logged
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De Beers, govt to establish polishing firm
18 April, 2005
GABORONE - DTC Botswana, a company that would be owned 50 per cent
by Botswana and 50 per cent by De Beers diamond mining company, and
which shall sell Botswana diamonds, is in the offing.
Minister of Minerals Energy and Water Resources Charles Tibone told
BOPA in an interview on Saturday that this is a move by government to
encourage manufacturing and polishing of diamonds in Botswana.
"This should in no way disadvantage De Beers, as this was an agreement
negotiated between both parties," said Tibone. He further revealed that
the company would be operational by June this year.
DTC Botswana, a stand-alone company with a different shareholding from
DTC London, will be receiving 100 per cent of its diamond supplies from
the country.
He explained that once operational, the mines in the country would send
their production to the Botswana Diamond Valuing Company, for sorting,
whose sale would then be conducted by DTC Botswana. Until the
Botswana company is formed, this remains DTC London's mandate.
Manufacturing companies in Botswana would no longer need to apply for
quotas in London.
Concerning a South African newspaper Business Day's Friday story that De
Beers' share in the profit from Debswana would be reduced 20 per cent,
Tibone said there was no such intention.
"What happened is that the three Debswana mines, which used to have
separate agreements, have now been put under one regime, " he said. He
explained that by putting them under one agreement, the terms apply
equally.
Business Day estimated De Beers' share in the new contract at between $2
billion (about P9 billion) - $2,5 billion (about P11 billion).
To this Tibone said "if we're dealing with estimates, then that's
speculation because we don't know what profit will be made, even though
we expect our mines to remain profitable".
The South African paper described the move as a power shift, and said
the Botswana government renegotiated a contract in which De Beers'
profit from its Debswana joint venture has been slashed.
The minister disagreed saying, "there was no power shift, just
harmonisation of all agreements".
Business Day further states that selling the diamonds through DTC
Botswana would affect the $300 million (about P1, 4 billion) that DTC
London receives as its 10 per cent commission for marketing the total
production. BOPA
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Eman
Platinum Contributor
Joined: 16-Aug-03
Location: United Kingdom
Posts: 500
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FDI took an absolute bashing yesterday, no suprise it has bounced a little today. All my stock at the moment is a free carry, but i am tempted to buy more if the price drops much further. Still plenty of newsflow expected and the share price could test 200p this year imo.
dyor.
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Eman
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Looks like the rot has stopped in the FDI sp.
RNS Number:2945M
Firestone Diamonds PLC
13 May 2005
Firestone Diamonds plc
Senior Executive Appointment
LONDON: 13 May 2005 - The Board of Firestone Diamonds plc, ("the Company"), the
AIM-quoted diamond mining and exploration company, is pleased to announce the
appointment of Mr. Tim Wilkes as Director Resource Development for the Firestone
Diamonds group.
Mr. Wilkes joins Firestone from De Beers, where he was General Manager Mineral
Resource Management, with responsibility for the management of De Beers' mineral
resource portfolio worldwide, and was the Competent Person responsible for the
evaluation, classification and reporting of the company's mineral resources and
reserves.
Mr. Wilkes brings over twenty four years' experience in the diamond industry,
including twenty years with De Beers. He has worked extensively on kimberlite
and alluvial diamond exploration, evaluation and mining projects worldwide,
including four years at the Orapa Mine in Botswana, and six years on the west
coast of South Africa and Namibia. He is Chairman of the sub-committee for
diamonds of the South African Mineral Resource Committee (SAMREC), which is
responsible for the publication of the SAMREC Code. The SAMREC Code sets out
standards for reporting of exploration results, mineral resources and mineral
reserves in South Africa.
In his new position, Mr. Wilkes will be responsible for leading the development
of Firestone's mineral resource portfolio. His primary focus will initially be
on the Company's strategic projects, as follows:
* the Mopipi and Orapa projects in Botswana, which are being explored in
joint venture with De Beers, and where a number of kimberlites have been
recently discovered and are in the process of being evaluated
* the Jwaneng project in Botswana, which is also being explored in joint
venture with De Beers
* the Company's other new exploration projects in the Orapa and Jwaneng
areas
* the Groen River Valley project in Namaqualand
Mr. Wilkes will also be responsible for the identification and evaluation of
potential new projects for the Company in Southern Africa and elsewhere. Mr.
Wilkes will report to Philip Kenny, Chief Executive Officer, and will join the
group's Executive Committee.
Commenting on today's announcement, Philip Kenny, CEO of Firestone Diamonds,
said: "We are delighted that Tim has decided to join Firestone. He is one of
the leading professionals in his field, and the extensive experience and skills
that he brings to our senior management team will be a great asset to the
Company in developing and expanding the Company's project portfolio."
For further information:
Philip Kenny, Firestone Diamonds &nbs p; +44 20 7370 6452 / +44 7831 324 645
Leesa Peters, Conduit PR &nbs p; +44 20 7618 8760 / +44 7812 159 885
Jamie Cumming, Bell Lawrie White & nbsp;+44 141 314 8103 / +44 77 6804 4620
Website: www.firestonediamonds.com
Background information:
Firestone Diamonds plc is an international diamond mining and exploration
company with operations in the Namaqualand region of South Africa, Botswana and
the United States.
Firestone has extensive interests in Botswana, which is the world's largest
producer of diamonds, with annual production of over 30 million carats worth
over $2.5 billion. Botswana is considered to be one of the best countries in
the world to explore for kimberlite - the primary source rock for diamonds.
Firestone's Mopipi, Orapa and Jwaneng projects are located close to the major
Orapa and Jwaneng mines and are all being explored by De Beers in joint venture
with Firestone. Firestone is also exploring for kimberlite in the US on the
Laurentia craton, which extends into Canada, where it hosts the Ekati and Diavik
diamond mines.
Namaqualand, which is located on the west coast of South Africa, has been one of
the world's largest alluvial diamond producing regions for the past 60 years,
with total production to date estimated to be worth more than $3 billion.
Firestone's mining operations in Namaqualand include the Bonte Koe, Avontuur and
Oena Mines, all of which produce high quality alluvial diamonds, and a growing
portfolio of early stage and advanced exploration projects, of which the Groen
River Valley project is the most important.
Firestone has a highly qualified management team with extensive experience in
the financing and development of diamond and other natural resource projects.
Firestone is quoted on the Alternative Investment Market (AIM) of the London
Stock Exchange and trades under the symbol FDI.L.
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Andy
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Joined: 29-Apr-03
Location: United Kingdom
Posts: 204
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| Posted: 15-May-05 at 15:31 | IP Logged
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Eman,
Yes, and what a way to stop it!
This is a first class appointment IMHO, a direct transfer from De Beers!
Tim Wilkes has all the necessary experience gleaned from over 20 years service in all the places FDI are currently prospecting, so this is a perfect fit IMO.
I suppose this is an example of the closeness betwenn DEB and FDI, and that's fine by me.
To be accurate, FDI's price had already bounced from the recent low, but this will certainly help, as the city will surely be taking note of what is happening here.
I have recently toppped up.
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Eman
Platinum Contributor
Joined: 16-Aug-03
Location: United Kingdom
Posts: 500
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| Posted: 15-May-05 at 19:41 | IP Logged
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Of the larger companies Firestone Diamonds stood out with an 11 pe rcent gain to end the week at 144p following the announcement that Tim Wilkes had joined the company from De Beers to head up the development of the company’s mineral portfolio. Mr Wilkes was previously General Manager Mineral Resource Management with De Beers and his appointment was clearly seen by the market as a strong statement that Firestone intends to accelerate the development of its portfolio.
http://www.minesite.com/storyFull.php?storySeq=729
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Andy
Silver Contributor
Joined: 29-Apr-03
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| Posted: 16-May-05 at 00:17 | IP Logged
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Eman,
Can't argue with that statement.
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Topic: Firestone Interims
