Firestone Diamonds’ Botswana Operations
Following a decision to focus on its flagship Liqhobong Diamond Mine in Lesotho, Firestone commenced a disposal process for all its assets in Botswana. In July 2015 the Company entered into a conditional agreement for the disposal of these operations, including the BK11 mine, to Tango Mining Limited (TSXV: TGV) for a total cash consideration of US$8.0 million. Subsequent to the year end, on 2 October 2015, Tango formally requested an extension of time regarding the second tranche of a deposit that was payable on 30 September 2015 of US$0.3 million.
Firestone is in discussions with Tango and anticipates the agreement will be finalised in early 2016. In relation to the regulatory approvals required for the Disposal, the Botswana Competition Authority provided its unconditional approval of the Disposal on 28 September 2015.
About the Botswana Operations
The Botswana operation’s primary asset is the BK11 mine and the company also has a number of ancillary assets in country.
Firestone is of the view that the Botswana operations present a rare opportunity that has the ability to deliver strong returns under the ownership of an operator or operators for whom it would be a core asset for, inter alia, the following reasons:
- 11.5Mt of production in the mine plan, over a life of mine of 10 years, at an average grade of 8.5cpht
- Potential to substantially improve the yield from the BK11 treatment plant with the introduction of further capital investment
- Fully commissioned electrical power infrastructure that was ready for connection to BK11 when the BK11 operations were placed on care and maintenance
- No LDD sampling has been performed below a depth of 150m, however core holes have been drilled down to depths of 250m and the results thereof indicate primary kimberlite and continuity to depth
- High quality infrastructure is in place due to the existence of the Debswana (50/50 partnership between the Government of the Republic of Botswana and the De Beers group) mines (Letlhakane and Orapa) in the region
- Significantly coarse BK11 mine production parcels with lack of any boart or industrial material