Firestone Diamonds plc
Debswana to proceed with Jwaneng Tailings Project
LONDON: 30 June, 2010
Firestone Diamonds plc, ("Firestone" or "the Company"), the AIM-quoted diamond mining and exploration company (ticker: AIM:FDI), today announces that it has been informed by Debswana Diamond Company ("Debswana") that Debswana has decided to proceed with the Modular Tailings Treatment Project ("MTTP") at the Jwaneng Mine with Firestone, subject to contractual arrangements, which are currently at an advanced stage, being finalised, and suitable financing arrangements being made for the capital costs of the project. Construction is expected to commence in H1 2011 with full production scheduled for 2012.
HIGHLIGHTS
• | Debswana to proceed with modular tailings treatment plant at the Jwaneng Mine in Botswana, the world's largest diamond mine by value, subject to financing arrangements
|
• | Tailings resource at Jwaneng estimated at over 30 million tonnes
|
• | Firestone responsible for financing, construction and operation of the plant
|
• | Plant to serve as pilot facility with potential for deployment to other Debswana mines
|
• | Construction expected to commence in H1 2011, with full production of 2 million tonnes per annum targeted for 2012
|
• | Potential revenue of up to $150 million for Firestone |
Philip Kenny, CEO of Firestone Diamonds, commented: "We are very pleased that Debswana has decided to move forward with the Jwaneng Tailings Project, for which Firestone was selected due to its track record in financing, building and operating diamond processing and toll treatment plants. This project is a key component of our strategy of developing toll treatment opportunities to supplement our own mining operations at BK11 and the evaluation and development of our other kimberlites in the Orapa and Tsabong kimberlite fields."
Project Background
Following the submission of tenders by a number of suppliers in 2008, Firestone announced in Q1 2009 that it and ADP Projects ("ADP") had been selected by Debswana as the preferred bidders to supply, construct and operate a modular tailings treatment plant at the Jwaneng Mine in Botswana on a toll treatment basis. Debswana is a joint venture between the Government of the Republic of Botswana and De Beers and is the world's leading diamond producer by value. Jwaneng is the largest diamond mine in the world by value and in 2008 produced approximately 13 million carats, with an estimated value of $1.8 billion.
The Jwaneng plant is intended to serve as a pilot facility to demonstrate the economics and capability of the modular plant concept on the Jwaneng tailings resource, and could potentially lead to the deployment by Firestone and ADP of similar plants to exploit additional tailings resources at other Debswana mines. The Jwaneng tailings resource is estimated to be in excess of 30 million tonnes. The plant is being designed by ADP, with whom Firestone has a strategic alliance to jointly design, build and operate modular diamond tailings processing plants.
Current status
Negotiations with Debswana were originally expected to be concluded in 2009, but were delayed as a result of the decision by Debswana during the year to temporarily suspend some of its mining operations and significantly reduce production. With conditions in the diamond market having significantly improved Debswana has now decided to proceed with the MTTP at Jwaneng with Firestone, subject to contractual arrangements, which are currently at an advanced stage, being finalised, and suitable financing arrangements being made for the capital costs of the project. Based on contract rates from the Company's previous toll treatment operations in South Africa, the Directors anticipate that the Jwaneng tailings project has the potential to contribute up to $150 million in toll treatment revenue for the Company.
Project schedule
The MTTP will proceed into the execution phase as soon as the Firestone and Debswana project teams finalise the contractual arrangements and financing proposals for the project. Construction is expected to commence in H1 2011, with initial production scheduled for early 2012, and full production to be reached later in 2012.
Project financing
The estimated capital cost for the project is $55 million. Firestone intends to finance the project through a special purpose vehicle that will arrange debt finance for the project against the contract with Debswana. Discussions have been held with a number of interested lenders and the Company is confident that suitable financing arrangements will be made available.
For further information, visit the Company's web site or contact:
Philip Kenny, Firestone Diamonds
| +44 20 8834 1028/+44 7831 324 645 |
Simon Edwards / Tim Redfern, Evolution Securities (Joint Broker)
| +44 20 7071 4330 / 4312 |
Rory Scott, Mirabaud Securities (Joint Broker)
| +44 20 7878 3360 |
Alexander Dewar, Brewin Dolphin (Nominated Adviser)
| +44 131 529 0276 |
Emily Fenton / Leesa Peters, Conduit PR
| +44 20 7429 6608/+44 77885 54035 |
Background information on Firestone Diamonds:
Firestone Diamonds plc ("FDI.L") is an international diamond mining and exploration company with operations in Botswana and South Africa. Botswana is the world's largest and lowest cost producer of diamonds, with annual production worth over $2.5 billion, and is considered to be one of the most prospective countries in the world to explore for diamonds.
Firestone is the largest holder of mineral rights in Botswana's diamondiferous kimberlite fields, controlling over 25,000 square kilometres around the major Orapa and Jwaneng mines and the entire Tsabong kimberlite field. Firestone has 103 kimberlites in its portfolio, of which BK11 is about to commence production, and 29 others have been proven to be diamondiferous.
RNS news service provided by Hemscott Group Limited.
DISCLAIMER - IMPORTANT
DUE TO RESTRICTIONS UNDER APPLICABLE SECURITIES LAWS THE MATERIALS ON THIS SECTION OF THE WEBSITE ARE RESTRICTED AND SUCH INFORMATION AND DOCUMENTS ARE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN CERTAIN JURISDICTIONS. IN PARTICULAR, THEY ARE NOT DIRECTED AT OR ACCESSIBLE BY PERSONS LOCATED IN THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH IT IS UNLAWFUL TO TRANSMIT SUCH INFORMATION.
Please read this notice carefully - it applies to all persons who view this webpage. Please note that the notice set out below may be altered or updated. You should read it in full each time you visit the site.
Viewing these materials in jurisdictions other than the United Kingdom may be prohibited or restricted by applicable law and regulation. In some of these jurisdictions, only certain categories of person may be allowed to view such materials. Any person resident outside the United Kingdom who wishes to view these materials must first satisfy themselves that they are not subject to any local requirements that prohibit or restrict them from doing so.
The website and the information and materials contained herein do not constitute or form a part of any offer to buy or a solicitation of an offer to purchase or subscribe for securities in Fitzgerald plc in any jurisdiction or jurisdictions in which such offers, sales or solicitations are unlawful prior to registration or qualification under the securities laws of any such jurisdiction. In particular, the securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "US Securities Act"), or under the applicable securities laws of the United States and may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act. There will be no public offering of the securities in the United States. The securities offered and sold outside the United States are being offered in reliance on Regulation S of the US Securities Act.
In addition, no securities registration or other clearances have been or will be made or obtained with or from the relevant authorities in Australia, Canada, Japan or South Africa or any other jurisdiction except the United Kingdom. Accordingly, unless an exemption under the relevant securities law is applicable, the securities may not be offered, sold, resold, delivered or distributed, directly or indirectly, in or into the United States, Australia, Canada, Japan or South Africa or any other jurisdiction if to do so would breach any applicable law, or require registration thereof in such jurisdiction. If you are not permitted to view materials on this website or are in any doubt as to whether you are permitted to view these materials, please exit this website.
Access to electronic versions of these materials is being made available on this website by Fitzgerald plc in good faith and for information purposes only. Any person seeking access to this section of the website represents and warrants to Fitzgerald plc that they are doing so for information purposes only. Making these materials available in electronic format does not constitute an offer to sell or the solicitation of an offer to buy or subscribe for securities in Fitzgerald plc or constitute a recommendation by Fitzgerald plc or any other party to sell or buy securities in Fitzgerald plc.
Access to this website may be restricted under securities laws in certain countries. Accordingly, by clicking below, you warrant that:
I have read and understood the disclaimer set out above. I confirm that I am permitted to access this section of the website and that I am not a resident of the United States, Australia, Canada, Japan or South Africa nor located inside the United States, Australia, Canada, Japan or South Africa, nor am I a resident of, or located inside, any other jurisdiction other than the United Kingdom unless in such territory the contents of this website can be lawfully transmitted without contravention of any unfulfilled registration or other legal or regulatory requirement.
By clicking on "I ACCEPT" below you are agreeing to the terms and conditions above.