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AMN - LESOTHO: Firestone recovers 134 carat diamond

Firestone Diamonds has recovered its largest diamond to date from the Liqhobong Diamond Mine in Lesotho. The 134 carat, gem-quality light yellow diamond is the second of more than 100 carats since production began almost a year ago.

The company's Board believes this recovery reinforces the potential for large stones at Liqhobong as the company continues early stage mining.

Firestone is an AIM-quoted, international diamond mining company with operations focused on Lesotho. Firestone is commencing commercial production at the Liqhobong mine, which is 75%-owned 75% by Firestone and 25% by the Government of Lesotho.

Lesotho is emerging as one of Africa's significant new diamond producers, hosting Gem Diamonds' Letseng Mine, Firestone's Liqhobong Mine and Namakwa Diamonds' Kao Mine.

Firestone held successful diamond sales in Antwerp, Belgium, in July and September. A total of 195,330 carats were sold, including a second stone worth more than US$1 million.

The average value was US$69 per carat and total sale proceeds amounted to US$13.5 million.

Since production commenced in quarter four of 2016, the company has sold all 505,706 carats recovered, for US$41.3 million, at an average value of US$82 per carat.

From an operational perspective, the company continues to treat ore at nameplate capacity, and is recovering the anticipated reserve grades within operating cost expectations.

The Board anticipates an improvement in the occurrence of higher quality diamonds as the higher grade kimberlite areas are mined and treated. Management continues to analyse the variability in average diamond values that it has experienced to date, which has seen the average values achieved range from US$107 to US$69 per carat.

In the Board's view, this is not an uncommon situation in the early production stages of a new mine, and, in Liqhobong's case, the Board believes that the company's true value proposition will become clearer as more representative volumes of all the ore facies are mined and treated.

Firestone continues to work with its consultants in regards to finalising a new mine plan based on a revision of the expected average LOM dollar per carat value which it anticipates will be higher than the average value realised at its two most recent sales.