Firestone Diamonds reports higher diamond recovery in first quarter

Firestone Diamonds issued its quarterly update on operations at its Liqhobong Diamond Mine for the quarter ended 30 September on Wednesday, reporting a lost time injury-free quarter, down from one lost time injury in the quarter immediately prior.

The AIM-traded firm noted the recovery of a 98 carat light yellow makeable stone during the period, which was sold in October, and said its diamond recoveries totalled 201,091 carats for the first quarter, rising from 208,572 carats in the fourth quarter.

Its grade was 21 carats per hundred tonnes, slipping from 23 carats per hundred tonnes quarter-on-quarter, while ore treated totalled 963,986 tonnes, rising from 904,902 tonnes.

Waste tonnes moved for the quarter was 1,379,758 tonnes, rising from 1,337,281 tonnes in the prior quarter.

The company said its operating cost of $10.32 per tonne treated was below its guidance, and was down from $12.57 per tonne treated in the fourth quarter.

A single sale took place during the quarter, when 168,612 carats were sold, down from 177,521 carats quarter-on-quarter.

That sale realised revenue of $10.6m, down from $12.7m, at an average value of $63 per carat, slipping from $71 per carat.

Firestone’s cash balance as at 30 September totalled $21.8m, down from $26.3m, after interest and capital repayment to ABSA of $2.9m for the period.

Post-period end, Firestone noted that power supply to the mine was interrupted on 1 October, since which time its treatment plant had temporarily suspended operation until power is restored.

The company said it was anticipating that production at the mine would restart in early November, once the rented diesel generators were on site and connected to the mine's electrical infrastructure.

“The first quarter performance was again solid from an operational perspective,” said Firestone Diamonds chief executive officer Paul Bosma.

“However, from a market perspective, pricing remains subdued.

“The company continues to engage with its debtholders to ensure it can sustain operations through the current downturn and further announcements in this regard can be expected in due course.”

Bosma said the recent power interruption was an “unexpected setback” for the company, but added that it was “doing our utmost” to limit the negative impact on production by renting generators to get operations up and running again until the grid power was back online and stable.

“We will advise on any adjustments to guidance in future quarterly updates.”