Firestone to recover over 820K Cts

Sales over 191K carats

Diamonds in Q2

Firestone Diamonds plc provides its quarterly update on operations at its Liqhobong Diamond Mine for the quarter ended 31 December 2018; Q2 of the Company's 2019 FY & says recovery of diamonds of 224,947 carats over the previous Q1 of diamond that recovered was 240,733 carats. Resulting in a year-to-date total of 465,680 carats, on track with guidance of between 820,000 and 870,000 carats recovered for FY2019.

A total of 191,735 carats sold in the second quarter of the financial year is fewer than Q1 sales of 194,206 carats, while realising revenue of US$13.9 million is earned higher over Q1 had earned US$13.5 million . During the Q2 recovery of a 46-carat white diamond in December remained notable.

Average value of US$72 per carat is up over Q1 of US$70 per carat, which is below expectation mainly due to deterioration in prices received for the smaller, lower value stones. Despite the continued subdued conditions at the lower value end of the market, the mine continued to generate positive cash flows after finance costs; and Net cash as at 31 December 2018 of US$26.2 million over Q1 of US$25.7 million.

In the process of Post Quarter events, a total of 125,871 carats sold realising total proceeds of US$9.1 million, in the fourth sale of FY2019 which concluded on 1 February. Average value realised of US$72 per carat, with pricing received for the smaller, lower value stones remaining stable. A number of special stones were sold including the 46 carat stone recovered in December which sold for more than US$1 million and A slower start to the second half due to equipment failure in the plant during January, which is expected to impact tonnes treated and carats recovered for Q3.

Paul Bosma, Chief Executive Officer, commented, “We had a reasonable second quarter, barring a scrubber failure sustained in November, ending the financial half year with all our production parameters on track to meet guidance by year end.

The demand for the smaller, lower value stones deteriorated further during the quarter albeit that it stabilised at the December sale and remained at the same level for the January sale. Pleasingly the demand for larger, better quality stones remains strong as was evidenced by the pricing received for the 46 carat white stone that was sold during the first sale of 2019.

During the current rainy season, our mine plan provides for mining the northern high lying lower grade ore blocks, mainly from the K2 kimberlite facies and we will use the opportunity to monitor any changes to diamond assortment.

The life of mine work showed the potential of further open pit expansion at the Liqhobong mine. We have another 2 years to make a final decision on the optimal cut 3 mine designs which will be driven mainly by diamond price and price growth assumptions.”