2nd Oct 2014 07:36
LONDON (Alliance News) - Firestone Diamonds PLC Thursday reported a narrowed loss for the 2014 financial year despite a drop in revenue following the closure of its plant in Lesotho last year.
The company reported a pretax loss of USD11.2 million in the year ended June 30, from a USD22.6 million loss in the 2013 financial year. The narrowed loss is due to impairment losses recorded in 2013 of USD3.8 million, of which there were none in 2014, and reductions in maintenance, administrative and depreciation costs.
Revenue decreased to USD3.9 million in the 2014 financial year from USD15.4 million a year earlier. The reduction is due to its pilot plant at Liqhobong, Lesotho, having operated for only four months before being closed in October 2013.
In 2013, Firestone announced it would close the plant and cease production after it produced continued operating losses. The closure of the plant allowed site preparation to begin for the construction of the Liqhobong Mine Development project, it said.
All of Firestone's revenue came from its gem inventory, which were all sold following the closure of the plant. A total of 58,086 carats were sold during the year at an average price of USD68 per carat.
The pilot plant is currently being decommissioned and removed, it said.
The Liqhobong project is expected to take two years to build and commission and is expected to be completed in 2016 and produce over 1 million carats of diamonds per year.
"The past year has seen some very exciting developments for Firestone culminating in the company now having the required management and financing in place to realise its strategy of becoming a mid-tier, plus 1 million carat per year diamond producer," said Chairman Lucio Genovese.
The Liqhobong project is fully funded through to completion. The company reported a cash balance of USD107 million at June 30, after securing a USD222.4 million funding package announced in May.
"I am particularly pleased that we have now completed the funding required to enable the development of the project in order to achieve its full potential after so many years in preparation and planning," said Genovese.
Firestone expects to complete its disposal of its BK11 mine in northern Botswana in the first-half of 2015, to then focus on the Liqhobong project, said the company in a statement.
Firestone shares were down 1.2% to 35.80 pence per share Thursday morning.
By Joshua Warner; [email protected]; @JoshAlliance
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
FDI.L