Firestone Diamonds Records First Revenue As Diamond Output Begins

27th Mar 2018 14:33

LONDON (Alliance News) - Miner Firestone Diamonds PLC reported on Tuesday its first ever revenue in the first half of its financial year after its Liqhobong mine in Lesotho started producing, beating expectations.

Firestone posted revenue of USD28.0 million in the six months to December, after none in the year prior, after Liqhobong began producing commercially in July.

Firestone's pretax loss widened to USD10.3 million compared to USD4.1 million a year before, despite the start of production, as it booked increased financed costs of USD6.4 million from USD1.2 million due to interest payments as well as higher tax payments.

It treated 1.9 million tonnes of ore to the end of the year, suggesting it would have beaten its 3.6 million tonne annual target. The company recovered a total of 379,716 carats in the period, including a 134 carat gem-quality light yellow diamond. The average value per carat was USD74.00 in the first half.

Since period end, in February, Firestone held its first diamond sale, with all 114,887 carats on offer sold for USD9.4 million, at an average value of USD82.00 per carat.

Chief Executive Stuart Brown said: "In our first six months of full scale production at Liqhobong, processing rates were above expectations, while costs continued to remain below our targeted levels. To address the lower than expected diamond values, we announced a revised mine plan at the end of the period, which is designed to maximise cash flow in the shorter term while we address diamond value recoveries.

"The company entered the second half of the financial year on a strong financial footing, having raised USD25.0 million at the end of the period, while also proposing revised terms on its credit facility, as it embarks on its revised mining plan."

Firestone shares were down 2.1% on Tuesday at 7.00 pence each.

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