Liqhobong Definitive Feasibility Study

25 October 2012

Firestone Diamonds plc

("Firestone" or the "Company")

Liqhobong Definitive Feasibility Study

Firestone (AIM: FDI), the AIM-quoted diamond mining and exploration company is pleased to announce the results of its SAMREC compliant Definitive Feasibility Study ("DFS") for the Liqhobong Diamond Project in Lesotho. Firestone Diamonds has a 75% interest in the project with the Government of Lesotho holding the remaining 25%.

DFS Highlights & Key Assumptions

·; Pre tax Net Present Value of US$441 million applying an 8% discount rate

·; 44% internal rate of return with 28 month payback period (post tax IRR of 40% and NPV (applying an 8% discount rate) of circa US$335million)

·; Average annual production of 1.2 million carats commencing 2015

·; 15 year life of open pit mine

·; 3.6 million run of mine tonnes per annum

·; Total capital expenditure for the plant and associated infrastructure of US$167 million

·; Average diamond price of US$100/ct, escalated at 3% real per annum, excluding full potential from recovery of large and special stones

The company is progressing discussions with debt providers and considering other marketing arrangements to minimise dilution to shareholders.

Tim Wilkes, Chief Executive Officer of Firestone, commented:

"We are pleased to announce these highly attractive results for the Liqhobong DFS, which confirm management's belief in the robustness of the project. There could also be considerable upside from the recovery of larger special diamonds that have been catered for in the design of the new treatment plant. Our project is also expected to have a very positive impact for Lesotho, both from a revenue and employment perspective.

Firestone is committed to its strategy of becoming a mid-tier diamond producer of over 1 million carats and I look forward to realising the significant potential that exists at Liqhobong."

A copy of the DFS presentation will be made available on the Company's website: www.firestonediamonds.com.

Further details from the DFS are set out below:

The DFS was completed by DRA Projects Limited and the resource was signed off independently by Zstar Mineral Resource Consultants (Pty) Ltd., with input from AC Howe and MPH Consulting Limited from Canada.

The DFS was designed and completed with a +/- cost accuracy of 5%.

Mining

The open pit has been designed with three stripping cuts with an average stripping ratio of 2,26 and will be mined to 393 metres below surface over its 15 year life of mine ("LOM"). The Kimberlite remains open and unsampled below this level.

The current indicated and inferred resource is approximately 89 million tonnes containing an estimated 29 million carats (down to 510 metres). The open pit resource of 55 million tonnes and 17.6 million carats can be mined at an average LOM grade of approximately 32 carats per hundred tonnes. Scope exists to extend the LOM by means of underground mining post 2030.

Processing

The main treatment plant has been designed to treat 500 tonnes of ore per hour which equates to 3.6 million tonnes per annum and consists of purpose-built crushing, scrubbing, screening and recovery technology. Owing to the invaluable ore information obtained from treating the main pipe ore via the Pilot Plant, it has been possible to cater for the recovery of larger, +400 carat, diamonds in the design of the Main Treatment Plant. Mining and processing will be contractor operated.

Development Schedule

It is envisaged that the plant and infrastructure will be completed in approximately 24 months with commissioning expected in the second half of 2015.

A detailed breakdown of the feasibility economics and the capital costs are outlines below:

* 3% price escalation

Sensitivity analysis:

Project NPV (US$'m)

Project IRR

For more information contact:

Firestone Diamonds

Tim Wilkes +27 (79)8719686/+44 20 8741 7810

Mirabaud Securities (Broker) +44 20 7878 3360

Rory Scott

N+1 Brewin (Nominated Adviser) +44 20 3201 3710

Jonny Franklin-Adams

Alex Wright

Tavistock Communications

Jos Simson / Emily Fenton +44 20 9203 150/+44 7899 870 450

Background information on Firestone Diamonds:

Firestone Diamonds plc is an international diamond mining and exploration company with operations focused on Lesotho and Botswana. Firestone currently operates the Liqhobong Mine in Lesotho and is also one of the largest holder of mineral rights in Botswana's diamondiferous kimberlite fields, controlling approximately 5,510 square kilometres including prospecting licenses around the major Orapa mine, as well as the entire Kokong and Tsabong kimberlite fields. In addition to Liqhobong and BK11, Firestone has 128 kimberlites in its portfolio, of which 30 have been proven to be diamondiferous to date.

Lesotho is emerging as one of Africa's significant new diamond producers, and hosts Gem Diamonds' Letseng Mine, Firestone's Liqhobong Mine as well as Namakwa Diamonds' Kao Mine and the Mothae development project.

The information in this statement has been reviewed by Mr. Tim Wilkes, BSc, Pr Sci Nat, who is a qualified person for purposes of the AIM Guidance Note for Mining, Oil and Gas Companies. Mr. Wilkes is Chief Executive Officer of Firestone Diamonds plc and has over 30 years' experience in diamond exploration, mineral resource management and mining. Mr. Wilkes is a member of the sub-committee for diamonds of the South African Mineral Resource Committee (SAMREC). The resource estimates in this statement have been compiled in accordance with the SAMREC Code.

Glossary of terms used

Forward-looking Statements

This press release contains certain forward-looking information. All information, other than information regarding historical fact, that addresses activities, events or developments that Firestone believes, expects or anticipates will or may occur in the future is forward-looking information. Forward-looking information contained in this press release includes, but may not be limited to, the future plans and objectives of Firestone and their anticipated future growth, mineral resource estimates and the anticipated exploration and development activities of Firestone. The foregoing and any other forward-looking information contained in this press release reflects the current expectations, assumptions or beliefs of Firestone based on information currently available to Firestone. With respect to the forward-looking information contained in this press release, Firestone has made assumptions regarding, among other things: general business, economic and mining industry conditions; and it has also been assumed that no material adverse change in the price of precious and/or base metals occurs, no unusual geological or technical problems occur and no significant events occur outside of the normal course of Firestone's respective business.

Such forward-looking information is subject to a number of risks and uncertainties that may cause actual results or events to differ materially from current expectations, including: risks normally incidental to exploration and development of mineral properties; uncertainties in the interpretation of results from drilling and test work; the possibility that future exploration, development or mining results will not be consistent with expectations; uncertainty of mineral resources estimates; adverse changes in precious and/or base metal prices; and future unforeseen liabilities.

 Any mineral resource figures referred to in this press release are estimates and no assurances can be given that the indicated levels of minerals will be produced. Such estimates are expressions of judgment based on knowledge, mining experience, analysis of drilling results and industry practices. Valid estimates made at a given time may significantly change when new information becomes available. While Firestone believes that the mineral resource estimates in respect of their respective properties are well established, by their nature mineral resource estimates are imprecise and depend, to a certain extent, upon statistical inferences which may ultimately prove unreliable. If such mineral resource estimates are inaccurate or are reduced in the future, this could have a material adverse impact on Firestone, as applicable. Due to the uncertainty that may be attached to inferred mineral resources, it cannot be assumed that all or any part of an inferred mineral resource will be upgraded to an indicated or measured mineral resource as a result of continued exploration.