Firestone Diamonds expects to jointly develop its £25 million Jwaneng project with De Beers and the Botswana government.

Firestone Diamonds expects to jointly develop its £25 million Jwaneng project with De Beers and the Botswana government.

Gem miner and explorer Firestone Diamonds expresses ‘confidence’ in prospects despite a 40-fold annual loss increase to £10.9 million. The AIM-quoted company, whose interests are primarily focused on Botswana and South Africa, increased revenues 22 per cent to £4 million in the year to June, helped by a £2.3 million payment from diamond giant De Beers on termination of a joint venture in South Africa, and workforce costs reduced 33 per cent to £801,000. But a 409 per cent leap in goodwill, mineral rights and mineral properties impairment charges resulted in a hefty increase in the loss for the year.

Noting that diamond companies had to weather a 50 per cent fall in rough gem prices from previous peaks in the last quarter of 2008, chairman James Kenny says Firestone’s BK11 kimberlite project in the Orapa area of Botswana could be brought into production in the middle of next year, subject to nearly-completed evaluation. If so, he suggests the project, holding an estimated 830,000 carats, could yield potential revenues of £12.5 million a year at margins of more than 50 per cent.

According to Kenny, Firestone now expects to finalise and sign a delayed joint venture agreement with Debswana, diamond giant De Beers’ 50-50 operation with the Botswana government, to develop the £25 million Jwaneng diamond tailings project. The company, which replenished its coffers with a £5 million funding at 85p in June 2008 and a further £7.2 million at a much lower 20p last July, is considering joint venture offers to develop what it maintains is the potentially major Tsabong project, also in Botswana, with ‘85 known kimberlites’.