Firestone Diamonds is concentrating its resources on the BK11 kimberlite project in the highly prospective Orapa region of Botswana and its tailings toll treatment projects. Bulk sampling evaluation at BK11 continues to recover high grade, high value stones, and drilling has so far defined a resource of some 830,000 carats. Management believes BK11 could generate annual revenues of over $20m (£12m) at over 50 per cent margins. Following ongoing larger volume work to confirm grade and diamond value, it hopes to make a final mine development decision before the year-end, and production could commence in mid-2010.
With Firestone able to source most of the required plant from its discontinued South African operations, the £7.2m of new equity issued in July covers remaining development costs to bring BK11 into production. Longer term, BK11 could form the heart of a regional operation exploiting several other kimberlites in the Orapa area. Evaluation work is planned to start next year on the nearby BK16 kimberlite that could offer similar potential to BK11.