Modern Mining January 2015

DIAMONDS

weeks of becoming CEO, he had secured the funding for Liqhobong and in mid-January 2014 Firestone was able to announce a fund- ing package of US$140 million and a project debt facility of US$82,4 million, no mean achievement given then – and indeed current – conditions in the resources industry and the extreme difficulty of raising money for new mining projects of any type. Recalling this period, Brown says there was a great deal of scepticism in the market about Firestone’s plans. “This was evident during the road show we undertook at this time,” he recalls. “People asked me how a company with a market cap of around US$35 million could possibly expect to raise an equity/ debt package of over US$220 million. They said, ‘You’re joking – it can’t be done.’ But I’m pleased to say we proved them wrong. I attribute our success in great part to the qual- ity of our DFS, which was completed by DRA in 2012, revised in late 2013 and thoroughly reviewed by independent experts. In addition, we had put together a well thought-out plan for project implementation over a two-year period which was realistic and attainable and which impressed the market.” The revised DFS indicates a base case project NPV at 8 % of US$379 million and a post-tax IRR of 30 % but with a significant upside case based on the potential revenues from larger diamonds of 100 carats plus. The upside case would deliver an NPV at 8 % of US$728 million and an IRR of 40 %. Explaining these figures, Brown says the main pipe at Liqhobong is something of an anomaly, with most of the neighbouring mines and projects having kimberlites which are extremely low

Firestone that, despite being a cash-strapped junior, it was determined to develop a Tier 1 mine at Liqhobong. At the time of being appointed CEO of Firestone, Brown said, “I am extremely excited by the opportunity that Firestone provides and I look forward to bringing all my experience and passion for diamonds to the company as it moves to its next phase of developing the Liqhobong deposit. After two years out of the diamond industry – an industry that has been a huge part of my life for 20 years – I am thor- oughly revitalised, and ready to help Firestone bring a high quality, near-term asset on stream.” Revitalised he has proved to be. Within

Liqhobong in winter. This photo, taken in 2012, shows the original plant at the site which has now been removed.

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Bell ADTs from Turnkey Civils Lesotho (TCL), shortly after arriving on site. TCL is the contractor for the Residue Storage Facility (RSF) and moved on to site in June last year.

58  MODERN MINING  January 2015