Modern Mining January 2020

Weak diamond market challenges Liqhobong

In its recently released final results for the year ended 30 June 2019, AIM-listed Firestone Diamonds, which operates the Liqhobong diamond mine in Lesotho, says that the despite the mine turning in a good operational performance, revenues declined over the reporting period due to a weak diamond market and a reduction in carats sold. Paul Bosma, Chief Executive Officer, commented: “The year’s performance was solid from an operational perspective, as we delivered results within our guidance range for all items within our control. From a diamond pricing perspective, it was a tough year, particularly for the smaller, lower value goods, and these conditions are expected to persist for the foreseeable future until the end of 2020 when global rough supply is expected to reduce. “Due to the expectations of a con- tinued subdued pricing environment, combined with the recent power dis- ruption to operations, the company has continued to engage with its debtholders

and has made good progress to ensure it can sustain operations through the cur- rent downturn. “The operations performed solidly dur- ing the year, achieving guidance in respect of the quantity of carats recovered, ore and waste tonnes mined, and exceeding guid- ance in respect of operating costs. A record quantity of 8,1 million tonnes was mined during the year in terms of the most recent mine plan, which is 1,4 million tonnes more than the 6,7 million tonnes mined in the pre- vious year and includes 4,4 million tonnes of waste (2018: 2,9 million tonnes). “The objective of the mine plan is to deliver the best returns in the medium term at low risk whilst at the same time offering optionality of taking advantage of the longer life of mine should the average diamond values increase or should there be an improvement in market conditions,” he continued. “Operating costs contin- ued to be very well managed and were well below guidance for the year, both in local currency terms and in US dollar

Paul Bosma, CEO of Firestone Diamonds.

terms, due to a weaker Lesotho Maloti.” Bosma said that in order for Firestone to thrive, it needed to regularly recover larger, better quality diamonds and to see an increase in the price it received for its ROM diamonds. “We expect ROM prices to recover, assuming consumer demand for diamond jewellery remains stable, as sup- ply decreases as predicted through 2020 and 2021 due to the closure of mines, most notably the Argyle mine in Australia.” 

January 2020  MODERN MINING  9