Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Firestone Diamonds (LON:FDI) announced Tuesday the recovery of very rare type 2 diamonds, as well as an even more rare blue diamond, from its Liqhobong mine in Lesotho
Both finds were highly significant, said the company in a press release, especially the batch of 28 type 2a diamonds as these occur mostly as high quality, high colour crystals and are extremely unusual.
The world’s diamond production comprises of approximately 98% of type 1A diamonds, with less than 2% being high quality, white and colourless type 2 stones.
The identification of a small blue diamond, said Firestone, confirmed the Liqhobong mine’s diverse diamond assortment.
The mine is also still relatively untested in terms of its ability to produce diamonds of high quality and size, the company added.
The diamonds which were recovered in August and September, are a very exciting find, said independent valuation consultant firm First Element, especially the type 2.
“The increased recovery of unbroken, higher quality good colour crystals in the middle and coarser size fractions currently on tender should bolster the prices of the company’s stones,” said First Element’s CEO, Johan Erikson.
Firestone added that a 27 carat, fragmented stone was also recovered in September and appears to have originated from a stone in excess of 200 carats. At this time, the pilot plant at the mine is not able to recover diamonds with dimensions bigger than 25mm, such as the rock in question.
“The recovery of the rare type 2 diamonds and the increase in quality and the variety of colour endorses the directors belief that the Liqhobong resource contains significant upside, which will be fully realised once production is increased via a much larger, fit for purpose treatment plant,” Firestone’s chief executive Tim Wilkes said.
Wilkes said in May that while prices for better-quality diamonds are strengthening and, in some categories, creeping up to levels not seen since June 2011, the prices of brown diamonds, near-gem quality and small stones remains depressed and under pressure.
The diamond miner expects to release a definitive feasibility study for the expansion of production from its pilot plant. Increasing production from the current 200,000 carats per annum to over 1 million carats by 2015, with a new treatment plant to handle the large gems being found at Liqhobong.
Firestone began operating its pilot plant in June 2011, since then it said it has recovered significant quantities of vivid and yellow fancy diamonds, two small pink diamonds and a number of high quality white stones and can now confirm the presence of rare type 2 diamonds.
Comments
James
It looks like every mine in Lesotho is increasing its production, i wonder what strategies that tiny impoverished country is putting in place to maximize the benefits before they are left with empty pit holes and the legacy of producing large stones yet the country remains poor. Its a high time you wake up guys before it’s too late. Put policies in place and strengthen your institutions to catch up with the growing industry.