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.
Africa-focused Firestone Diamonds (LON:FDI) has posted a 52% jump in revenues for the year ending in June 2013.
According to its final results, the London-listed miner brought in £9.9 million while decreasing its cash operating loss by 88% to £1 million.
Since 2012, the company has been revising its strategy by focusing on its Liqhobong mine in Lesotho. Firestone’s goal is to produce over one million carats per year by 2015.
So far, Liqhobong has produced about 325,000 carats. In its year-end report, the company says its next step will be to shut the pilot plant and begin construction of a main treatment plant.
Liqhobong has total indicated and inferred reserves of 29 million carats with an estimated diamond value of $100 per carat.
As part of its restructuring process, the company appoined a new CEO in early September – former De Beers CFO, Stuart Brown.
Firestone operates five projects in Botswana and one in Lesotho. The company acquired Liqhobong in 2010 and began production in 2011.
Its other production-stage project, BK11 in Botswana, is currently under care and maintenance as the company focuses on Lesotho.
Over the past year, Firestone did not do any exploration or evaluation work at its Botswana properties.
