Firestone Diamonds recovers high quality diamonds at Liqhobong mine

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Shares in Firestone Diamonds (LON:FDI) rallied 3 percent this morning after the AIM quoted mining company recovered high quality diamonds from the K5 kimberlite unit at its Liqhobong mine in Lesotho.

The recoveries from a 3,000 tonne sample of K5 material included a 33 carat white diamond and a high quality 8 carat white diamond. Notably, the sample produced the mine’s first yellow and pink diamonds weighing 8 and 1.7 carats respectively.

Firestone saw the results as a confirmation that high quality diamonds are present at the main pipe at Liqhobong.

The company added that the test results bode well for the mining operations at K5 that are due to start in the second half of the year.

“We are very excited about the results of our first tests of the high grade K5 unit at the main pipe at Liqhobong,” said chief executive of Firestone Diamonds Tim Wilkes.

“The recovery of high quality diamonds, including our first fancy yellow and our first pink diamond, confirms that there is much upside to the value of the main pipe.”

The K5 unit is the highest grade of the four geological units in the Main Pipe, with an average resource grade of 45 carats per hundred tonnes (cpht). The K2 and K4 kimberlite units that have been mined to date in 2011 have an average grade of 28 cpht.

Firestone has hired Dowding Reynard and Associates to carry out the definitive feasibility study and engineering work for the second plant at Liqhobong.

The second plant is planned to have an annual processing capacity of 4.2 million tonnes, adding to the operating first plant’s capacity of 0.4 million tonnes per annum.

Meanwhile, Firestone Diamonds is due to hold its next diamond sale in Gaborone, Botswana in late August.

The company said today that the sale is expected to be significantly larger than the last tender in June, when it sold 14,248 carats for gross proceeds of about US$2 million.

Firestone has also provided an update from its BK11 mine in Botswana, reporting significant increases in diamond grades achieved at the production plant after a secondary crushing circuit was installed in the beginning of July.

Investors cheered the update, sending shares in Firestone up 0.87 pence (3 percent) to trade at 29.5 pence in early deals. The company currently has a market cap of £92.7 million.