Firestone Diamonds Plc,┬áthe AIM-quoted mining and exploration company, punched the air┬áthis week as they were granted the mining licence for BK 11 that will give it a grip on Botswana gemstones and bolster┬áits ambitions to list on BSE.
Director of Mineral Affairs, Nchidzi Mmolawa, told The Telegraph on Monday that Firestone Diamonds has been granted the licence and government will not take equity in the venture.
“They were granted mining licence last week,” he said.
BK 11 is run under┬á Monak Ventures ÔÇö┬á is near Orapa mine, just┬á within the same vicinity as┬á African Diamonds’ AK 6ÔÇöin an area that has won the label of being the best diamond address in the world.
There are already three existing diamond mines in the areaÔÇöall owned and run by Debswana. The mines are: Damtshaa, Letlhakane and Orapa while African Diamonds is working on plans to open its AK 6 mine ÔÇô within the same area ÔÇöby the end of next year.
The company will pay the standard 10 percent royalty fees on the gross revenue and corporate tax to government during the time of its operation.
According to the licence, the company is expected to┬ásell its diamonds within Botswana through an open┬átender process┬á in a bid to give weight to government’s proposed diamonds exchange, whose details are still being fine tuned.
“Development work commenced at BK11 at the beginning of 2010 and Phase 1 of the production plant, which has a capacity of approximately 650,000 tonnes per annum, was completed on schedule in Q2 2010.┬á
“Phase 1 of the production plant has now commenced operation following grant of the mining licence.┬á Work on Phase 2 of the production plant, which will increase capacity to 1,500,000 tonnes per annum, is on target for completion as originally scheduled in Q3 2010, and full production is expected to be reached in Q4 2010,” the company stated on Monday.
Under the plan,┬á BK11┬á will produce┬á approximately 11.5 million tonnes of kimberlite┬á that┬á will be mined at an average grade of 8.5 carats per hundred tonnes┬á┬á giving total production of approximately 1 million carats over a 10 year mine life at an average price of $155 per carat.
Firestone Diamonds Chief Executive Officer, Phillip Kenny, said: “The commencement of production at BK11 is a major milestone for Firestone as the company is now one of only three listed kimberlite producers worldwide outside of the major mining companies.┬á It is an exceptional achievement to have reached this point in just over 3 years from being granted a prospecting licence, which is a reflection of the significant capability of our management and staff in Botswana and South Africa, and of the valuable cooperation that we have received from the Botswana Geological Survey, Department of Mines, and Ministry of Minerals, Energy & Water Resources.┬á
“The combination of cash flow from production at BK11, an extensive portfolio of kimberlites in the Orapa and Tsabong kimberlite fields and exciting toll treatment opportunities positions Firestone very well for significant growth in Botswana, and with the substantial shortfall in rough diamond supply projected in the coming years we are confident about Firestone’s future prospects.”
Firestone Diamonds has┬áspecific emphasis on Botswana and, to a certain extent, South Africa, which is the fourth┬á major┬á company to announce plans to list on BSE since the beginning of the year, giving indications that the local economy might be emerging out of the worst economic downturn since┬á World War II.
“I think the granting of the mining licence will give the company the necessary power to move forward with its intention to list on the Botswana Stock Exchange ( BSE),” Chief Executive Officer of Capital Securities in Gaborone, Gregory Matseke, said.
BK 11┬á is┬á 20 kilometers south-east of Orapa mine and five kilometers north east of┬á African Diamonds’┬á AK 6 proposed mineÔÇö during the second quarter of 2010.
Firestone Diamonds Plc┬á is also involved in diamond exploration near Jwaneng mine and Tsabong areas where its finds have been┬á described as “ encouraging”.
Early this month, Debswana Diamond Company gave it the green light to go ahead with the┬á Jwaneng Modular Tailings Treatment Project┬á aimed at re-capturing the diamond that slipped through the old technology that was used by the mine.
Jwaneng mine┬á project┬á is expected to┬á involve roughly 30 million tonnes of┬á┬á man-made hill┬á over the last┬á generation at the world’s richest diamond mine.
The project, which is likely to be replicated across all Debswana mines will┬áadd┬áUS $ 150 million to the Firestone Diamonds purse.