Firestone Diamonds reports 199,007 carats were recovered Liqhobong Diamond Mine in Lesotho (owned 75% by Firestone and 25% by the Gov't of Lesotho) during the quarter ended 30 September 2017, ending the period, "slightly above all our anticipated production targets", said CEO Stuart Brown. Included in the recoveries were the largest diamond recovered to date, a 134 carat light yellow stone, as well as 45 specials (larger than 10.8 carats). This compares to 54 specials in the previous quarter. The 134 carat yellow diamond will be included in its next sale in Antwerp.
The company says that mining is proceeding to plan, and they are gradually extending operations to additional areas in the pit. Firestone expects to be able to fully optimise operations as more detailed knowledge of the pit is acquired over the coming months, and as previously announced is working on the details of a revised mine plan which will be published in due course. They also note that at the end of the quarter, Liqhobong maintained its outstanding health and safety record, having reached almost five million man hours worked without a single Lost Time Injury since the start of the project.
A total of 195,330 carats were sold in the quarter, including Liqhobong's second >US$1 million stone, a 45 carat clean white stone. The average price per carat achieved during the period was US$69, yielding proceeds of US$13.5 million. Since commencement of production in Q4 CY2016, Firestone has sold all 505,706 carats recovered, for $41.3 million, at an average value of US$82 per carat. The overall market environment has seen a combination of oversupply and, they believe the Indian de-monetisation program is still having an impact on the Run of Mine goods (+11 diamond sieve and smaller). Furthermore, the summer months are traditionally the quietest time in the rough selling season. In the medium term, the Board expects market conditions to improve.
CEO Sturt Brown commented, "While the previously announced average value per carat was somewhat disappointing, this is reflective of the combination of the lower than expected occurrence of better quality diamonds recovered during the quarter, the widely reported current market conditions where sales are weaker in the finer sizes and weaker demand due to the time of the year." He continues, saying, We have started moving to other areas in the pit and as expected, we have seen the start of some improvement in average value per carat recovered. However, as highlighted in previous announcements, mining will progress into all areas of the pit in time and it will be some while before more representative volumes of all the ore types are mined and we can better establish our revised average value per carat for planning purposes. As with many diamond deposits, the average value realised per carat may continue to show significant variability on a sale by sale basis. Pleasingly, the quarter ended on a highlight with the announcement of the recovery of our second plus 100 carat stone at the end of September."