Firestone Diamonds plc  providing  its quarterly update on operations at its Liqhobong Diamond Mine for the quarter ended September 30, 2019 (Q1 FY 2020), reported diamond recoveries of 201,091 carats, below the previous quarter’s (Q4 FY2019) recovery of 208,572 carats.

During the period, 963,986 tonnes of ore were treated at  Liqhobong. This was the highest quantity of tonnes treated during a quarter since a year ago in Q1 FY 2019, and 7% more tonnes than the previous quarter's 904,902 tonnes. “The higher quantity of tonnes treated was due to better equipment availability and higher plant throughput rate,” the Company said.

During Q1 FY 2020, mining was  predominantly carried out in the higher-grade southern part of the pit.

“Although a higher quantity of tonnes was treated during the quarter, total carats recovered was 4% less at 201,091 carats (Q4-FY19: 208,572 carats), as a result of a lower recovered grade of 20.9 cpht (Q4-FY19: 23.0 cpht),” Firestone noted. “The recovered grade continued to be lower than the expected reserve grade, which, as reported previously, seems to result from treating harder, more competent ore as the pit becomes deeper.”

The Company’s operating costs for Q1 FY 2020 amounted to US$10.32 per tonne treated, which was below guidance; and compared to US$12.57 per tonne treated in Q4-FY19.

Firestone reported a  single sale during the quarter at which  168,612 carats were sold  as compared to 177,521 carats sold in Q4 FY 2019. The sale raised a revenue of US$10.6 million (Q4 FY2019: US$12.7 million); realising  at an average value of US$63 per carat (Q4-FY2019: US$71 per carat).

“Average diamond values were lower than the previous quarter despite the sale of several notable stones which included a 37 carat fancy pink stone and a 55 carat fancy yellow stone, due mainly to the sale of fewer high value stones and a slightly higher proportion of smaller goods,” Firestone stated.

The Company went on to say: “The prices realised for the smaller goods that make up the bulk of our production by volume, remain subdued, impacted by a build-up of rough and polished inventory in the midstream. Prices are expected to increase towards the end of 2020 as rough supply decreases as a result of continued reduced sales volumes by De Beers and Alrosa and the anticipated closure of the Argyle mine in Australia.”

The Company also reported the recovery of a 98 carat light yellow makeable stone in the period, which was sold in October.

Firestone’s cash balance as at  September 30, 2019 stood at US$21.8 million (Q4 FY2019: US$26.3 million) after interest and capital repayment to ABSA of US$2.9 million for the quarter. 

The Company noted: “As announced previously, power supply to the mine was interrupted on 1 October, since which time, the mine's treatment plant has temporarily suspended operation until power is restored. The Company anticipates that production at the mine will recommence in early November, once the rented diesel generators are on site and connected to the mine's electrical infrastructure.”

Paul Bosma, Chief Executive Officer, commented: "The first quarter performance was again solid from an operational perspective. However, from a market perspective, pricing remains subdued. The Company continues to engage with its debtholders to ensure it can sustain operations through the current downturn and further announcements in this regard can be expected in due course.”