JOHANNESBURG (miningweekly.com) – The production plant at Aim-listed Firestone Diamonds’ BK11 project, in northern Botswana, will ramp up to an output of 1,5-million tons a year by the third quarter of next year.
The diamond explorer and developer told shareholders in a statement on Thursday that commercial production at BK11 would commence ahead of schedule in the second quarter of 2010.
Firestone had expected to make a development decision on the project by the fourth quarter of this year, following a final bulk-sampling evaluation phase.
“Commencing development of a new mine at BK11 is a major milestone for Firestone Diamonds. The BK11 mine will give us a very solid foundation from which to further develop our exciting portfolio of projects and opportunities in Botswana. With the projected shortfall in rough diamond supply expected to drive diamond prices higher in [the] coming years, we believe that the prospects for Firestone are extremely good,” Firestone CEO Philip Kenny commented.
The diamond explorer noted that it planned to increase its stake in BK11 to 90%, earning a 10% stake from its Botswana partners, by financing the partners’ share of the mine development costs.
Firestone, in November, said that it had already raised the required mine development funding of £5-million, as part of a £7,2-million share placement it undertook in July.
Mining would start in the KW zone of the BK11 project, which would result in revenues of about $24-million a year at operating margins of 60%.
Any further increases in diamond prices, which the company saw as likely owing to a projected shortfall in the diamond supply in the coming years, would add substantially to the potential profitability of BK11, it stated.
A modelling exercise done on BK11 had shown an overall value of $137/ct, while diamonds from the KW zone had a higher modelled value of $157/ct.
Meanwhile, the production plant, which was being relocated from the company’s Bonte Koe mine, in South Africa’s Northern Cape province, would be commissioned in two phases.
Phase one would see production starting at about 650 000 t/y by the second quarter of the year.
Firestone would make a number of changes to the plant flow sheet based on ore dressing data obtained from the operation of a pilot plant over the past five months.
The addition of larger scrubbing circuits was expected to reduce the amount of material being sent to the dense-media separation section, which would result in higher plant capacity being achieved, the company stated.
The diamond explorer highlighted that it was also in negotiations with the Botswana Power Corporation for the construction of a 14-km power line from Orapa to BK11.
Firestone had sufficient generating capacity to operate the plant in the meantime, but this would add $1/t to operating costs until grid power was made available.
A sufficient water supply and storage capacity was also in place to support commercial production.
BK11 had a 12-million ton resource, containing about 800 000 ct.
Firestone was planning to use the new mining operation at BK11 as a centre for satellite mining operations in the Orapa area, in Botswana, and would “exploit” multiple kimberlites in the area, it reported in November.
It would start evaluation work on the nearby BK16 kimberlite, which it expects to have a similar potential to BK11, in 2010…read more at the Mining Weekly
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Source:resourceintelligence.net/
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