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lse:FDI Main Discussion

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#62

#63

Interesting option, but not ideal timing for FDI with a very low share price, and a NPV lower than it should be through postponing the 3rd cut in order to restructure their bank loan a bit.

If the market prices for diamonds improve, then this shouldn’t be needed… if it doesn’t, it may make a lot of sense for mutual survival.


#64

Could be a reason for further downward pressure along with other reports I have seen re the growth of large lab grown diamonds.


#65

Also… http://www.idexonline.com/FullArticle?Id=44476


#66

It is a bit early to see how this will pan out… DeBeers joined the artificial diamond market in part to ensure a significant differentiation between cheap, manufactured diamonds & real ones worthy of sentimental value at higher cost for the historical age & craftsmanship.

If diamond prices reduce, some of the older mines may become uneconomic sooner, and may close earlier; and the business case for new mines will be weaker. Survival over next two years will be most critical for FDI.


#67

RNS Number : 6874P
Firestone Diamonds PLC
12 February 2019

12 February 2019

Firestone Diamonds plc

(“Firestone” or the “Company”)

RECOVERY OF 70 CARAT WHITE GEM DIAMOND

Firestone Diamond plc is pleased to announce the recovery of a 70 carat white, makeable diamond from its Liqhobong Mine in Lesotho. This follows after a 46 carat gem diamond that was recovered in December, sold for more than US$1 million at a recently held sale. The 70 carat diamond was recovered undamaged and will go on sale at the next tender which is scheduled to take place during March 2019.

Further details will be included in the Q3 production update.

An image of the diamond is available on the Company’s website:
https://www.firestonediamonds.com/sales-marketing/special-stones

Paul Bosma, Chief Executive Officer, commented: “The 70 carat stone was recovered in the northern, low grade part of the pit where the bulk of our mining will take place in the coming months. Although the market for the smaller stones has been under pressure, we’ve seen continued demand and good prices realised for special stones”.

For more information please visit www.firestonediamonds.com or contact:

Firestone Diamonds plc

+44 (0)20 8741 7810

Paul Bosma

Grant Ferriman

Macquarie Capital (Europe) Limited (Nomad and Broker)

+44 (0)20 3037 2000

Nick Stamp

Nicholas Harland

Tavistock (Public and Investor Relations)

+44 (0)20 7920 3150

Jos Simson

Gareth Tredway

Annabel de Morgan

About Firestone

Firestone is an international diamond mining company with operations focused in Lesotho. Firestone commenced commercial production in July 2017 at the Liqhobong Diamond Mine in Lesotho. Liqhobong is owned 75% by Firestone and 25% by the Government of Lesotho. Lesotho is emerging as one of Africa’s significant new diamond producers, hosting Gem Diamonds’ Letšeng Mine, Firestone’s Liqhobong Mine, Namakwa Diamonds’ Kao Mine and Lucapa’s Mothae Mine.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

MSCBLBDDXBBBGIX

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

MSCBRGDDDGBBGCB

To unsubscribe or to change your subscriber boptions, go to:
http://www.firestonediamonds.com/investors/new-alerts/email-alerts


#68

For those interested, the host zone/facies which FDI are only just starting to mine is K2, where they found this 70 carat stone.

K2 comprises 37.1% of Main Pipe, has a relatively low average grade of 26 cpht (at present), and decreases in volume at depth.

Hitherto, most of the large & high value stones have been found in:-

K5 - 33.1% Main Pipe, 43 cpht, enlarges at depth
K6 - 22.7% Main Pipe, 36 cpht, enlarges at depth (where >250 cts stone was recovered, broken)

The other, smaller zone is:-

K4 - 7.1% Main Pipe, 32 cpht, only found in upper levels

Finding this 70 carat, good quality white, makeable stone in K2 is particularly encouraging… it implies that the low average cpht could be because there are proportionably more larger stones yet to be found. The price gained for this stone in the March sale will be of particular interest.

We need to find more high quality stones, more often, so the next few months may equally be interesting as mining concentrates on K2 for a while. If revenues start to increase, the SP should start to recover more rapidly, world-wide economies permitting.


#69

nice gains on one stone - let’s hope we can hold onto them


#70

The nearly 70 carat gem stone will be sold this month… I would hope for well over a £1m - possibly £2m. FDI still have enough cash… so just need a few more good stones & some strengthening in the price of smaller & large diamonds as some large mines close, and FDI’s finances should start to improve.

The market price of FDI is still currently less than the cash held, so no value given to either the plant or the diamonds in the ground. Debt is manageable at present & costs are being contained well.

Topped up again today… hopefully close to the bottom, ready for an upturn.

None of the directors or major shareholders are selling, and FDI still have the opportunity to add the 3rd cut (of waste around around the kimberlite) back - which will substantially add to the volumes of diamonds which will be recovered at greater depth for no more CAPEX.


#71

HI
When do the capital repayments start and how much are they a month.

Best Clem


#72

Production is within targets, diamond prices are strengthening a bit & if they add the 3rd cut back, the Balance Sheet will see $100m added back into the value of company. Clearly a few more large gem stone finds would help a lot too.

Topped up today with 70,000 more @ 2.08p to reduce my average down to nearer 18p. High risk but still a buying opportunity whilst I feel some are bailing out and, this time of year, using the losses to offset gains elsewhere from a capital gains tax perspective.


#73

Good News - RECOVERY OF 72 CARAT YELLOW DIAMOND & TWO OTHER FINDS
Firestone Diamonds plc is pleased to announce the recovery of a 72 carat yellow, makeable diamond from its Liqhobong Mine in Lesotho, during the past weekend. The 72 carat diamond was recovered together with a 22 carat makeable white stone,followed by an 11 carat fancy light-pink stone. These diamonds will go on sale at the next tender which is scheduled to take place during May 2019.

This is the second c.70 carat stone recovered from the operation this calendar year, following the 70 carat white, makeable which was sold in the March auction at a record overall price for a Liqhobong diamond.

Further details of the sale will be included in the Q4 production update.

Paul Bosma, Chief Executive Officer, commented: “It was a good weekend for us, recovering the 72 carat diamond as well as the two smaller, high quality stones from within the northern, lower grade part ofthe pit. These recoveries will certainly assist in supporting the average value of the next sale in May.”


#74

1 July 2019

GOOD NEWS

Firestone Diamonds plc

(“Firestone” or the “Company”)

Bank and Bondholder Support for Covenant Waiver

Firestone is pleased to announce that, with the support of its Bondholders, Pacific Road Resources Fund II L.P., Pacific Road Resources Fund II and Resource Capital Fund VI L.P. (“Bondholders”), its 75% owned subsidiary LiqhobongMining Development Company (Pty) Ltd (“Liqhobong”), has received a waiver from ABSA Bank Limited (“ABSA”) for certain of its covenants measured as at 30 June 2019 in terms of the US$82.4 million Senior Secured Term Facility Agreement. The waiver is supported by the Export Credit Insurance Corporation of South Africa (“ECIC”), which has provided commercial and political risk insurance to ABSA.The next measurement date will be 30 June 2020.

Background

Mining operations at the Liqhobong Mine have performed well, as detailed in the quarterly operational updates reported for the first nine months of the current financial year. Tonnes mined and treated were in line with theCompany’s plans and operating costs remained below budget.

However, despite the recovery of several higher value diamonds at the Liqhobong Mine during the 2019 financial year, and an average value realised for the third quarter of US$80 per carat, the average value realised for thethree quarters ended 31 March 2019 remained below expectation at US$74 per carat. The lower average value was impacted mainly by lower prices realised for the smaller, lower value goods, which has also affected many other diamond mining companies and the wider diamond industry.

Certain of the ABSA covenants are forward looking and require forecast assumptions to be made. In light of the current pricing climate, lower average dollar-per-carat values have been employed by Firestone in these covenantcalculations, which has adversely affected the covenant measurement and given rise to the need for waivers in respect of two of the six covenants.

Despite these factors, the mine continued to generate positive cash flows after finance costs and the Group continues to be in a strong liquidity position with a cash balance of US$26.2 million as at 30 June 2019. The cashbalance is stated after the first capital repayment to ABSA of US$1.9 million, following an 18 month capital grace period which came to an end on 30 June 2019.

Waiver condition

As a condition to ABSA’s covenant waiver, the Company has obtained an undertaking from the Bondholders to waive the requirement for the Company to pay quarterly interest in cash or in shares on the Series A Eurobonds for the12 month period from 1 July 2019 to 30 June 2020, subject to an agreement on alternative arrangements being reached with the Bondholders.

Previously the Company has issued ordinary shares to pay quarterly interest amounts due. However, due to consequences of the UK takeover Code, in the absence of shareholder approval to permit the Bondholders to receive ordinaryshares thereby increasing their shareholding to above 30% without triggering a mandatory offer to minorities, the Company would be unable to issue further ordinary shares at the next interest due date, being 30 September 2019.

The Company has undertaken to work collaboratively with the Bondholders and other stakeholders including minority shareholders to agree a means through which the Company can continue to fulfil its obligations to service intereston the Eurobonds and satisfy the requirements of all its lenders.

Paul Bosma, Chief Executive Officer, commented:
“We are grateful for the strong support we have received from ABSA, the ECIC and our Bondholders in what is a tough period for the smaller stone segment of the diamond market. Operations continue to perform well, and we aimto ensure that we remain in a strong position to benefit from an improvement in the pricing environment in the future.”


#75

Several pairs of very large trades today… look like bed & ISA or bed & SIPP to me ahead of sales of those two pink & large yellow diamonds in September & Argyle Mine closure in the next year which will reduce small diamond volumes in the market, and hopefully improve prices a bit.


#76

For weeks now, every day until today, around 500,000 FDI shares have been put on the market for sale. Although this tends to have driven the SP down for a while, it is an alternate means to pay cash instead of shares to the two Major Bond Holders for the interest due. I topped up again a few times, awaiting this month’s diamond sales given there are some good gems & a backlog of unsold diamonds due to auction dates.

If revenues improve after the Argyle mine closes next year, post Brexit transition too, and FDI can reinstate the 3rd waste cut to mine deeper, the company value should recover substantially.

There is still risk on diamond recovery & quality but the better zones increase in volume as FDI go down the kimberlite, and they are still near the top at present.


#77

your thoughts on todays news?

Best Clem


#78

Have to wait and see… power from South Africa is flaky but the supply companies will have provided some service guarantees so will have to work on the problems urgently. Voltage fluctuations normally cause protection devices to trip out.

Things will pick up with even a small rise in rough diamond prices once the Argyle mine closes next year and, I hope, once Brexit is behind us… I’m certainly not selling or trading except for minor top ups to average down.

I expect another RNS later this week, once the service is stabilised… I hope.

Moneywise, the Debt/Shareholders are still supporting the FDI management and working to get through the recession on diamonds as an asset.


#79

my timing is terrible, i averaged down last week at double this price! The risk seems to be the company being taken into private hands before diamond prices improve (if they do)


#80

I averaged down a bit more today, but my average is still above 10p… nevertheless, I’ve now got 100% more shares than a year ago whilst the major shareholders have added 10% going from 31% to 34% each - and must now have a higher average than mine.

Keeping a close watch now, especially give the power problems at present - although this won’t stop the tipper trucks and waste clearance/ore stockpiling.


#81

Average is 3p now! My highest purchase was as much as 50p. Getting back to 50p would be most welcome! (I’d be over the moon to see 3p again to be honest) I feel like it is possible but I’m not ruling out 0p either