FDI are managing well in difficult circumstances… diamond supply globally is going to reduce until rough prices improve.
RNS Number : 5613X
Firestone Diamonds PLC
20 December 2019
20 December 2019
Firestone Diamonds plc
(“Firestone”, the “Group” or the “Company”)
Final results for the year ended 30 June 2019
Firestone Diamonds (AIM: FDI), a diamond producer with operations focused in Lesotho, announces its final audited results for the year ended 30 June 2019.
A disappointing year for the Company despite a solid operational performance, which saw revenues decline due to a weak diamond market and a reduction in carats sold.
Liqhobong Diamond Mine (“Liqhobong”, the “Project” or the “Mine”)
· Lost Time Injury Frequency Rate of 0.23 compares favourably to the Group’s peers;
· Strong operational performance:
o 21% increase in total tonnes mined to 8.1 million tonnes (“mt”) (2018: 6.7 mt);
o Marginally lower ore tonnes treated of 3.7 mt (2018: 3.8 mt);
o 53% increase in waste tonnes mined to 4.4 mt (2018: 2.9 mt);
o Higher grade of 22.6 carats per hundred tonnes (“cpht”) (2018: 22.0 cpht);
o Lower operating cost per tonne treated of US$11.48 (2018: US$11.62);
o 829 458 carats recovered (2018: 835 832 carats); and
o 774 830 carats sold (2018: 831 637 carats).
· Largest diamond recovered to date in October 2018 was a 311 carat near-gem diamond; and
· Most valuable diamond sold to date in March 2019 was a white makeable diamond which realised US$1.6 million.
· Lower revenue of US$57.2 million (2018: US$62.2 million);
· Lower average diamond value per carat realised of US$73 (2018: US$75);
· Loss of US$56.9 million (2018: US$14.2 million), which includes an impairment charge of US$41.6 million and a deferred tax charge of US$6.3 million;
· Higher adjusted EBITDA1 of US$11.7 million (2018: US$7.7 million);
· Cash balance of US$26.3 million (2018: US$18.4 million);
o US$17.5 million unrestricted (2018:US$9.7 million unrestricted); and
· Loss per share of 8.2 US cents (2018: 2.8 US cents).
1 The measure of operational cash performance calculated as earnings before interest, tax, depreciation, amortisation and non-cash share-based payments expense.
· Power supply issue:
o Power disruption from 1 October due to 'Muela Hydro-Power Station shutdown;
o Operations resumed from 26 October using diesel generated power;
o The disruption caused by the electricity supply issue has exacerbated a difficult outlook for the Company, resulting in an inability to meet the scheduled debt repayments in the near term;
· December ABSA capital repayment of US$2.0 million deferred;
· ABSA signed non-binding term sheet received for deferral of capital repayments for a 15-month period to 31 March 2021; and
· Non-binding term sheets received from the bondholders to provide a US$6.0 million working capital facility until 31 March 2021.
Paul Bosma, Chief Executive Officer, commented:
"The year’s performance was solid from an operational perspective, as we delivered results within our guidance range for all items within our control. From a diamond pricing perspective, it was a tough year, particularly for the smaller, lower value goods and these conditions are expected to persist for the foreseeable future until the end of 2020 when global rough supply is expected to reduce.
Due to the expectations of a continued subdued pricing environment, combined with the recent power disruption to operations, the Company has continued to engage with its debtholders and has made good progress to ensure it can sustain operations through the current downturn. More information in this regard is contained in this announcement as well as the Annual Report."