Name and Location
Liqhobong diamond project, Lesotho.

Client
Liqhobong Mining Development Company (LMDC), comprising Firestone Diamonds (75%) and the government of Lesotho (25%).

Project Description
The Liqhobong deposit has a total indicated and inferred resource of about 90.82-million tonnes, containing an estimated 29.75-million carats (down to 510 m).

An updated definitive feasibility study (DFS) on Liqhobong has confirmed the robust economics of the project. The updated study is an internal review of the study completed in October 2012. It is based on additional work associated with Firestone’s ongoing project finance process and it incorporates the benefit of the company's recently announced updated diamond price assumptions, revalidated operating and capital cost assumptions and updated foreign exchange rates.

The study shows that the project could recover 1.15-million carats a year at an in situ grade of about 32 carats per hundred tonnes and an average stripping ratio of 2.28.

The main treatment plant (MTP) has been designed to treat 500 t/h of ore, which equates to 3.6-million tonnes a year, and comprises purpose-built crushing, scrubbing, screening and recovery technology. Mining and processing will be contractor operated.

Value
The updated DFS includes a revalidation of the total project capital scope and cost requirement. Total initial capital costs are estimated at $185.4-million. The project capital has increased from $167-million to $185.4-million – an increase of 11% when compared with the October 2012 DFS.

The revised and revalidated initial capital cost estimate includes an additional $5-million for the provision of grid power to the project, with the project carrying the full cost of power infrastructure. Previously, this had been modelled on the basis of shared infrastructure with other neighbouring mines.  In addition to the increased power cost, the owner's team costs and contingency allowances have also increased.

Duration
According to the updated DFS, construction and early works for the MTP are expected in early 2014, when funding for the project is finalised.
Thereafter, the project is planned to take two years to construct and commission, with full production scheduled to begin in early 2016.
The power component of the project is expected to take 13 months to complete, with grid power expected to be in place by July 2015.

Latest Developments
Firestone has finalised the principle terms of a further $140-million funding package to build and commission the MTP at the Liqhobong mine.
The funding package, which comprises bridge and mezzanine facilities, equity subscriptions by Pacific Road Resource Funds and Resource Capital Funds, as well as a brokered equity placing will, together with the $82.4-million Absa debt facility secured in November 2013, complete the $222.4-million funding required to bring the MTP into production.

Key Contracts and Suppliers
DRA Projects (DFS).

On Budget and on Time?
None stated.

Contact Details for Project Information
Firestone Diamonds, tel +44 20 8741 7810, fax +44 20 8748 3261 or email info@firestonediamonds.com.