Name of the Project
Liqhobong diamond project.

Location
The project is set in the hills of the Maluti mountains, in Lesotho.

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

Project Description
The Liqhobong mine development project’s 8.6 ha orebody contains a probable reserve of 11.4-million carats. It has a total indicated and inferred resource of 90-million tonnes, containing an estimated 29.6-million carats (down to 510 m) and is still open at depth.

The project envisages a potential openpit mine plan to a depth of 390 m below the surface, producing 17.6-million carats, with a life-of-mine of 15 years.

Firestone updated Liqhobong’s October 2012 definitive feasibility study (DFS) in November 2013, which reaffirmed the project’s robust economics and secured its funding.

The updated DFS envisages the construction of a new 500 t/h main treatment plant and supporting infrastructure to treat 3.6-million tonnes of ore and the recovery of more than one-million carats a year. This will place it in the top tier of diamond mines globally.

The main treatment plant comprises purpose-built crushing, scrubbing, screening and recovery technology.

The mining and processing will be contractor operated.

Jobs to be Created
The mine currently employs about 795 people.

Net Present Value/Internal Rate of Return
The updated DFS, which assumes a 3% growth in the diamond price, with all costs being kept flat, sets out a base case project-level post-tax net present value (NPV) – using $107/ct and an 8% discount rate – of about $379-million and a post-tax internal rate of return (IRR) of 30%.

An upside project-level post-tax NPV, taking into account the potential revenues from stones larger than 100 ct using $156/ct and an 8% discount rate, is estimated at about $728-million, with a post-tax IRR of 45%.

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, compared with a 2012 forecast of $167-million.

The revised and revalidated initial capital cost estimate includes an additional $5-million to provide grid power for the project, with the project carrying the full cost of power infrastructure ($15-million).  Previously, this had been modelled on the basis of shared infrastructure with other neighbouring mines. The owner's team’s costs and contingency allowances were also included.

Duration
Initial production is expected to start in late 2016.

Latest Developments
All major construction activities at the Liqhobong mine have been completed.

Mining activities have started and the commissioning of the processing plant is now in its final stages.

“The first ore from historical stockpiles has been put through the plant and the company has begun the mining of the main pit kimberlite as it begins production activities in earnest,” CEO Stuart Brown has said.

Firestone expects to complete the commissioning of the recovery plant and sort house in anticipation of first diamond recoveries later this month.

Key Contracts and Suppliers
DRA Projects (EPCM); Stefanutti Stocks (earthworks and civils); Turnkey Civils Lesotho (residue storage facility) and S.M.E.I Projects (structural, mechanicals, platework and piping).

On Budget and on Time?
The project is on track, with initial production on target to start at the end of 2016.

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