Fire­stone flags de­lay to Liqhobong mine

Lesotho Times - - Business -

FIRE­STONE Di­a­monds has warned that the sched­ule at its Liqhobong diamond mine has slipped back from the end of the first half of next year to the fourth quar­ter of 2016.

The United King­dom-based com­pany owns 75 per­cent of the mine while the re­main­ing shares be­long to the Le­sotho gov­ern­ment. Ad­verse weather con­di­tions and the need to shift more earth than had pre­vi­ously been an­tic­i­pated have added about M156-mil­lion to costs.

“De­spite ad­verse weather, in­creased over­bur­den and the larger rocks en­coun­tered at site, the pro­ject con­tin­ues to make good progress,” said CEO Stu­art Brown.

He noted that the costs of ad­di­tional work crews and the ac­cel­er­a­tion of cer­tain key ar­eas adopted to meet the re­vised sched­ule through to pro­duc­tion were “all catered for” within the pro­ject’s orig­i­nal $185.4-mil­lion bud­get.

“We will con­tinue to work to find other ways to ac­cel­er­ate work streams and im­prove on the re­vised com­ple­tion sched­ule and will keep share­hold­ers up­dated as we achieve these mile­stones,” he added.

De­spite the in­creased earth­works, the com­pany was con­fi­dent that it could make up lost time through re­me­dial ac­tion. It had been work­ing on reschedul­ing ad­di­tional earth­works.

“A num­ber of ini­tia­tives have been im­ple­mented to re­duce any re­sult­ing de­lay to the over­all pro­gramme, in­clud­ing the in­tro­duc­tion of an ad­di­tional shift, ad­di­tional work crews and re­de­ploy­ment of con­trac­tors to ar­eas that are on the crit­i­cal path from ar­eas which are ahead of sched­ule,” Fire­stone said in a state­ment.

Fur­ther, the com­pany sought to de­lay the de­liv­ery of con­structed steel and de­lay other work streams to al­low the earth­works to catch up, while, at the same time, re­duc­ing the cash draw­down re­quire­ments and as­so­ci­ated fi­nanc­ing charges.

By end-may, Fire­stone had spent M830-mil­lion on the pro­ject. Mean­while, Fire­stone signed an agree­ment with Storm Moun­tain Di­a­monds, the owner of the Kao mine, in Le­sotho, to use the power line along­side Fire­stone and to con­trib­ute M94.5-mil­lion of the re­vised pro­ject costs to con- nect the mines to the na­tional elec­tric­ity grid.

The grid power pro­ject was pro­gress­ing ahead of sched­ule and was within bud­get, with con­nec­tion to the grid ex­pected in the third quar­ter. The com­pany es­ti­mated that it had made net sav­ings of M70.5-mil­lion.

“This is an im­por­tant mile­stone for the com­pany, as it will al­low Liqhobong to use grid power on site dur­ing con­struc­tion ear­lier than planned, thus re­duc­ing the diesel gen­er­at­ing costs and re­al­is­ing a small sav­ing,” it noted.

–– Staff Writer

Liqhobong Diamond Mine is Fire­stone’s prin­ci­pal as­set.

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