New Le­sotho di­a­mond mine could be a gem

Lesotho Times - - Business -

A NEW di­a­mond mine will come into pro­duc­tion in Le­sotho be­fore the end of 2016, with ex­pec­ta­tions it too may de­liver ex­cep­tional gems like its neigh­bour Letšeng, a source of large, gem-qual­ity di­a­monds.

Fire­stone Di­a­monds, traded on Lon­don’s Al­ter­na­tive In­vest­ment Mar­ket, will add one mil­lion carats of di­a­monds to the global mar­ket ev­ery year af­ter start­ing pro­duc­tion in Oc­to­ber.

The M2.1 bil­lion Liqhobong mine is high in the Ma­luti moun­tains, and has the po­ten­tial to be­come a source of large, gem-qual­ity di­a­monds, but not as pro­lific as its neigh­bour, Letšeng.

Fire­stone CEO Stu­art Brown, the for­mer chief financial of­fi­cer at De Beers, es­ti­mated about 80 per­cent of the value re­alised from Liqhobong would come from 20 per­cent of the mine’s pro­duc­tion.

Test work showed the mine to be a source of fancy yellow di­a­monds, he said. Fire­stone ex­pects to earn an av­er­age $130 per carat from its ten­ders planned for An­twerp in early 2017.

Based on test work at a pi­lot mine that broke large di­a­monds big­ger than 100 carats each, cost­ing up to $25 mil­lion in lost rev­enue, there is an ex­pec­ta­tion the mine will yield spe­cial di­a­monds.

The $225 mil­lion raised in debt and eq­uity would buy a new processing plant that would pro­duce 3.6-mil­lion tonnes per an­num and de­liver large di­a­monds, Mr Brown said.

The Le­sotho gov­ern­ment is a 25 per­cent share­holder in Liqhobong.

The 15-year life of the mine is cal­cu­lated on an open­cast mine go­ing 393 me­tres deep. There is con­sid­er­able depth to the kim­ber­lite that has yet to be ex­plored.

Gem Di­a­monds, owner of the Letšeng mine, claims its pro­duc­tion is the high­est av­er­age dol­lar per carat kim­ber­lite mine in the world.

De Beers, the world’s largest pro­ducer by value, does not gen­er­ally tell the mar­ket about its large or ex­cep­tional di­a­mond pro­duc­tion.

The Cul­li­nan mine near Pre­to­ria, once owned by De Beers and now by Pe­tra Di­a­monds, was the source of a quar­ter of the world’s large di­a­monds, Brown said.

Fire­stone has a mar­ket cap­i­tal­i­sa­tion of $140m, less than half of its net cur­rent value of $379m. — Bdlive

Liqhobong Di­a­mond Mine is Fire­stone’s prin­ci­pal as­set.

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