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Firestone Narrows FY Loss 50% to $11M
Oct 2, 2014 8:43 AM
By Deena Taylor
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RAPAPORT... Firestone Diamonds narrowed its fiscal-year loss by 50 percent year on year to $11.2 million for the period that ended on June 30. The company explained that lower depreciation and amortization charges, totaling $3.4 million this period compared with $8.8 million one year ago, resulted in a smaller loss. Revenue rose 52 percent year on year to $9.9 million. The mining company's revenue came from the sale of 58,086 diamonds from the Liqhobong mine in Lesotho at an average price of $68 per carat.
The company noted that rough prices were in line with market demand and held steady, considering that no large or special stones were sold. Rough diamond prices experienced single-digit growth for the second half of 2013 and the first half of 2014, before leveling off. Looking ahead, the company remains cautiously optimistic and noted that global demand in rough diamonds is being driven by increasing demand in retail diamond jewelry from China and India, as well as a slow recovery in the U.S.
Diamond production at Liqhobong's pilot plant dropped 73 percent to 42,929 carats during the fiscal year. The drop in production was the result of the company closing the pilot plant during the fourth quarter of 2013 and decommissioning it in the first half of 2014 to make way for the construction of a 500-tonne-per-hour main treatment plant.
In May, the company secured a $224 million funding package required for the development of the main treatment plant at Liqhobong through to completion. Additionally, the company attained all licensing requirements and construction began at the end of June 2014.
Stuart Brown, the CEO of Firestone Diamonds, explained that 2014 was a defining year for the company, as it looks to transition from a diamond explorer to a mid-tier diamond producer. "The successful commissioning of Liqhobong in 2016 is expected to place Firestone in the top tier of diamond-producing mines globally," he said.
Liqhobong is slated to produce over 1 million carats per year once full production is achieved. The mine has a resource of 29.135 million carats at an average grade of 33 carats per hundred tonnes.
Firestone also owns the BK11 diamond mine in Botswana, which is currently under care and maintenance. The company will complete the formal disposal of the mine in the first half of 2015.
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Tags:
BK-11, Deena Taylor, diamond, diamonds, Firestone Diamonds, Lesotho, Liqhobong, stuart brown
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