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RAPAPORT... Firestone Diamonds reported Monday that it expects to generate significant cash flow from two diamond development projects in 2010. The company said that its flagship BK11 kimberlite project in Botswana could contribute up to $30 million in yearly revenue. An evaluation indicated that diamonds on the west side of the site, which contains 7 million metric tons (7.7 tons), have a value of $175 per carat. The project has a total inferred resource of 12 million metric tons (13.2 million tons) containing 830,000 carats, Firestone reported.
Phillip Kenny, Firestone’s chief executive officer (CEO), said that if the company makes a mine development decision in the third quarter of 2009, production could commence by the middle of 2010, with an initial capacity of around 1.5 million metric tons (1.7 million tons) per annum. At revenues of $20 per metric ton, BK11 could produce approximately $30 million a year and become profitable in less than 6 months, the company stated. “It is a major achievement for us to have identified significant economic potential at BK11 despite current low rough diamond prices,” Kenny said.
Kenny reported that Firestone is also making progress in contract negotiations with Debswana about the Jwaneng tailings project. “If we achieve our targets for these projects, we expect to start generating significant long-term cash flow from both projects in 2010, and the company will be well positioned to take advantage of opportunities that arise when the rough diamond market recovers,” he added.
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