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Firestone Gets Bank Waiver After Prices Slide

Jul 2, 2019 4:37 AM   By Rapaport News
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RAPAPORT... ABSA Bank has granted Firestone Diamonds a waiver after a drop in small-diamond prices put the miner at risk of breaching its loan covenants.

The terms of Firestone’s $82.4 million loan from ABSA included assumptions about estimated future diamond values. Weakness in the small-diamond market resulted in the company’s average selling price falling to $74 per carat in the nine months ending March 31 — below its expectations. To ensure that Firestone wouldn’t breach the terms, it obtained the waiver from ABSA for two of its six covenants.

“The lower average value was impacted mainly by lower prices realized for the smaller, lower-value goods, which has also affected many other diamond-mining companies and the wider diamond industry,” Firestone said.

Image: Firestone Diamonds’ Liqhobong mine in Lesotho. (Firestone Diamonds)
Tags: ABSA, ABSA Bank, Firestone, Firestone Diamonds, Lesotho, Liqhobong, Liqhobong mine, mining, Rapaport News
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