Lesotho – Construction at AIM-listed diamond company Firestone DiamondsLiqhobong diamond mine, in the Maluti mountains of Lesotho, is 49% complete and on track for initial production in the fourth quarter of 2016.

A separate project at Liqhobong, which entails the provision of electrical infrastructure to connect the mine to grid power, has also been completed significantly ahead of schedule and within budget.

The company said in a statement on Tuesday that the project has maintained its zero lost time injury record, with over 1.3 million man hours worked to date.

Firestone has also been able to increase the life of mine US$ per carat by 13% from an escalated average of $146/ct to $165/ct.

As part of a new mine plan that has been completed, strong project economics have been reconfirmed and include an increased post financing NPV at an 8% discount rate of $389 million compared with the previous base case pre-financing NPV at an 8% discount rate of $379 million.

The new mine plan has also lead to improved project IRR of 42% versus previous base case pre-financing IRR of 30% and improved payback period of 4.1 years, compared with previous 4.6 years.

The project’s capital budget to commencement of production of R2.1 billion, including optimisation projects and reclassification of expenditure from operating expenses to capital, also remains within the original US$185.4 million budget.

“The progress at our Liqhobong diamond mine reflects the ability and hard work of our team and contractors during the past 15 months and gives us confidence that we will achieve our vision of becoming a mid-tier diamond producer,” says Firestone Diamonds CEO Stuart Brown.

“The new mine plan and project economics has been a culmination of over a year’s work and importantly, further de-risks and enhances the project’s economics following on from the 2013 definitive feasibility study.”

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