DIAMOND MINE
Firestone under strain as gem prices fall short
Liqhobong mine is producing diamonds realising well below what Firestone planned
Former financial head of De Beer, Stuart Brown is drawing down on all his skills as CE of London-listed Firestone Diamonds, which is realising prices far below plan at its new R2.1bn Liqhobong mine in Lesotho, putting the company under financial strain. Fresh from agreeing to a delay in the implementation of debt-facility covenants regarding an $82.4m facility with Absa, Firestone, which is traded on London’s Alternative Investments Market, said on Friday it needed extra money and had to restructure its debt obligations. The Liqhobong mine is producing diamonds realising well below what Firestone planned in setting up the mine and securing finance for it, causing financial stress and forcing a change to the plan to source higher-value diamonds. Liqhobong diamonds have realised an average of just $69 per carat compared with expectations of $107 per carat that was mapped out in the bankable feasibility study. The new mine plan will be based on a fresh forecast price per carat, which w...
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