Firestone Diamonds plc is a UK-based international diamond mining and exploration company with operations in the Namaqualand region of South Africa and Botswana. Namaqualand, which is located on the west coast of South Africa, has been one of the world's largest alluvial diamond producing regions for the past 60 years, with total production to date estimated to be worth more than $3 billion. Botswana is the world's largest producer of diamonds by value, with annual production of over 20 million carats worth over $1.6 billion.

Firestones strategy has been to build a portfolio comprising advanced development and production projects to provide sustainable cash flow to fund ongoing exploration programmes and to provide an early return on investment, together with large scale exploration projects which have the potential to yield significant reserves of gem quality diamonds.

The company operates the Avontuur Mine and the Oena Mine of Namaqualand, which produces high quality alluvial diamonds, and has a growing portfolio of advanced and early stage exploration projects in known diamond producing areas in Namaqualand and Botswana.



Since 1996 the company has increased reserves and resources more than thirty two times from 34,000 carats to over 1.1 million carats at present, with an estimated gross value of approximately 260 million. Firestone is debt free and well funded and has a highly qualified management team with extensive experience in the financing and development of diamond and other natural resource projects. Firestone is quoted on the Alternative Investment Market (AIM) of the London Stock Exchange and trades under the symbol FDI.L.

Firestone also has an exploration project in the USA.



Main Mining Pit, Avontuur Mine, Namaqualand, South Africa.






For FDI Corporate information : http://www.firestonediamonds.com/frcorporate.htm

For FDI homepage : http://www.firestonediamonds.com/index.htm

Firestone Dimaonds shares in issue: 65m 20p Ords

Firestone Diamonds PLC - Major Shareholders

Major Shareholders ---- Amount --- % Holding
Elfin Trust Company Ltd 7,200,000 16.68
Aurora Investment Trust 7,200,000 16.68
Gartmore Investment Mgt 5,418,116 12.56

queen1,

yes I agree, I would have thought the price would have jumped much more than that to be honest.

It's a shame they couldn't have announced when they had the run up to 160p recently, as the momentum would have carried them higher IMO.

I do think that once the analysts have checked the numbers, they may add a few more pence at least.

I was at Minesite today, and the attendees that hold FDI, (and there are quite a few!), were excited about the news, and as mystified as me as to why the price didn't go higher.

I believe FDI are presenting in the city next week, so we may see a rise after that.

queen1,

Well FDI has just turned positive, albeit only by 0.5p!

I had hoped for a follow through from yesterday's excellent news, but it seems the PR is lacking.

I think FDI need to consider changing their PR company, this news should have raised the price considerably more IMO.

Surely it shouldn't be the PR company that is responsible for whether an sp rises or not! It is more likely the perception in the Market.

Takahe,

Correct, but it's the PR company's job to ensure the market is aware of the news, and I don't feel this has really occurred since the two RNS in July, and what was, IMHO, excellent news yesterday, seems to have been largely missed by the city.

In hindsight, the RNS issued in July came out when the city was on holiday, and lessened the impact of what was some excellent news IMO. they had to announce of course, because it was price sensitive, but sadly at the wrong time of year to maximise the impact.

I wonder if any newspaper is carrying the news today?

The volume today is a pitiful 50,000 so far.

The market seems a bit quiet, generally...

Word is out, this will climb from here 200% with the odd day or two to allow for profit taking.

driftwood1 - not sure what you're smoking but if they do climb 200% I'll have a puff!

Andy - I've been out all day and was disappointed to come back to find such a small rise. However, most of my portfolio saw red today so any blue is a bonus!

driftwood,

In the longer term, that is certainly possible, IMO.



Queen1,


Yes today was a poor day for the market, and yet we rose, so mustn't complain I guess.

FDI have now put numbers out, it's now a question of waiting until the city analysts digest them!

let's hope we don't have to wait too long!

I find it difficult to formulate an opinion to the true worth of Firestone with all the ifs, buts and maybes that exist, but even to a novice the current market cap of just over 70m takes very little account of the potential (and highly probable) earnings capacity of this company. Perhaps if Messrs Kenny and Co allowed a bit more liquidity in this stock by placing some of their substantial holdings, the City may feel a bit more comfortable in investing in a more fluid stock.

Whilst I would also like a smoke on driftwoods pipe, I cant believe that Firestone will be ignored for too much longer and we can all enjoy a rollercoaster ride.

hobbst,

I agree, the market cap does not take account of the potential here, particularly after the numbers that were released in the latest RNS.

If the Groen comes in, FDI have a 39% holding (31% if De Beers finance it) of up to their conservatively assessed $4.5 billion, spread over the number of years of mine life.

IMHO that has to be worth more than a market cap of 75 million by itself, and we still have exisiting Namaqualand production, and Botswana and American exploration to go!

liquidity?

Yes that may be a problem, around 80% of the shares are tightly held by directors and long term holders I believe, but if I was Phil kenny, I would NOT release any at this price, with the potential we have both identified, would you?

PR?

The PR company could do a whole lot better IMO, let's see if they do now they have some real numbers for the city to chew on.

Andy,

I take your point on liquidity, but I suspect that in order for a more realsitic market valuation of the company to be achieved, investors may be deterred by the lack of influence they can muster on what is in effect a 'closed company'. I have no doubt that the directors have had this discussion with their advisors on numerous occasions, but I agree that with the current SP, they would be selling on the cheap. It may take a compromise to please everyone.

Hobbst,

Yes you have a valid point, one for them to discuss with their broker, which as you suggest, they probably already have.

The directors and their associated trusts hold around 33% I beliieve, and then the institutions hold around 18%, I believe, so in effect, you are correct.

The institutions could hold sway of course, so there is some degree of assurance.

Firestone Diamonds Already Counting The Benefits Of JV With De Beers At Groen River Alluvial Project

By Sally White

Lines of communication are pretty short in the mining community, which is probably why most rumours bear at least some resemblance to the truth. So it turned out with stories that Firestone Diamonds was after African Diamonds, its Botswana exploration neighbour and fellow De Beers joint venturer. What has just transpired is a share-deal in which Firestone is taking a 7.3% stake in African Diamonds. The terms give Firestone 4.88million shares in African Diamonds in return for 1.88million new Firestone shares.

Now there are new rumours. These are that Firestone would not mind having more, but that was all it could get from the fall-out from African Diamonds noisy January boardroom split. Firestones CEO Philip Kenny is only saying that he had the opportunity to buy the stock. The purchase was in continuation of our strategy of maximising the already extensive Botswana assets that we have had in place for some time. He added that it was a strategic investment, with Firestone having no plans to make an offer for the whole company.

Meanwhile, African Diamonds is not saying very much either. It has just confirmed that it has granted De Beers, rumoured competing bidder, pre-emptive rights over 17million of its shares, 25.4 per cent, plus first refusal on shares African Diamonds directors offer for sale.

Kenny is more interested in talking about what happened next, making the African Diamond deal look insignificant. This was breaking the news that thirteen deposits have been identified in one of its three De Beers partnerships its three-month old joint venture at Groen River Valley. This is a relatively unexplored ancient river system on the west coast of South Africa, its other major country of operation. Diamonds found have been of large size and high quality, similar or even better than those recovered from the Orange River.

Firestones prospecting permits cover 500 sq. kilometres in the area. Under the JV, De Beers can earn a 61 per cent interest by financing and carrying out all the exploration and evaluation work up to completion of bankable feasibility studies. De Beers also contributed minerals rights covering around 90 sq. kilometres.

Total size of the 13 deposits is being put at 360 million tonnes. As Kenny says, it is looking as though the region has the potential to become a major new alluvial diamond area producing high quality diamonds". Indicated potential gross value is put at $2.7billion n to $4.5billion. No wonder the shares, already improving post the African Diamonds stake news, immediately shot up another 15p to 153p.

Putting together the Firestone modelling work with data from De Beers past exploration in the area has brought rapid progress in assessing the area. The deposits show regional grades of two to three carats per hundred tonnes, with the potential of nine million carats. Modelled diamond values are put at a conservative US$300 to US$500 per carat. Potential as shown by geophysical data and probe drilling is 500,000 carats, with a gross value of US$150million to US$250million.

Now a systemic multi-phase programme of drilling and bulk sampling has started. If the early work goes well, then the pace will be stepped up to check the grade and value of the diamonds to a high level of confidence. Completion of this work is expected in the second half of 2006. Last word to Philip Kenny, We consider the Groen River Valley to be one of the largest and most attractive undeveloped alluvial diamond areas in the world, and we expect that the results of the next phase of work on the project will confirm its economic potential.

Aldwickk,

That's an interesting article, thanks for posting it.

It would not surprise me if FDI return to AFD and pick up another tranche of shares at some time in the future.

Very disappointed with FDI at the moment in terms of sp performance. All we've had is good news recently but it seems to make little difference. Admittedly the general markets have been poor for the last couple of weeks but today things are much improved yet FDI is down sharply again. Perplexed.

queen1,

So am I to be quite honest.

I am not aware of any bad news, and FDI are never 'leaky', so unless we have a large seller disposing of a quantity of stock, I can't fathom the drop.

I still believe in the long term value potential here, so not too worried, and, unlike the other AIM juniors, they have production, and make a profit!

One of the problems in a tightly held stock can be the MM's not being able to fill an order, and so they may be tempted to "shake the tree" in order to try and skae out some hoders.

Conversley of course, holders may hang on thinking this when it's not a "shake" at all, and lose out if the price falls further.

Oh for an open and honest system like the US have, rather than this manipulated system that we have.

petra is also seeing heavy selling - no reason for either fall that i can see

This is probably the most frustrating share in my portfolio and certainly not one for the faint hearted. As discussed before, liquidy may well be the problem, but if you believe as i do, that the true quality will be (eventually) shown in the SP then hold on tight for the rollercoaster ride.

hobbst - unfortunately I've got worse but again today the FDI sp defies the rest of the market, and falls. Surely not all of the potential for the company can already be reflected in the sp? It's way too low imho.

queen1,

I second that, quite bemused by the drop.

Since July we have had three major announcements, and we are partners with two of the major diamond producers in the world with various projects in politically stable countries, and yet the price is now lower than earlier in the year when FDI had a lot less projects to it's name!

I say appoint John Teeling to the PR Department!