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,

That would be nice!

FDI, an oasis of blue in a sea of red.

Indeed - I took an absolute hammering today :-(

queen1,

FDI started where it left off yesterday, and the holding in AFD is now worth nearly 8 million!

With the 10 million in cash FDI recently raised, the AFD holding, and continuing production at three mines, FDI look to be in a healthy position financially speaking.

Queen1,

There is a broker buy note out, from Hargreave Hale.

Splendid Andy. Cash & recomendations. 190p+ here we come!!

queen1,

Well according to Hargreave Hale, 185p for starters!

queen1

One snippet from the HH report.

"We believe the value we have placed on the company is conservative."

They forecast revenue for 2006/7 of 8.1m, net earnings of 1.8m, eps of 3p, for 2007/8 the figures are 25.1m, 9m, and 16p respectively.

They have used a price of $350 per carat for the Groen river which is understood to be conservative.

I'm in agreement with that Andy. It may be a little blinkered but I can't see too many things stopping FDI from marching off away into the sunset trailing a soaring sp in its wake. Am I missing anything obvious?

queen1,

I certainly hope not!

I believe the interims are due next week, and if so I trust FDI will take the opportunity to update us on developments since the December 2005 finals.

Andy,

Yes, interims scheduled 31 Mar and would expect some report on Groen river evaluation then. SP seems to show remarkably little anticipation so far. Crossing everything for a big +!!!!

RAy A,

Hello again, good to see you are still here!

Yes I beleive they will update us on the company's various operations with the interims, but anything major such as Groen River news would have to be RNS'd at the time, so would be a seperate announcement.

Clearly Groen River's potential is a company maker on it's own, but until that news is released, I want to see FDI moving towards increasing revenues, and I'll be particularly looking for news of the Oena contractor being appointed, and estimations of production there for the remainder of this year.

They are looking to appoint a contractor "with substance" to upgrade the processing plant in order to greatly enhance production, which will clearly take time, so I would like to hear that this is well in hand, and maybe that a decision has been made on the contractor and they have been appointed.

Otherwise, I expect flat interims, with maybe the hope that Bonte Koe has increased production since the finals, but nothing more.

FDI is well positioned financially, as they have around 10 million in cash, are producing and making a profit, and own nearly 4.8 million AFD shares at a value of 1.60p each!

Financially at least, FDI is in a very strong position for an exploration company, and I hope they may take advantage of the sort of opportunity that may become available to them because they are in a position to make a decision and move quickly.

I am looking forward to seeing what is released.

ray a, queen1,

Well a nice rise the last couple of days, maybe some news is coming in addition to the interims?

Maybe Andy. A new high for the last year hit today although still a little way to go to the heady days of 195p when you and I were wondering whether the sky would be the limit!

queen1,

Looks like I spoke too soon!.

We are back down a little today, on light volume so far.

Interims are either tomorrow or Friday, and my guess would be Friday.

We are due updates on some of the following; Groen River, Oena contractor appointment progress, Bonte Koe grades, marine gravel project, Botswanan drilling, Daly City Ventures, Hoendiklip Bay / Avontuur mine refurbishment, and maybe even something from the USA exploration.

Last year's interim statement was quite lengthy as it dealt with project progress, and I expect this year's to be lengthy too.

FDI interims are out.

They can be viewed HERE


Highlight is a new deal with De Beers to process their Buffels River alluvials at FDI's Bonte Koe mine.

Disappointing that the AK21,22 and 23 did not produce better results in Botswana, but the continued sampling on other kimberlites gives hope, and the use of the De Beers' Zeppelin over FDI's Jawaneng licence in mid 2006 is a real boost!

Prouction reduced due to refurbishment at Hoendiklip Bay resulted in a small operating loss, but the exanded production due to start there, and at Bonte Koe, in the near future, should result in much higher production, and a return to profit, during 2006.

Groen River results predicted at the end of May, so we probably won't hear until the middle of June I would imagine, most miners have some slippage.

A mixed bag overall, IMO, and I would like to see some clarification of the revenue FDI are likely to receive from the Buffels River project with De Beers.

Well the SP has been pretty disappointing since the interims, lack of anything new to report, I suppose.

The underlying market for diamonds, is however as strong as ever, per the article below from Resource Investor today ...................

Diamonds: An Investor's Best Friend?

By Jackie Steinitz
11 Apr 2006 at 08:40 AM EDT


LONDON (ResouceInvestor.com) -- Share prices of the larger diamond juniors (those with a market capitalisation greater than $50 million) have risen by 34% over the last year.

Leaders of the pack include African Diamonds [AIM:AFD], up 161% following promising results from the AK6 discovery in Botswana in its joint venture with De Beers, and Blina Diamonds [ASX:BDI], which has reported high alluvial grades from its exploration projects in the West Kimberley Field in Australia. Dianor [TSXv:DOR] jumped 300% in the two months to February following an exploration report from its Leadbetter project in Ontario and a buy recommendation by Westwind Partners.



The primary driver of the rising share prices is that a fundamental shift in the supply-demand balance for diamonds is imminent. After 25 years of supply surplus the diamond industry is on the cusp of moving into an era of supply deficit, in which pricing power will shift to the miners and explorers.



Demand

On the demand side, growth has been accelerating. The sales performance through much of the 1990s was disappointing; between 1992 and 1998 diamond jewellery sales grew by just 1% per annum.

However a new chapter in demand growth began in 1999/2000 when industry giant De Beers undertook a major strategic review of the business that identified the opportunity gap the chasm between the sluggish sales growth of diamond jewellery (where marketing investment by the industry represented just 1%-2% of sales) and the booming sales growth of luxury goods (where the marketing to sales ratio was 10%). De Beers therefore embarked on a new strategy to transform the marketing landscape, to increase marketing investment and branding throughout the industry and to convert the industry from one that was demand-driven rather than supply-led.

Growth was kick-started by the millennium opportunity. The buoyant global economy and a campaign which featured captions such as What are you waiting for? The year 3000?, and Every Thousand Years or so its nice to get her something really special for her birthday, spurred demand growth to 11% in 1999 and 8% in 2000.

Since then new concepts such as three-stone jewellery to celebrate a couples past, present, future have proved the most successful product since the diamond engagement ring; sales in the U.S. rose from $500 million to $3 billion in just four years.

The latest U.S. campaign, I forever do aims to tap into the 150,000 wedding anniversaries celebrated there every day of the year. The strategy has also been able to ride the wave of economic growth and expansion of the middle classes in India and China.

India is now the third largest market for diamond jewellery in the world; sales have more than trebled in the last 10 years. In China sales have increased six-fold since 1990 and in Shanghai now around 85% of brides receive a diamond wedding ring, up from 3% 15 years ago.

Worldwide demand growth has averaged 6% per annum since 1998 and De Beers are anticipating a figure of 7% this year. There is significant potential for future growth especially in China, India and the Middle East. Consider, for example, that even in Shanghai, the most mature of the Chinese markets: fewer than one in five women own diamond jewellery compared with four in five in the U.S.

Supply

On the supply side growth in production, like demand, has also been accelerating since the millennium after a relatively flat period in the 1990s. Growth since 2000 has averaged 5%-6% per annum in volume.

However and this is the nub - for the last 10 years, new production has not been sufficient to meet demand. Demand has been met only by massive destocking by the producers, firstly by the Russians, and latterly by De Beers who have destocked from a peak of almost $5 billion in 1998 to working levels today. De Beers have also achieved further one-off gains by shortening the pipeline which has reduced the amount of time taken to get from mine to consumer and thus reduced the level of working stock.

The diamond majors (De Beers, Rio Tinto [TSX:RTP; LSE:RIO], BHP [NYSE:BHP; LSE:BLT] and the Russian company Alrosa) have already invested extensively to optimise production and diamond recovery at all mines. This, together with two new Canadian mines explains the acceleration in production growth since the millennium. But now most of the possible gains have been achieved.

Rio last year agreed to invest $910 million to take its Argyle mine underground from 2008 to 2018 even though production underground is expected to average just 60% of the previous open-pit average of 34 million carats per year.

Meanwhile diamond exploration has been booming; global spending last year exceeded $620 million, the highest level recorded in the 17 years it has been measured by the Metals Economics Group, with more than 500 projects on five continents. But it takes 8-10 years from discovery to bring a mine on stream.

While there are a few new medium-size mines on the horizon such as De Beers Snap Lake project in Canada, which will come on stream in 2008 and Victor mine in 2009, they will only just compensate for declines anticipated in some of the current mines. The bottom line, according to forecasts produced by WWW International Diamond Consultants, is that production, which totalled 158 million carats in 2005 will stay in the range of 155-165 million carats for the next nine years.

For the moment the diamond pipeline is still digesting the final vestiges of surplus stock in the diamond cutting centres. But the combination of encouraging demand prospects, tight supply and rising prices means that the medium and long-term future should be bright; for the miners, for explorers who find diamonds and for the investors who finance the exploration and production.

hobbst,

Thanks for posting that, very interesting, a decent writeup of the current state of the industry.

An interesting article HERE regarding the diamond industry and the various miners.

hobbst,

Why couldn't this have been found on FDI land?



THE workers who gathered around the high-security screen at the Schmidtsdrift diamond mine in South Africa could hardly believe what they saw. Sticking out of a sifting table coated in beeswax was a rough diamond three-quarters the size of a cricket ball.

The 235-carat diamond, one of the worlds rarest, was found on Wednesday night just weeks after operations resumed at the mine in the Northern Cape. Nare Diamonds, a small company, is the first to mine the site since a previous owner went bankrupt three years ago. The find is also a boon for Lonrho Africa, which acquired a 17 per cent stake in Nare just one week previously.

--------------------------------------

I saw a presentation by Nare a couple of months ago, and unlike some of the others there, liked what I saw and heard, but sadly did not take the opportunity to buy.

One can only imagine the value of that diamond!

Andy,

Yup, spotted this today - what a beauty !! Reckon its about time that Messrs Kenny & Co got some serious excavation going to find one the size of a football !!

Joking apart, we could do with some positive news to get the share price moving again, but I still remain confident that Firestone will be a star performer.

hobbsts,

Well I hope you're right!

I see that Firestone are mentioned in a feature on the diamond industry in this week's Investors Chronicle, pages 19 to 22.

Phil Kenny is quoted several times, and the article is upbeat towards the AIM junior diamond miners.