Firestone Diamonds Live Discussion

HPC_Follower 12 Feb 2019

lse:FDI Main Discussion RNS Number : 6874P Firestone Diamonds PLC 12 February 2019 12 February 2019 Firestone Diamonds plc (“Firestone” or the “Company”) RECOVERY OF 70 CARAT WHITE GEM DIAMOND Firestone Diamond plc is pleased to announce the recovery of a 70 carat white, makeable diamond from its Liqhobong Mine in Lesotho. This follows after a 46 carat gem diamond that was recovered in December, sold for more than US$1 million at a recently held sale. The 70 carat diamond was recovered undamaged and will go on sale at the next tender which is scheduled to take place during March 2019. Further details will be included in the Q3 production update. An image of the diamond is available on the Company’s website: [link] Paul Bosma, Chief Executive Officer, commented: “The 70 carat stone was recovered in the northern, low grade part of the pit where the bulk of our mining will take place in the coming months. Although the market for the smaller stones has been under pressure, we’ve seen continued demand and good prices realised for special stones”. For more information please visit www.firestonediamonds.com or contact: Firestone Diamonds plc +44 (0)20 8741 7810 Paul Bosma Grant Ferriman Macquarie Capital (Europe) Limited (Nomad and Broker) +44 (0)20 3037 2000 Nick Stamp Nicholas Harland Tavistock (Public and Investor Relations) +44 (0)20 7920 3150 Jos Simson Gareth Tredway Annabel de Morgan About Firestone Firestone is an international diamond mining company with operations focused in Lesotho. Firestone commenced commercial production in July 2017 at the Liqhobong Diamond Mine in Lesotho. Liqhobong is owned 75% by Firestone and 25% by the Government of Lesotho. Lesotho is emerging as one of Africa’s significant new diamond producers, hosting Gem Diamonds’ LetÅ¡eng Mine, Firestone’s Liqhobong Mine, Namakwa Diamonds’ Kao Mine and Lucapa’s Mothae Mine. This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com. END MSCBLBDDXBBBGIX This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com. END MSCBRGDDDGBBGCB To unsubscribe or to change your subscriber boptions, go to: [link]

HPC_Follower 19 Jan 2019

lse:FDI Main Discussion It is a bit early to see how this will pan out… DeBeers joined the artificial diamond market in part to ensure a significant differentiation between cheap, manufactured diamonds & real ones worthy of sentimental value at higher cost for the historical age & craftsmanship. If diamond prices reduce, some of the older mines may become uneconomic sooner, and may close earlier; and the business case for new mines will be weaker. Survival over next two years will be most critical for FDI.

davidrpenman 16 Jan 2019

lse:FDI Main Discussion Also… [link]

davidrpenman 16 Jan 2019

lse:FDI Main Discussion Could be a reason for further downward pressure along with other reports I have seen re the growth of large lab grown diamonds. Miningmx – 15 Jan 19 GEM and Lucara tipped to shine as diamond shares struggle with headwinds -... DIAMOND equities may be in for a rough ride in 2019, according to a report by Canaccord Genuity analyst, Des Kilalea, who identified a number of headwinds in 2019, including the decline of diamonds in jewellery – a threat that required a unified...

HPC_Follower 18 Dec 2018

lse:FDI Main Discussion Interesting option, but not ideal timing for FDI with a very low share price, and a NPV lower than it should be through postponing the 3rd cut in order to restructure their bank loan a bit. If the market prices for diamonds improve, then this shouldn’t be needed… if it doesn’t, it may make a lot of sense for mutual survival.

davidrpenman 15 Dec 2018

lse:FDI Main Discussion Forbes Low Prices Trigger A Four-Way Merger Proposal For African Diamond Miners Falling prices for low-grade diamonds has triggered a four-way merger proposal for African diamond-mining companies

HPC_Follower 14 Dec 2018

46 carat white found! Yes, a few good quality gem stones above 100 carats every quarter would be great, but this news should reverse the downward trend of the FDI share price and it is encouraging that larger, better quality stones are now being found and, more importantly at present, the price of the smaller diamonds (80% of FDI’s totals) is starting to recover as well. Diamond production globally is still forecast to reduce over the next few years - if not indefinitely - and this should also help FDI.

davidrpenman 14 Dec 2018

46 carat white found! Think it was something to stabilise the SP more than anything, could do with 100 carat plus find really for takeoff

davidrpenman 14 Dec 2018

lse:FDI Main Discussion Yes good news on 2 counts with the smaller stone price having improved of late. Should at least stabilise the SP

hubenstein 14 Dec 2018

46 carat white found! I was wondering why we were seeing a rise today! Amazing what one find can do

HPC_Follower 14 Dec 2018

lse:FDI Main Discussion Good news today… both very timely to better ensure that revenues will be sufficient to pay of the debt; and increase the likelihood that the 3rd cut will be re-instated & increase the reserve levels back to where they were. RECOVERY OF 46 CARAT WHITE GEM DIAMOND Firestone Diamond plc is pleased to announce the recovery of a 46 carat white, makeable diamond from its Liqhobong Mine in Lesotho. The stone was recovered undamaged and will go on sale at the next tender which is scheduled to take place at the end of January 2019. The company is also pleased to report a stabilisation in pricing for the smaller, lower value stones (-3 grainers) at the recent sale which was concluded on 7 December and which confirms the trend reported by other producers. Further details will be included in the Q2 production update. An image of the diamond is available on the Company’s website: [link] Paul Bosma, Chief Executive Officer, commented: “The recovery of the white 46 carat stone is good news as we start mining across the pit towards the northern side of the orebody over the coming months. We are also pleased by the fact that the prices of our smaller, lower value goods have stabilised and we look forward to further improvement as we head into the new year on the back of an expected positive diamond jewellery retail season”.

davidrpenman 29 Nov 2018

lse:FDI Main Discussion FDI and our CEO Paul Bosma were at Mines and Money in London this week on a diamond mining panel. Along side him were ex CEO Stuart Brown and Gem Diamonds Glenn Turner, interesting…checkout the FDI tweet below Check out @FDIplc’s Tweet: [link]

chiromawa54 29 Nov 2018

lse:FDI Main Discussion Thanks for your detailed insight HPC, like you say we need to find more large diamonds which will change every thing, if they go it alone, or find a partner. Still reason to be positive, Though the miserable share price does not reflect this, I will hold my shares .its tempting to buy more at this price.

davidrpenman 28 Nov 2018

lse:FDI Main Discussion Many thanks for taking the time to compile that report HPC, a well written and detailed review of the topics discussed. Will continue to hold and hope.

HPC_Follower 28 Nov 2018

lse:FDI Main Discussion Just a few shareholders… all resolutions passed, the latter few with some votes against due to uncertainty on how much might be spent, and on what. Production & carat recoveries are still in line with the revised plan, costs down a bit but revenue on the border line for breaking even after paying interest due & keeping revenue to pare down the debt… ABSA capital repayments re-starting middle of 2019. Real problem at the moment, in the absence of finding some big, good quality gem stones, is that 80% of the carats found are Run of Mine (ROM), diamonds under 3 grams, which are largely sold into the Indian market for finishing & cheaper end of jewellery. The Rupee is weak right now & this is reducing purchases; plus two new mines apart from FDI have entered the market adding c. 7.5m carats each year. On the plus side, other new entrants are negligible in foreseeable future & Rio Tinto’s Argyle mine is to close in 2020, which will reduce the carats produced by 10 to 15 million per year. Indeed, the FDI Annual Report shows a steepening shortage thereafter… The market for Lab Grown diamonds (typically clear) is splitting, especially given DeBeers action in recent months, with cheaper lab grown diamonds moving towards fashion accessories, whilst diamonds hold their premium for jewellery that will have sentimental value, e.g. engagement & eternity rings… high end jewellery with coloured stones for those who are rich. Things are looking up for this Christmas period and some replenishment of rough diamond stocks is expected in H1 of FDI’s financial year. $75 per carat on average is the critical number to beat across the whole stock being sold with the present plan. Met the new CEO, Paul Bosma, who I think we can trust to do all he can operationally & cost wise. Clearly, if a few large gemstones can be unearthed, the position for FDI would change rapidly. The near-gemstone >300 carats proved that they shouldn’t break new stones up to that size at least - but that quality of stone won’t bring in more than $100,000 whilst a clear gemstone would be worth $5 to $10 million & a pink one (god willing) would be potentially worth $50 million. None of us can control if and when such stones will be found. 20% of the carats are clear & coloured gem stones of good quality, lots of yellow fancies & one good pink (3.7 carat) stone so far. The price for these is holding up well fortunately. A Finance Committee has been set up to manage the debt re-payments very closely, with frequent discussions with the bond holders (who are also the major shareholders) & the ABSA bank (which has some insurance against loan payment default & assurance against Liqhobong assets. So far, whilst FDI are hitting their production targets, it seems that they will try and see out this period of weak diamond prices given that the carat recoveries are also to target even if there is a shortage of the larger stones which have been proven to be there. The FDI diamonds are always packaged up in “like” diamond (size, colour, clarity, etc.) groups by a specialist broker, and sold by tender against sealed bids. There are typically 40-50 bidders. It is not only FDI which is being hit by the low prices for diamonds at present… the whole industry is being impacted at present, hence the Petra problems, Argyle closure soon, etc. I did ask whether they had considered merging with a cash rich company like Gem Diamonds, who have found quite a few big stones in the last year after a couple of poor years. They would not comment on this, but did say that all options were currently on the table, which I assume includes loan re-structuring, more equity releases, mergers, new loans, etc. I said that I wasn’t in favour of more equity releases whilst the share price was so low. 4p a share effectively rates FDI as just being able to survive over the next few years, yet the assets are still worth in excess of $1 billion at historically average prices per carat. The FDI board need to buy time until market conditions & diamond recoveries improve. The present (two cut) 9 year mining plan is deemed conservative as there are still some options to reduce costs & increase mining rates. Ideally, FDI will move back to the full 14 year mining plan, with the 3rd cut maximising carat recovery from above ground. This needs the average diamond price nearer $100 a carat than $75 a carat. An early move in that direction would do wonders for the FDI share price as this will enable re-instatement of the larger value of the assets and potentially reduce dilution if any extra cash is needed through equity release. The $18 million they have in cash will help smooth over any cracks in debt payments, but they really do need to see the price of ROM stones back up again asap. Post 2022, especially once debt is cleared, the cash flows in should be much better, possibly enabling dividends which will further promote share price recovery. Right now, risks are still high… I can’t recommend buying more shares until either more good quality stones are found or the price of rough diamonds materially improves. Risks are also impacted by the strength of US Dollar and the Rand in particular. I am so far down on my investment, I will HOLD and hope… Once again, the next year will be critical to FDI’s future, and to returns on investment by FDI shareholders.