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Firestone Diamonds raises £18.5M for Liqhobong exploration, debt repayment

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Firestone Diamonds raises £18.5M for Liqhobong exploration, debt repayment

Firestone Diamonds Plc said Dec. 1 that it raised £18.5 million through a placement of shares at 10 British pence each, a 49.4% discount from the opening price Nov. 30, to fund mining activities at the Liqhobong diamond mine in Lesotho and the payment of an initial US$5.2 million to lender ABSA Bank Ltd.

In November, the company reached a conditional agreement with ABSA to defer repayments for an US$82.4 million credit facility from Jan. 1, 2018, to June 30, 2019, and extended the final maturity date by 30 months to December 2023.

Meanwhile, Firestone formulated a revised mine plan that it said may deliver the best medium-term returns at low risk while potentially extending the mine life and taking advantage of higher diamond prices.

Under the revised plan, the company estimates an indicative net present value of US$114 million and US$328 million based on diamond prices of US$75/carat and US$120/carat, respectively.

Average annual production will be reduced to 900,000 carats per annum of diamonds, down from the 1 million carats per annum envisaged under the 2015 mine plan. It also intends to mine a total of 61.9 million resource tonnes, down from 155.9 million tonnes.

Operating expenses are pegged at US$13/tonne treated, with steady state operating expenses at US$55.20 per carat over a shorter nine-year mine life, compared to the 14-year life previously planned.

The company will have the option to revert to the longer-life mine plan should market conditions improve.