JOHANNESBURG (miningweekly.com) – Aim-listed Firestone Diamonds expects to decide on the start of mine development at its BK11 project, in northern Botswana, by the fourth quarter of the year, after which production could start by mid-2010, it announced on Friday.

The company noted in a statement to shareholders that the decision to start mine development would be based on the final bulk-sampling evaluation phase, which was currently under way.

The objective of the final phase of evaluation is to process a bulk sample and recover a “sufficiently large parcel” of diamonds in order for a high confidence diamond valuation to be obtained, the company said.

The bulk sample trench has reached a depth of 20 m out of a targeted depth of 30 m, while about 250 000 t out of the targeted 325 000 t of material has been mined.

Mining of the remaining kimberlite was expected to be completed in October, Firestone said.

The diamond-miner noted that much of the mine’s infrastructure had been established to support the 25 t/h pilot production plant, which has been running continuously since July. The pilot plant had also been designed to support full-scale mining operation, which would reduce the time and cost of mine development.

Sufficient water supply and storage capacity had also been put in place for the target production capacity of about 1,5-million tons a year. 

Further, Firestone has also continued to prepare the production plant at its Bonte Koe mine, in South Africa’s Northern Cape province, for relocation to the BK11 project.

“With the company fully financed to production at BK11, and with prices in the rough diamond market continuing to recover from their recent lows, we remain confident about Firestone's prospects,” Firestone CEO Philip Kenny said.

Meanwhile, Firestone and Debswana were expected to finalise agreements, regarding detailed technical and commercial provisions for Debswana’s Jwaneng mine, in Botswana, by the fourth quarter of the year.

Debswana, which is a joint venture between De Beers and the government of Botswana, in February, selected Firestone Diamonds as the preferred bidder to supply, construct and operate a modular tailings treatment plant at the mine on a toll treatment basis.

The two companies were negotiating on the provisions for the plant, which would serve as a pilot facility to demonstrate the economics and capability of the modular plant concept on the Jwaneng tailings resource, said Firestone.

The resource was estimated to be in excess of 30-million tons.

Further, the diamond-miner said that discussions with a number of lenders in relation to debt financing of the capital costs of the project, through a special purpose vehicle, were progressing.

It would likely finalise these arrangements shortly after the Debswana agreement was signed, the company stated.