Name of the Project
Liqhobong diamond project.

Location
The project is set in the hills of the Maluti mountains, in Lesotho.

Client
Liqhobong Mining Development Company, comprising Firestone Diamonds (75%) and the Lesotho government (25%).

Project Description
The Liqhobong mine development project’s 8.6 ha orebody contains a probable reserve of 11.4-million carats. It has a total indicated and inferred resource of 90-million tonnes, containing an estimated 29.6-million carats (down to 510 m) and is still open at depth.

The project envisages a potential openpit mine plan to a depth of 390 m below the surface, producing 17.6-million carats, with a life-of-mine of 15 years.

Firestone updated Liqhobong’s October 2012 definitive feasibility study (DFS) in November 2013, which reaffirmed the project’s robust economics and secured its funding.

The updated DFS envisages the construction of a new 500 t/h main treatment plant and supporting infrastructure to treat 3.6-million tonnes of ore and the recovery of more than one-million carats a year. This will place it in the top tier of diamond mines globally.

The main treatment plant comprises purpose-built crushing, scrubbing, screening and recovery technology.

The mining and processing will be contractor operated.

Jobs to be Created
The mine currently employs about 795 people.

Net Present Value/Internal Rate of Return
The updated DFS, which assumes a 3% growth in the diamond price, with all costs being kept flat, sets out a base case project-level post-tax net present value (NPV) – using $107/ct and an 8% discount rate – of about $379-million and a post-tax internal rate of return (IRR) of 30%.

An upside project-level post-tax NPV, taking into account the potential revenues from stones larger than 100 ct using $156/ct and an 8% discount rate, is estimated at about $728-million, with a post-tax IRR of 45%.

Value
The updated DFS includes a revalidation of the total project capital scope and cost requirement. Total initial capital costs are estimated at $185.4-million, compared with a 2012 forecast of $167-million.

The revised and revalidated initial capital cost estimate includes an additional $5-million to provide grid power for the project, with the project carrying the full cost of power infrastructure ($15-million). Previously, this had been modelled on the basis of shared infrastructure with other neighbouring mines. The owner's team’s costs and contingency allowances were also included.

Duration
Initial production is expected to start in late 2016.

Latest Developments
Firestone Diamonds expects its Liqhobong diamond mine to reach commercial production at the end of June.

Firestone CFO Grant Ferriman has said that the Liqhobong plant has operated consistently at more than 200 000 t/m and is now gearing up towards the 300 000 t/m nameplate capacity.

Nameplate capacity at the mine has been achieved on multiple occasions and 402 440 t was treated up to December 31, with more than 57 000 ct recovered. A 37 ct white diamond, alongside a further 20 special stones larger than 10.8 ct, as well as several fancy yellow diamonds, were recovered during the six months under review.

The mine’s ramp-up process has not been without challenges, with heavy rainfalls and some plant and equipment teething problems experienced. 

Initially, grades were also negatively impacted on by the under-recovery of the lower-value finer diamonds. Brown has optimistically noted, however, that the grade is steadily improving as minor modifications continue to be made to the plant and is expected to improve as the mine starts treating the better-quality ore.

Meanwhile, waste stripping is on schedule and Firestone is now dewatering the south-eastern side of the main pit to begin accessing better-quality ore later in the financial year.

Key Contracts and Suppliers
DRA Projects (EPCM); Stefanutti Stocks (earthworks and civils); Turnkey Civils Lesotho (residue storage facility) and S.M.E.I Projects (structural, mechanicals, platework and piping).

On Budget and on Time?
Commissioning of the mine started in October 2016, with the mine construction completed on time and within the $185.4-million budget.

Contact Details for Project Information
Firestone Diamonds, tel +44 20 8741 7810, fax +44 20 8748 3261 or email info@firestonediamonds.com.