JOHANNESBURG (miningweekly.com) – AIM-listed international mining and exploration company Firestone Diamonds’ Lesotho-based Liqhobong mine was 68% complete at the end of February and remains on track for initial production in the fourth quarter.
Firestone reported on Wednesday that all critical civils and earthworks were complete and its focus was now on the erection of the main plant.
The company had updated Liqhobong’s diamond resource and reserve based on a new geological model, increasing bottom cut-off (BCO) and excluding boart carats. The new mine plan confirmed enhanced project economics.
Further, the revised capital budget of R2.1-billion for the project remained within the original $185.4-million budget, owing to the depreciation of the South African rand against the US dollar.
The company added that R1.3-billion, or 63%, had been spent on the project against the revised capital budget.
Meanwhile, a total of R1.67-billion in orders out of the total revised budgeted of R1.77-billion in engineering, procurement, construct and manage (EPCM) contracts had been placed at the end of December 2015, representing 94% of the total EPCM budget. This was done to remove cost escalation risk.
“The six months to December 31, 2015 saw substantial development at Liqhobong and, importantly, we have continued this into 2016. The project remains on budget and on target to achieve first production during the fourth quarter of this year,” said Firestone CEO Stuart Brown.
The project had a staff complement of 952 employees and contractors, of which 82% were Lesotho citizens. The mine’s grid power project was completed within budget and ahead of schedule in October last year and Liqhobong was now connected to grid power, which allowed for “a consistent supply of electricity at site for the remainder of construction and through to production”.
“In October 2015 we were pleased to announce the completion of a new mine plan and project economics – the culmination of over a year's work – which further derisked the project and enhanced its economics,” added Brown.
He noted that all significant civils and earthworks that were on the critical path had been completed and that the site had been handed over to the structural, mechanical, plate and pipework (SMPP) contractors for the erection of the main plant.
As part of the project team's plans to accelerate construction and recover time lost at the beginning of the project, fabrication of SMPP started ahead of the original planned timeline to ensure that erection did not experience delays resulting from the manufacturing process.
“As a result, both the erection and fabrication processes are ahead of schedule with fabrication progress at 98.7% versus the 96.2% revised baseline, while erection progress is at 22.6% versus the 21.3% revised baseline as at the end of February 2016,” he noted.
During the period, the project team began operational readiness preparations ahead of the expected fourth-quarter production.