Aim-listed Firestone Diamonds has determined that the proposed Cut 3 life-of-mine expansion at its 75%-owned Liqhobong mine, in Lesotho, is not currently economically viable.

The Cut 3 expansion project would have increased the life of the mine by three years and result in 40% more carats compared with the current eight-year mine life.

However, the company this week said that, at the current average diamond values realised and based on current economic assumptions, the cost of the additional Cut 3 waste tonnes renders the extensions economically unviable.

Firestone would, nevertheless, keep the option under review, should the economic climate improve, particularly the average value per carat and projected price growth assumptions.

The company retained the ability to revert to the longer-term plan until the 2021 financial year, after which a mine life extension would become significantly more costly, owing to the increased amount of waste tonnes that would need to be mined.

Meanwhile, during the six months ended December 31, 2018, the mine treated 1.9-million tonnes of ore and recovered 465 680 ct, compared with the 379 716 ct recovered in the six months ended December 31, 2017.

Firestone achieved higher grades of 24.6 carats per hundred tonnes (cpht) in the reporting period, compared with 19.9 cpht in the prior comparable period.

The reporting period saw Firestone recovering its largest diamond to date – a 326 ct light yellow diamond.

The company reported earnings before interest, taxes, depreciation and amortisation of $5.9-million, compared with $7.3-million in the prior comparable period.

Further, its loss for the period under review narrowed to $6.6-million, compared with the loss of $7.8-million incurred in the prior comparable period.

“The second half of 2018 saw a global price slump in the smaller, lower-value goods, which negatively impacted on our average dollar per carat achieved.

“Since then, prices have stabilised at these lower levels and we are looking forward to some improvement once inventory levels in the midstream of the diamond market normalise,” commented CEO Paul Bosma.