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MODERN MINING
January 2015
DIAMONDS
Top projects
Liqhobong in winter. This
photo, taken in 2012, shows
the original plant at the
site which has now been
removed.
Bell ADTs from Turnkey Civils
Lesotho (TCL), shortly after
arriving on site. TCL is the
contractor for the Residue
Storage Facility (RSF) and
moved on to site in June
last year.
Firestone that, despite being a cash-strapped
junior, it was determined to develop a Tier 1
mine at Liqhobong.
At the time of being appointed CEO of
Firestone, Brown said, “I am extremely excited
by the opportunity that Firestone provides and
I look forward to bringing all my experience
and passion for diamonds to the company as
it moves to its next phase of developing the
Liqhobong deposit. After two years out of the
diamond industry – an industry that has been
a huge part of my life for 20 years – I am thor-
oughly revitalised, and ready to help Firestone
bring a high quality, near-term asset on stream.”
Revitalised he has proved to be. Within
weeks of becoming CEO, he had secured the
funding for Liqhobong and in mid-January
2014 Firestone was able to announce a fund-
ing package of US$140 million and a project
debt facility of US$82,4 million, no mean
achievement given then – and indeed current
– conditions in the resources industry and the
extreme difficulty of raising money for new
mining projects of any type.
Recalling this period, Brown says there was
a great deal of scepticism in the market about
Firestone’s plans. “This was evident during
the road show we undertook at this time,”
he recalls. “People asked me how a company
with a market cap of around US$35 million
could possibly expect to raise an equity/
debt package of over US$220 million. They
said, ‘You’re joking – it can’t be done.’ But
I’m pleased to say we proved them wrong. I
attribute our success in great part to the qual-
ity of our DFS, which was completed by DRA
in 2012, revised in late 2013 and thoroughly
reviewed by independent experts. In addition,
we had put together a well thought-out plan
for project implementation over a two-year
period which was realistic and attainable and
which impressed the market.”
The revised DFS indicates a base case
project NPV at 8 % of US$379 million and
a post-tax IRR of 30 % but with a significant
upside case based on the potential revenues
from larger diamonds of 100 carats plus. The
upside case would deliver an NPV at 8 % of
US$728 million and an IRR of 40 %. Explaining
these figures, Brown says the main pipe at
Liqhobong is something of an anomaly, with
most of the neighbouring mines and projects
having kimberlites which are extremely low