Junior miners and emerging producers around the world continue to feel the pressure of operating within tight margins in a volatile economic environment. However, in Lesotho, the land of the Basotho, the Liqhobong diamond mine continues to show significant promise amidst challenging global markets.
The Liqhobong diamond mine is part of AIM-listed diamond junior Firestone Diamonds’ project portfolio. The mine, projected to become a plus one-million-carat-per-annum operation, will produce across the spectrum, including significant potential for large pale yellow and white stones. The project, which will contribute some 5% to Lesotho’s GDP, is on schedule and in line with budget.
CEO Stuart Brown told SA Mining at a media briefing that there are three key factors that have ensured the success of this junior miner’s project. The first he attributes to the skills and expertise of the team employed on the project; second, the ability to successfully manage and be consistent in terms of relationships, particularly with the government of Lesotho; and third, ensuring that the right contractors were chosen to work on the project.
“We have a highly experienced management and project team with a proven track record in the diamond industry.” He remarked that, despite the wealth of experience garnered at global diamond major De Beers; running a junior mining company requires a different approach to business.
He stressed that the success of a project starts with the success of the ore body. And added that transparency and consistency, as well as a sound financial and project plan remained key factors for success – from the “get go” of the project. That success has translated into the company being able to join the shortlist of diamond producers in the new year.
Production is expected to start in the fourth quarter of this year [as scheduled] within a revised capital budget of R2.1bn and within the original project budget of $185.4m. The operation currently has a stockpile of 50 000t.
The target, Brown explained, is to treat 3.6m tonnes of ore and recover one million carats a year. The operation, located in the Maluti Mountains of northern Lesotho, is an 8.6-hectare kimberlite pipe that contains a probable diamond reserve of 9.5m carats.
The existing mine plan is for open-pit mining over 15 years; while the diamond resource extends to about 520m below surface, totalling around 23m carats at an average grade of 28cpht at a 1.25mm bottom cut-off.
Brown explains that the recovery- and sort-house has been commissioned; while the operation is in final stages of commissioning with all the civil and earthworks almost completed.
“An approved environmental management plan is in place, as well as a new access road now fully operational and water storage capacity secured for the first year of mining,” added Brown.
There are currently 795 employees and contractors on site. Brown said that another milestone for the project has been the zero lost-time injury record that has been maintained, with over three million man- hours worked to date.
In October last year, a new mine plan and project economics were completed, which Brown said had further de-risked the project and enhanced its economics. In addition, during the same period the grid power project was completed and allows for a consistent supply of electricity at site for the remainder of construction and through to production. Firestone Diamonds has an agreement with SMD, the owners of the Kao Mine in Lesotho – SMD will utilise the power line alongside Firestone, and contribute R90.5m of the revised total project cost.
“We expect first diamond sales in January next year. This year, however, is an exciting year for the company and for me, together with the team, look forward to making our way to our goal of initial production in the fourth quarter and to become a leading mid-tier diamond miner, recovering one million carats per annum,” concluded an ecstatic Brown.