Firestone flags delay to Liqhobong mine

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Liqhobong Diamond Mine is Firestone's principal assetFIRESTONE Diamonds has warned that the schedule at its Liqhobong diamond mine has slipped back from the end of the first half of next year to the fourth quarter of 2016.

The United Kingdom-based company owns 75 percent of the mine while the remaining shares belong to the Lesotho government.

Adverse weather conditions and the need to shift more earth than had previously been anticipated have added about M156-million to costs.

“Despite adverse weather, increased overburden and the larger rocks encountered at site, the project continues to make good progress,” said CEO Stuart Brown.

He noted that the costs of additional work crews and the acceleration of certain key areas adopted to meet the revised schedule through to production were “all catered for” within the project’s original $185.4-million budget.

“We will continue to work to find other ways to accelerate work streams and improve on the revised completion schedule and will keep shareholders updated as we achieve these milestones,” he added.

Despite the increased earthworks, the company was confident that it could make up lost time through remedial action. It had been working on rescheduling additional earthworks.

“A number of initiatives have been implemented to reduce any resulting delay to the overall programme, including the introduction of an additional shift, additional work crews and redeployment of contractors to areas that are on the critical path from areas which are ahead of schedule,” Firestone said in a statement.

Further, the company sought to delay the delivery of constructed steel and delay other work streams to allow the earthworks to catch up, while, at the same time, reducing the cash drawdown requirements and associated financing charges.

By end-May, Firestone had spent M830-million on the project. Meanwhile, Firestone signed an agreement with Storm Mountain Diamonds, the owner of the Kao mine, in Lesotho, to use the power line alongside Firestone and to contribute M94.5-million of the revised project costs to connect the mines to the national electricity grid.

The grid power project was progressing ahead of schedule and was within budget, with connection to the grid expected in the third quarter. The company estimated that it had made net savings of M70.5-million.

“This is an important milestone for the company, as it will allow Liqhobong to use grid power on site during construction earlier than planned, thus reducing the diesel generating costs and realising a small saving,” it noted. –

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