Liqhobong increases revenue with impressive performance


Herbert Moyo

LIQHOBONG Diamond Mine realised US$16, 8 million in revenue after selling 211 368 carats worth of diamonds in the third quarter of its financial year which ended on 31 March 2019.

This was revealed by the company’s majority shareholder Firestone Diamonds who also said that the figure represented a substantial increase from the US$13, 9 million revenue realised from the sale of 191 735 carats in the second quarter of the 2019 financial year.

Although the company did not say where the diamonds were sold, the recent sales however, boosted the mine’s net cash flow to US$29, 9 million as at 31 March 2019 up from US$26, 2 million for the second quarter.

Firestone Diamonds is a United Kingdom-based company, which trades on London’s Alternative Investment Market (AIM). It has 75 percent shares in the Liqhobong Mine and the remaining 25 percent stake is held by the government.

Firestone began full scale commercial production at Liqhobong on 1 July 2017 and its largest find to date is a 134-carat light yellow gem which was recovered in October 2017.

The mine’s most valuable stone recovered to date is a 70-carat white diamond which was sold in March this year.

“A number of other high value stones were also sold during the third quarter including a 46 carat white diamond,” Firestone said in a statement to the Lesotho Times this week.

“The improved average sales value realised for the quarter was largely due to the sale of several large, high quality diamonds that were recovered since December 2018. It was also encouraging to see a modest increase in the average value realised for the smaller, lower value goods.

“There were also the notable recoveries of a 72-carat yellow diamond, a 22-carat white diamond and an 11-carat fancy light-pink diamond, all of which will go on sale at the upcoming tender in early May.

“An average value of US$80 per carat was achieved in the third quarter, up from US$72 per carat in the second quarter with signs of recovery in prices realised for the smaller lower value goods and 1 242 481 tonnes of waste was mined (up from 902 151 tonnes in the second quarter) and the mine is on track to meet guidance range of between 4, 3 million tonnes and 4, 8 million tonnes for the 2019 financial year.

“A combination of cost savings and local currency weakness against the United States dollar resulted in operating costs for the third quarter of US$11, 55 per tonne treated (slightly lower the US$12 per tonne treated during the second quarter) which remains well below the guidance range of between US$15 and US$16 per tonne treated to the end of June 2019.

“Costs were US$2, 7 million lower than planned for the quarter and are US$7, 4 million lower on a year to date basis, mainly as a result of the weaker local currency. The positive impact of the weaker local currency is expected to continue for the remainder of the 2019 financial year as currency hedges are in place to cover 100 percent of the expected operating costs at average rates exceeding R14, 50 to US$1.”

Firestone chief executive officer Paul Bosma said the company spent most of the third quarter “mining in the lower grade northern part of the pit and it was pleasing to see an increase in average diamond value which resulted in improved revenue for the quarter”.

“Besides continued strong demand for our special stones it was also encouraging to see a modest increase in pricing for the smaller, lower value goods at the March sale. During the final quarter of the year, mining will return to the higher grade, southern part of the pit. The rainfall increased in March and we received very good rains during April which have replenished our reservoirs, the extent to which should be sufficient to see us through the coming dry season.”

In addition, the company reported that just like the second quarter its safety record was excellent as there was “zero lost time” from injuries to employees during mining operations.

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