Shareholder Offers to Buy Firestone for $67K

RAPAPORT… An investment company that holds nearly a third of Firestone Diamonds’ stock has made an offer to purchase all remaining shares in the company.



PRRF II Investment Holdings owns 239.9 million shares in the miner, which operates the Liqhobong deposit in Lesotho, Firestone said last week. The investment company’s subsidiary, Pacific Road Australia Trust, controls an additional 4.3%.



PRRF will pay GBP 0.01 ($0.01) per share, for a total of approximately GBP 54,963 ($67,441). Firestone sold its BK11 mine in Botswana for $50,000 a year ago, after unsuccessfully trying to offload it for nearly six years.



The offer comes amid Firestone’s high debt and difficulty reopening its business. The miner first closed Liqhobong at the onset of the Covid-19 pandemic. The company’s debt accumulated as it kept the deposit shut, failed to sell its diamonds in a challenging market, and borrowed heavily to subsidize the mine’s ongoing care and maintenance. In March, talks with its lenders to restructure its $82.4 million debt fell through when its loan insurer rejected the transaction.



Firestone is considering the offer and will consult with an independent financial adviser, it said.



Should the deal go through, PRRF plans to reopen the deposit and rehire the workers Firestone laid off in 2020. The investment company intends to ramp the mine back up to its pre-closure production of 800,000 carats per year, it noted. It will also pay any outstanding debt and hire a mining contractor to run operations at the site.



“Once Firestone progresses towards stabilized production, [PRRF] intends to explore several strategic options…including a sale, an acquisition, or the possibility of relisting Firestone on a stock market,” the investor added.



Image: The Liqhobong mine. (Firestone Diamonds)