RAPAPORT… Firestone Diamonds will keep its Liqhobong mine closed as it works with its bondholders to restructure its debt and continues to test market prices for its rough.
The miner has reached an agreement with Absa, one of its lenders, to allow it to defer repayment of its debt until September 2021, Firestone said Tuesday. The company is still in discussions with other bondholders about a long-term solution, and expects to complete those talks in the first half of 2021.
In November, Firestone sold a parcel of 43,269 carats of special-size and run-of-mine rough at a tender in Antwerp, aiming to test market prices. Those goods from the mine in Lesotho fetched $3.6 million at an average of $84 per carat, which exceeded the company’s reserve price.
“It was encouraging to see that we received better-than-expected results for the special stones sold at the November 2020 tender, while the smaller run-of-mine category was back to pre-Covid-19 price levels,” said Firestone CEO Paul Bosma.
The miner expects to sell a second parcel, containing 19,942 carats, during the first quarter of 2021 in order to further determine where rough prices stand.
Image: The Liqhobong mine. (Firestone Diamonds)
Firestone Mine Remains Shut Amid Debt Talks
The Bottom Line
- Firestone Diamonds has deferred debt repayment with lender Absa until September 2021 while negotiating with other bondholders.
- The company sold 43,269 carats of rough diamonds in November 2020 at an average price of $84 per carat, exceeding reserve prices.
- A second parcel of 19,942 carats is planned for sale in Q1 2021 to further assess rough diamond market prices.
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