Firestone Sells Second Batch of Rough Inventory

RAPAPORT… Firestone Diamonds observed positive pricing in its third fiscal quarter as the company depleted its rough stockpiles amid the continued closure of the Liqhobong mine in Lesotho.

The miner sold the second of two inventory batches that it had been offering to customers as a test of the market’s recovery. Some 19,942 carats of mainly smaller, run-of-mine goods fetched $900,000 at an average price of $47 per carat — the highest for that category since June 2018, Firestone said in a trading update last week.

Still, sales for the third quarter ending March 31 were lower than the $3.6 million the company generated in the preceding three months. That period saw Firestone sell a larger parcel containing 43,269 carats, including higher-value special stones that drove an average price of $84 per carat.

Firestone’s second- and third-quarter revenue came solely from the sale of those two parcels, as production remained at zero. The company placed Liqhobong into care and maintenance in April last year, when a drop in rough prices made it economically unviable to continue extracting diamonds.

Firestone is in negotiations with entities such as Pacific Road Resources Funds and the Export Credit Insurance Corporation of South Africa in an effort to restructure its debt. The miner, which laid off most of its employees last year, said all parties remained supportive of reaching a solution to enable production at Liqhobong to resume.

“The positive market trend observed during the quarter is encouraging,” said Firestone, which owns 75% of the Liqhobong deposit. “The company is now singularly focused on concluding negotiations [so that] a sustainable balance-sheet solution can be agreed with its debtholders in order for operations at the mine to recommence as soon as practicably possible.”

Image: The Liqhobong mine in Lesotho. (Firestone Diamonds)