Firestone Diamonds Signs Sales, Project Financing Deals

It has also signed a deal with an international bank to lead project finance for the Main Treatment Plant (MTP) at its main operation, the Liqhobong diamond mine in Lesotho.

The firm said that discussions are progressing well for the large forward sale agreement to significantly reduce its required equity contribution towards the MTP.

"The project finance discussions in respect of the MTP remain on track and an international bank has recently been mandated to lead the process on behalf of the company.  The bank has appointed independent advisors and has commenced its due diligence process. 

"The process is expected to last approximately six months and is subject to the satisfactory completion of the due diligence and the bank's standard internal approval process as well as debt insurance to be provided by the Export Credit Insurance Corporation of South Africa," Firestone said.

The company said it is also progressing well in talks to secure a large forward sale agreement as an added source of finance for the MTP, and it is also looking at other ways to optimize the MTP and further reduce the capital requirements.

If successful, this is expected to significantly reduce the equity contribution required to fully fund the MTP.

As announced in October 2012, the initial capital expenditure required for the plant and associated infrastructure was calculated to be $167 million.