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Firestone Loss Narrows as Sales Rise

Increased sales volume outweighed a lower average price.
Mar 31, 2019 4:33 AM   By Rapaport News
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RAPAPORT...
 Firestone Diamonds decreased its net loss in the first fiscal half, as sales grew despite weak prices, the miner said Thursday.

The company reported a loss of $6.6 million from its Liqhobong mine in Lesotho for the six months ending December 31, compared with a loss of $7.8 million the previous year.

“The second half of 2018 saw a global price slump in the smaller, lower-value goods, which negatively impacted our average dollar per carat achieved,” said Firestone CEO Paul Bosma.

Small stones comprise approximately 80% of Firestone’s production, which was under pressure primarily from the Indian midstream, the company noted. However, sales of larger stones, including a light-yellow diamond weighing 326 carats, remained strong.

Rough sales rose 5% year on year to $27.4 million for the period. Sales volume climbed 10% to 385,941 carats, while the average price dropped 4% to $71 per carat. Production jumped 23% to 465,680 carats. 

Firestone has abandoned a project to expand Liqhobong, as doing so would not be economically viable, it reported. The company made this decision after results from its life-of-mine plan — which it completed during the period — indicated that Cut 3, an expansion that would increase carat resources by 40%, could extend the life of the mine by three years. However, the expenses would be too high, given the average prices the miner has achieved. 

Firestone is on track to meet its guidance of between 820,000 and 870,000 carats for the full fiscal year ending June 30, it added.

Image: The Liqhobong mine. (Firestone Diamonds)
Tags: Firestone, Firestone Diamonds, Lesotho, Liqhobong mine, Paul Bosma, Rapaport News
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