Maseru — FIRESTONE Diamonds, the London-listed firm, has announces a potential fundraising of £18,5 million (US$25 million or R341,7 million) to fund on-going operations at the Liqhobong Diamond Mine in Lesotho.
The fundraising is through the issue of new ordinary shares at an issue price of 10 pence per share.
In addition, Firestone also announced that it had formulated a revised mine plan to better cater for the current lower-than-expected diamond sale results to enable the company mine sustainably should the lower average diamond values being achieved persist.
Stuart Brown, Chief Executive Officer of Firestone, said the weaker-than-expected diamond market together with lower-than-anticipated recovery of higher value diamonds had put pressure on their cash reserves.
This prompted the need to raise additional equity and restructure the company's debt.
"We believe the Liqhobong Mine remains a quality asset with the potential to deliver attractive returns as the diamond market recovers and the production footprint becomes more representative over the medium term and potential efficiencies are further improved," Brown said.
The Liqhobong Diamond Mine is in the early stages of production.