Firestone Diamonds announces results and management changes

Firestone Diamonds plc, (“Firestone” or the “Company”), the AIM-quoted diamond mining and exploration company (ticker: AIM: FDI), is pleased to announce a financing through Mirabaud Securities LLP to raise £14.7 million before expenses as part of the restructuring of the Company and further development of the Company’s Liqhobong Mine, Lesotho.

The Company has provisionally placed 172,900,000 new ordinary shares of 1 pence each in the Company (the "Placing Shares") with institutional and other investors at a price of 8.5 pence per Placing Share raising £14,696,500 before expenses (the “Placing").

The proceeds of the Placing will be used in the ongoing development of the Company’s Liqhobong asset in Lesotho, repayment of debt, ongoing costs of BK11 in Botswana and for general working capital purposes.

Capital Reorganisation

As the Company’s shares are trading at a price below their par value, the Directors are unable to allot the Placing Shares under the Companies Act 2006. Consequently, the Directors have proposed a reduction in the par value of the Company’s issued ordinary shares from 20p per share to 1p per share by way of a sub-division and re-classification of its existing issued share capital (the “Capital Reorganisation”).

Director Changes

The Company wishes to announce the resignation of Mr Michael Hampton and William Douglas Baxter from the Board of Directors with immediate effect.

Tim Wilkes, CEO of Firestone Diamonds, commented: “Today’s proposed financing concludes a strategic review of Firestone’s operations. We are very pleased with the support from new and existing institutional shareholders in the Placing which was oversubscribed and demonstrates the strong support for the Company's flagship Liqhobong project in Lesotho. Following the review and financing, Firestone is well positioned to continue the plant modifications at Liqhobong and complete the Definitive Feasibility Study in June 2012, a precursor to development of the Main Treatment Plant which should enable Firestone to become a 1 million carat per annum producer by 2015. The Company wishes to thank Mr Hampton and Mr Douglas Baxter for their support and commitment to the Company over the years and wishes them well in their future endeavours."

Firestone Diamonds plc

Unaudited interim results for the six months to 31 December 2011

LONDON: 15 March 2012

The Board of Firestone Diamonds plc, (“Firestone” or “the Company”), the AIM-quoted diamond mining and exploration company (ticker: AIM: FDI), announces its unaudited interim results for the six months ended 31 December 2011 (H1 2012).

HIGHLIGHTS

Liqhobong Mine, Lesotho
Pilot Plant
207,845 tons treated in H1 2012 (H2 2011: 72,991 tons)
70,192 carats produced (H2 2011: 23,296 carats) at a grade of 33.77 carats per hundred tons (cpht)
Further plant improvements underway to reduce large stone breakages and increase throughput
Main Treatment Plant
Definitive Feasibility Study (DFS) on track for completion in June 2012
Diamond sales
42,802 carats sold during H1 2012 (H2 2011: 17,082 carats) at an average price of $59/carat (H2 2011: $140/carat).
H1 2012 $/carat reduction attributable to general diamond price weakening and the average smaller size of stones included in the tender.

BK11 Mine, Botswana
Operations
9,910 carats produced at 2.5 cpht
Further plant improvements including connection to lower cost main electrical power grid
Operations placed on care and maintenance on 27 February 2012
Diamond sales
8,168 carats sold in H1 2012 (H2 2011: 4,277 carats) at an average price of $133/ct (H2 2011: $233/carat).

Financial & Board
Financing activities
£12.8 million net of expenses raised in July and August 2011 from a private share placement
Investment activities
£5.6 million invested in property, plant and equipment
£4.2 million cash on hand on 31 December 2011
Board changes
Mr Abraham Jonker appointed as non-executive director and James Kenny resigned as non-executive director during December 2011
Mr Philip Kenny resigned as executive chairman during January 2012 and Mr Lucio Genovese appointed in his stead as non-executive chairman.

Post Period-end Summary
Conditional placing of £14.7 million and Capital Reorganisation

Outlook
Further investments in the Pilot Plant at Liqhobong expected to reduce diamond breakages and increase plant throughput
Strategic focus now on major development at Liqhobong.

Tim Wilkes, CEO of Firestone Diamonds, commented: “The higher than expected cash outflows in H1 2012 are mainly due to the general weakness in the diamond price experienced from July 2011 combined with technical challenges experienced at both the Liqhobong and BK11 plants. With the restructuring that has been undertaken, the Company is now focused on increasing Liqhobong’s revenue per carat production in 2012 and in developing the Main Treatment Plant in order to reach our target of producing over 1 million carats per annum by 2015, whilst achieving the required run rate by Q4 2014”.