Firestone profits drop like a stone

Firestone Diamonds, AIM-quoted mining company, took a tumble after full year figures showed it had plunged deep into the red.

The firm posted pre-tax losses of £30.4m, compared to a £3m loss the year before, on revenues that jumped to £6.5m from £2.5m.

A large proportion of this - £19.8m - related to an impairment charge and operating losses at its BK11 mine in Botswana, which has been mothballed.

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The firm has been hit by rough diamond prices, which declined significantly in November 2011 and have not yet recovered.

More specifically, the prices of smaller, near gem and brown diamonds present at its Liqhobong site in Lesotho remained under pressure, it said.

It is also undergoing a restructuring under its new management team and is focusing on Liqhobong, with the goal of becoming a one million carat per annum producer from 2015.

The company did no work on any of its exploration licences in Botswana during the year, saying it was investigating ways of unlocking value from these assets.

Shares were down 15.7% by 15:15, following the announcement.

MM