Liqhobong Mining Development Company (LMDC) has resumed operation at its diamond mine, located within the Liqhobong valley in the Maluti mountains in Botha Bothe after a two-and-a-half-year closure.
LMDC which is owned by Firestone Diamonds (75 percent) and the government (25 percent), first placed the mine on care and maintenance in 2020 amid the coronavirus outbreak.
The mine remained shut, and LMDC laid off its employees in July 2020 when the pandemic halted travel and the miner was unable to sell its goods.
The mine has remained shut since then.
â€œFirestone is pleased to report the successful resumption of operations at the Liqhobong Mine after a two-and-a-half-year care and maintenance period,â€ Firestone said in a quarterly update this week.
It also stated that restart activities continued following the decision on July 7 2022 to restart the Mine.
The long-term mining contractor, according to the update, Turnkey Civils Lesotho (Pty) Ltd, was appointed on July 15 this year and immediately began mobilising equipment to site and commenced mining activities from August 1.
â€œRequired staff were appointed, with 97 percent of the staff returning to previous positions. Early-stage ore treatment commenced on a single day-shift from August 15, 2022. The operational ramp-up proceeded smoothly and according to plan,â€ read the update.
The Chief Executive Officer (CEO) of Firestone, Rob de Pretto, said the companyâ€™s financial position remained â€œvery challengingâ€ with its high debt levels.
â€œAnd whilst we seek to repay this heavy debt burden over time, subject to continuing favorable market conditions, we expect this to take a considerable length of time,â€ de Pretto said.
â€œNotwithstanding this, I am pleased to report on the successful recommencement of operations at Liqhobong after a two-and-a-half-year period of care and maintenance. The smooth ramp-up is a testament to the excellent work that was done by a small on-site maintenance team during the care and maintenance period,â€ he added.
On behalf of the board, he thanked the government, the mineâ€™s bankers, ABSA Bank Limited and its insurer, the Export Credit Insurance Corporation of South Africa for their continued support which he said was crucial in making the recommencement of activities possible.
Firestoneâ€™s bridge loan from debtholder ABSA was increased from about $2 million to about $11.6 million to fund the restart.
It is also working with ABSA on a restructuring plan for its $82.4 million debt, which includes an outstanding balance of $67.6 million.
Throughout the two-and-a-half-year care and maintenance period which commenced in March 2020, the company said management remained mindful that any potential restart of activities would be required to take place at minimal cost and in the shortest possible timeframe.
To achieve this, several workstreams were run in parallel, including, particularly, appointing a long-term mining contractor and essential staff.
â€œDuring the care and maintenance period, and to prepare the Mine for the shortest possible restart time, a stockpile of 245 000 tonnes of previously blasted ore was reworked to the required size using existing equipment that was on-site,â€ read the update.
â€œThe broken ore provided sufficient feedstock to the plant, which operated on a single shift from 15 August 2022. The 245 000 tonnes was estimated to provide feedstock for a period of 60 days,â€ it added.