Aim-listed diamond development company Firestone Diamonds on Monday announced that Absa Bank had received approval from its credit committee to provide Firestone’s 75%-owned subsidiary Liqhobong Mining Development Company (LMDC) up to $82.4-million in debt finance.

LMDC owns 100% of the Liqhobong diamond mine in the Lesotho Highlands.

The initial infrastructure and capital costs of the Liqhobong project were estimated at $185.4-million, with the Absa debt facility to support the development of the main treatment plant (MTP).

"Receipt of Absa committee approval to provide LMDC with the facility for the development of the MTP at Liqhobong, is a major step forward on our journey. In addition, it marks an independent endorsement of Firestone and our project, in what we believe has been one of the most challenging periods that mine funding has encountered in recent years.

"The approval underpins management's approach and commitment to developing Liqhobong and realising the true value of this asset for our shareholders,” incoming Firestone CEO Stuart Brown commented.

The facility would have a total term of 6.5 years, with an 18-month drawdown period for construction and with the repayment of capital occurring in the final 4.5 years of the loan term.

Firestone would be required to fund its contribution to the project, which was the balance required to complete the project, prior to first drawdown of the facility.

Brown said the Firestone board was evaluating a range of options to fund the balance of capital required to complete the project, which it expected to conclude in the near future.

The debt facility was also conditional on, besides others, the approval of commercial and political risk insurance by an export credit agency, as well as other customary conditions standard for facilities of this nature, including the completion of legal and environmental due diligences, documentation and the signing of material contracts.