Two new joint ventures signed with De Beers

Firestone Diamonds plc

Two new joint ventures signed with De Beers over Orapa and Jwaneng exploration projects

Significant progress by De Beers on Mopipi joint venture exploration project

LONDON: 7 December, 2004

Firestone Diamonds plc ("Firestone" or the "Company") announces that it has signed two new joint venture agreements with De Beers covering the Company's Orapa and Jwaneng kimberlite exploration projects in Botswana.

The Orapa and Jwaneng prospecting licences cover an area of approximately 5,000 square kilometers and are considered to be highly prospective for hosting diamondiferous kimberlite as they are located close to the Orapa and Jwaneng diamond mines. Orapa and Jwaneng are the two richest diamond mines in the world, producing approximately 29 million carats per annum with a value of over $2.5 billion. Much of the area covered by the Orapa and Jwaneng prospecting licences has never been fully explored using modern geophysical exploration techniques, and is considered to be highly prospective for the discovery of new diamondiferous kimberlites.

Under the terms of the new Orapa and Jwaneng joint venture agreements, De Beers will finance and carry out all exploration and evaluation work on the Orapa and Jwaneng projects, up to and including the completion of bankable feasibility studies on any kimberlites discovered in each project area, in return for a 61% interest in each project.

The Company also announces that significant progress has been made in exploration work carried out by De Beers on the Mopipi joint venture project in Botswana, which covers an area of approximately 3,600 square kilometers. A total of 51,408 line kilometres of high-resolution geophysical surveys, comprising airborne magnetics, airborne gravity gradiometry, ground magnetics and ground gravity, have been conducted, covering approximately 95% of the Mopipi project area. Interpretation of data from the geophysical surveys is currently under way. To date, 118 targets have been selected for further investigation. These targets are currently being verified on the ground in preparation for drilling in early 2005. The economic potential of kimberlites BK31 and BK35, previously discovered by De Beers, and located close to the Letlhakane diamond mine, is also being re-evaluated.

Philip Kenny, CEO of Firestone Diamonds, commented: "Firestone currently controls the largest portfolio of diamond exploration rights around the two richest diamond mines in the world. The signing of these two new joint ventures with De Beers indicates that they also believe that the potential for the discovery of new diamondiferous kimberlites in these areas is very good. With the intensive exploration programme currently under way and the technical expertise and financial resources that will be applied to these projects by De Beers, we believe that we will make significant progress towards realising the exciting potential of the projects in the coming year."

Bill McKechnie, Director of Global Exploration for De Beers, also commented: "De Beers is very pleased to have concluded these additional joint venture agreements with Firestone Diamonds for areas in Botswana that we regard as being highly prospective."

Orapa Joint Venture
Firestone's Orapa prospecting licences cover an area of approximately 1,300 square kilometers. The project area adjoins the western boundary of the Orapa Mine, and the southern and eastern boundaries of the nearby Letlhakane Mine, which together produce approximately 17 million carats per annum with a value of about $1.3 billion.

Under the terms of the new Orapa joint venture agreement, De Beers will carry out an intensive exploration and evaluation programme in the Orapa project area, similar to that being carried out on Firestone's Mopipi project to the west of Orapa, which is currently being explored by De Beers in joint venture with Firestone.

High-resolution geophysical surveys, including airborne magnetics, ground gravity and ground magnetics, will be conducted over the entire project area. When data from these surveys has been processed and interpreted, it will be reviewed along with data from previous kimberlite indicator mineral sampling in order to select and prioritise potential kimberlite drilling targets. This work has already commenced, and the initial geophysical work programme is expected to be completed in the first quarter of 2005. A total of 62 targets have already been identified. Drilling of selected targets will be carried out when target identification has been completed, which should be during the second quarter of 2005.

Jwaneng Joint Venture
Firestone's Jwaneng prospecting licences cover an area of approximately 3,700 square kilometers. The project area is located at a distance of between 25 and 75 kilometres from the Jwaneng Mine, which produces approximately 12 million carats per annum with a value of over $1.5 billion.

Substantial exploration work has already been carried out by De Beers in the Jwaneng region, and airborne magnetic data is available for the Jwaneng project area from surveys carried out by the Botswana Geological Survey. Under the terms of the new Jwaneng joint venture agreement, this data will be used in conjunction with data from past kimberlite indicator mineral sampling to identify target areas for follow-up work on the ground. High resolution ground gravity and magnetic surveys will be conducted on selected target areas to identify potential kimberlite drilling targets. This work is expected to commence in early 2005.

Mopipi Joint Venture progress report
Firestone's Mopipi prospecting licences cover an area of approximately 3,650 square kilometres and are located close to the Orapa and Letlhakane diamond mines. Firestone has carried out a substantial amount of exploration at Mopipi over the past 8 years, the results of which strongly suggest the presence of a new diamondiferous kimberlite source in the area. In June 2004, Firestone entered into a joint venture with De Beers over the Mopipi project. Since then substantial work has been carried out by De Beers on the project since then. Extensive geophysical surveys have been conducted, comprising:

• 48,846 line kilometres of high-resolution airborne magnetic surveys, covering 3,264 square kilometres, which is equivalent to approximately 95% of the project area
• 1,350 line kilometres of airborne gravity gradiometry surveys, covering 212 square kilometres
• 1,130 line kilometres of ground magnetic surveys over selected target areas, covering a total of 143 square kilometres
• 82 line kilometres of ground gravity surveys over known kimberlites and selected target areas, covering a total of 7 square kilometres

Processing of the data from the magnetic surveys has been completed, and interpretation and target selection is currently under way. To date, 118 targets have been selected for further investigation. These targets are currently being verified on the ground in preparation for drilling. A drilling rig has been mobilised to the Orapa area, and drilling is expected to commence in early 2005.

The economic potential of kimberlites BK31 and BK35, previously discovered by De Beers, and located in the Mopipi project area close to the Letlhakane diamond mine, is being re-evaluated. As a first step, modeling of high-resolution ground geophysics is being undertaken in order to establish accurate size estimates for the bodies. Ground gravity surveys have already been conducted over BK31, and will be conducted over BK35 in the first quarter of next year. This information will be used to determine drilling positions for sampling of the kimberlites to assess their economic potential.

Orapa and Jwaneng Joint Venture Terms
The terms of the Orapa and Jwaneng joint venture agreements are similar to those of the Mopipi joint venture, and are as follows:

• De Beers will finance and carry out all exploration and evaluation work, up to and including the completion of bankable feasibility studies on any kimberlites discovered in the joint venture project area. Each joint venture will initially be held 51% by De Beers and 49% by Firestone.
• On completion of the first bankable feasibility study in the project area, De Beers' interest in the respective joint venture will rise to 61%.
• Following completion of a bankable feasibility study, Firestone will have an option to call on De Beers to provide loan finance to Firestone for its share of mine construction costs, in return for an additional 4% interest in the project.
• De Beers will be the operator for any mines developed by the joint venture, although mines for which annual production is projected to be below an agreed threshold will be operated by Firestone, with Firestone receiving a higher share of the profits from such mines.

For further information:
Philip Kenny, Firestone Diamonds plc +44 207 370 6452 / +44 783 132 4 645
Leesa Peters, Conduit PR +44 207 618 8707 / +44 781 215 9885
Jamie Cumming, Bell Lawrie White +44 141 314 8103 / +44 776 804 4620