Following today’s announcement from Firestone Diamonds, I have sold 5,500 shares  (just under a quarter of my holding) at 51.5p. The announcement was no doubt intended to reassure, but for me it raised more questions than it answered.

In their last trading update on 20th July the company said initial production was now expected in “early Q4” and in the analyst site visit presentation from 5th September the company said it would be  testing and optimising the plant during September with a “forecast production start date” of “late September / early October”. In anticipation of first production the share price ran up over the past few weeks only to fall back as September ticked into early October with no news.

And then today, the shares are up on the back of what is, to my mind a holding statement from the company (probably forced on them by their NOMAD), effectively reassuring the market that nothing has gone horribly wrong.

Firestone says today that “commissioning of the plant is now in its final stages”, the historic stockpile is being processed in “wet commissioning” (i.e the first half of the diamond recovery process) and “the Company expects to complete the commissioning of the recovery plant and sort house in anticipation of first diamond recoveries later this month”. All “major construction activities” are now complete.

All well and good, but it does not tell me:

1. Why expected first diamond production has moved back almost a month to  “in October” from late September / early October (or am I wrong to interpret previous statements about the expected date of first production as meaning the actual recovery of the first diamonds?)
2. If all major construction activities are complete, what is not?
3. Specifically, what still needs to be done to get the (dry) recovery plant and sorthouse up and running.

A further update is expected week of 17th October, and no doubt I am just being too impatient. It will probably say first diamonds have been recovered and the shares will rocket.

However I cannot shake a vague worry that something is not absolutely 100%. The shares are up today on an announcement that doesn’t reassure me enough and that seems a sensible opportunity to reduce my holding which was nearly 7% of the Contrarian portfolio (and up 168% since I bought the shares at an average of 19p).

Chicken.

Contrarian stands today at £166,470 with £11,178 of that in cash.