Company announcements

Quarterly activities report

29 January 2010

The Board of Firestone Energy Limited (ASX: FSE) are pleased to provide shareholders with its Quarterly Activities Report for the 3 month period ended 31 December 2009.

Highlights

OPERATIONAL

  • The Pre-Feasibility Study Report was received in late December 2009. The review of this report will be finalized in early February 2010, with the aim of prioritizing activities required for the Bankable Feasibility Study. The study has identified the first phase mining project area, which is being estimated to produce just over 100mt over 20 years at low stripping ratios. Further details of this project will be announced during February 2010.
  • Participated fully in the Eskom RFP process (Pre-qualification process for potential future coal supply agreements).

EXPLORATION

  • Updated resource statement includes 97mt of measured, 500mt of indicated and 734mt of inferred resources on the Smitspan property which encompasses the entire Phase 1 project area referred to above.
  • The next phase of drilling includes large diameter (123mm and 165mm) holes for geotechnical, hydro-geological and coal processing testwork. Upon completion the additional information will allow for the objectives of the BFS to be met with regard to increased confidence levels and reduced tolerances on Capex/Opex estimations etc.
  • Finalisation of the social and labour plan studies as part of finalising the environmental management plan documentation. Firestone Energy aims to lodge a mining right application with the Department of Mineral Resources during the first quarter of 2010.

CORPORATE

  • The purchase of the Smitspan farm was concluded during the period
  • Mr John Wallington appointed as Managing Director
  • Mr Rance Dorrington appointed as Company Secretary

OVERVIEW

Pre-Feasibility Study

During the quarter, the Preliminary Feasibility Study ("PFS") report on the Waterberg Coal JV Project report was completed, the results of which will be announced in the forthcoming first quarter of 2010. FSE will continue with specific Phase IV drilling activities to improve the confidence and technical understanding of the Waterberg Coal JV resource estimate. The Bankable Feasibility Study ("BFS") activities are being prioritized with the objective of meeting the required confidence levels.

Continued progress has been made with the potential development of the "mini pit", the development of which is subject to appropriate off-take agreements being concluded.

Environmental and Socio-Economic Impact Assessment

During the quarter, Firestone Energy continued with the finalisation of its drafts of Environmental Management Plan and Social and Labour Plan Impact Assessment ("SEIA") documentation in accordance with Department of Mineral Resources regulations. During the first quarter of 2010, stakeholder meetings to discuss and receive questions on the SEIA will be held at the Lephalale Local Municipality and Waterberg District Municipality.

Mining Right Application

Firestone Energy is now in the process of finalising the Environmental and Social Management Plan and the associated Social and Labour Plan.

Firestone Energy aims to lodge an application for a Mining Right for the Waterberg Project during the first quarter of 2010.

Business Development

During the quarter FSE engaged in extensive market study and business development activities with the objective of identifying and communicating with potential customers of the products anticipated from the afore mentioned project.

The company is participating in working committees with potential key strategic alliance partners, including emerging miners, to explore synergies and address constraints of accessing competitively priced rail and port infrastructure.

Corporate

During the quarter the Company secured the services of Mr John Wallington as Managing Director with effect from 1 November 2009. Additionally the Company appointed Mr Rance Dorrington as Company Secretary effective from 1 December 2009.

For information please contact:

John Wallington
Managing Director
Telephone: +61 8 9381 2755

Information in this report that relates to exploration results and coal resources is based on information compiled by Ms Catherine Teller who is employed by Venmyn Rand (Pty)Ltd and is a member of The Australian Institute of Mining and Metallurgy and the South African Institute of Mining and Metallurgy. Ms Telfer has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which she is undertaking to qualify as a Competent Person as defined in the SAMREC and JORC Codes. Ms Telfer consents to the inclusion in the report of the matters based on her information in the form and context in which it appears.

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