Company announcements

Quarterly activities report for the period to 31 March 2010

29 April 2010

The Board of Firestone Energy Limited is pleased to provide Shareholders with its Quarterly Activities Report for the 3 month period ended 31 March 2010.

Highlights

Operational

  • The Pre-Feasibility Study Report was received in late December 2009. The review of this report was finalised in early February 2010, with the aim of prioritising activities required for the Bankable Feasibility Study (BFS). 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.
  • The Company continued to participate fully in the Eskom RFP process (Pre-qualification process for potential future coal supply agreements). As a consequence of these interactions the next phase of drilling has been tailored to satisfy specific qualitative and technical queries including a 3t sample for boiler combustion tests.

Exploration

  • Updated resource statement includes 97mt of measured, 500mt of indicatedand 734mt of inferred resources on the Smitspan property whichencompasses 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, as well as provide the specific technical and qualitative analysis referred to above.

Corporate

  • During the period it was decided that the best mechanism for increasing shareholder value would be via a competitive process to attract and secure an appropriate partner to develop its substantial Waterberg Project. Firestone has therefore embarked on a process to invite selected companies to submit proposals to become a cornerstone investor. BBY Limited has been appointed as Corporate Advisor to the process and has a strong track record of securing funding and cornerstone investors for Australian and international resource companies.

Overview

Pre-Feasibility Study

As stated earlier the drilling programme has been designed to be able to respond to specific customer requirements and ensure that the technical understanding of the resource and confidence therein is at a high level. During the quarter the Preliminary Feasibility Study (PFS) report on the Waterberg Coal JV Project report was reviewed. The BFS activities are being prioritised to meet the required confidence and tolerance levels of the project.

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 requirements. 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

The Company finalised the social and labour plan studies as part of finalising the environmental management plan documentation. The Mining Right Application and associated social and labour plan is scheduled for submission during May 2010.

Business Development

Firestone Energy continues to engage in extensive market and business development activities with the objective of identifying and communicating with potential customers. Further exploratory drilling has been planned in response to potential metallurgical coal demand. 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.

For further information please contact:

John Wallington
Firestone Energy Limited
Managing Director
Tel: +61 (08) 9381-2755

Information in this report that relates to exploration results, coal resources or reserves on the properties Smitspan 306LQ, Hooikraal 315LQ, Minnasvlakte 258LQ and Massenberg 305LQ is based on information compiled by Ms Catherine Telfer 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 2004 Edition of the "Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves". 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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