UK-based diamond mining exploration company Firestone Diamonds has raised $6m through a private placement to develop its flagship Liqhobong Diamond Mine in Lesotho.

Firestone has placed 198.5 million new Ordinary Shares to raise approximately $6m before expenses at £0.02 per share.

The net proceeds of the placing will be used for capital expenditure at the main treatment plant (MTP), working capital for the pilot plant at Liqhobong, general working capital and other purposes including the company’s continued restructuring process. The funds will also used to reduce debt load.

In October 2012, the company announced that it will initially need expenditure of $167m to develop the MTP at Liqhobong.

The company is also pursuing a variety of other funding alternatives required to fund the plant. These other financing initiatives are expected to close during Q4 2013, a move which will provide Firestone with enough capital to fully develop and implement the development.

Once operational, MTP is expected to produce about 1 million carats per annum.