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Firestone Diamonds has taken seven per cent of John Teeling's African Diamonds by issuing shares worth £2.6 million.

Firestone, which mines and prospects in southern Africa and on the US/Canadian border, insists it has bought into fellow AIM counter African, chaired by the colourful Irish resources player John Teeling, as an investment. Teeling's compatriot Philip Kenny, Firestone's managing director, says 'we have no plans to make a bid and do not intend to increase this holding'.

Firestone, which has a joint venture with diamond colossus De Beers over prospects in South Africa's Groen River, is buying its African Diamonds stake by issuing its own shares to existing African Diamonds holders of 7.2 per cent of African Diamonds' equity. African Diamonds has in the past had a somewhat speculative tinge, but Kenny argues it gives Firestone exposure to exciting prospects in Botswana.

'We are not interested in West Africa [where African Diamonds has several prospects], but we are interested in Botswana,' home of major diamond mines at Orapa and Jwaneng. Much of the ground Firestone wants there has lately been snapped up by other companies, including African Diamonds, and Kenny says that is what prompted the deal.

African Diamonds shares have perked up 1p to 55p on the share deal, valuing their company at £36 million. Firestone shares, recommended by Growth Company Investor at 41.5p in March last year, have by contrast fallen 4.5p to 141.5p.

Some profit-taking might be prudent, while holding on to a chunk for further potential gains.