VANCOUVER, May 6, 2013 /CNW/ - Rockwell Diamonds Inc. ("Rockwell" or the
"Company") (TSX: RDI; JSE: RDI) today presents the market with an
operational update which is in line with plan. On a consolidated basis
fourth quarter gravel volumes processed declined by 6% to 619,546m3 year on year with a commensurate change in diamond production of 3,854
carats. The reduction in volume is largely the result of placing the
Tirisano Mine on care and maintenance in December 2012 and consequently
if Tirisano was excluded, the remaining operations showed a 9%
improvement, both in gravel volume processed and diamonds produced for
the same period.
The Saxendrift operations (comprising Saxendrift, Saxendrift Extension
and the Bulk X-ray plant) delivered a 36% increase in carat production
although gravel volume processed declined by 5%. Klipdam achieved a 44%
increase in gravel processed, demonstrating the benefits of outsourcing
the mining operations. However, Klipdam's carat recovery declined by
45%, underscoring management's decision to accept an unsolicited offer
to sell the mine in late March 2013. The cessation of operations at
Tirisano and the sale of Klipdam represents another step in effecting
the strategy of re-alligning Rockwell as a value diamond play with a
focus on creating real returns for its shareholders. It also creates a
centre of operations focused within the Middle Orange River area.
Fourth quarter operational update:
Volume and carat production for the Company's operational mines for the
quarter ended February 28, 2013 was as follows:
Volumes of gravel processed (m3)
*Other refers to independent contractor/s processing gravel and sold
through the Group's tender. These carats are excluded from grade
Saxendrift operations and Middle Orange River Prospects:
Combined quarterly volumes of gravel processed at the Saxendrift Mine
and further bulk sampling at the Saxendrift Extension Project declined
6% year-on-year to 383,770m3 for the fourth quarter, in line with plan. The decline was directly
related to the longer haulage distances from the Saxendrift Extension
Project bulk-sampling activities. However, the overall grade improved
by 43% to 0.5 carats / 100m3, up from 0.35 carats / 100m3 a year ago, as a result of better grades achieved from the Saxendrift
Extension site. Accordingly, the combined diamond production from the
Saxendrift Mine and the Saxendrift Extension project increased by 34%,
and yielded1,929 carats.
Included in the Saxendrift total is a further bulk sample of 94,142m3 at the Saxendrift Extension project that was carried out to complete
the definition of an additional resource for this section of the
property. This will be included in an updated NI 43-101 technical
report for Saxendrift to be published by the end of May 2013.
Recoveries from the Bulk X-ray system were as expected with the recovery
of 26 carats from the remainder of the coarse recovery tailings in the
first half of the fourth quarter. In mid-December 2012, the system was
permanently relocated to the new Saxendrift Hill Complex mine which is
currently in its production ramp-up phase.
The Company continues to make good progress with its strategy to extend
the mine life of its Middle Orange River properties with the status of
projects as follows:
The production ramp-up the new Saxendrift Hill Complex mine, based on
two Bulk X-ray systems, is proceeding on track.
The pre-feasibility study for Wouterspan is nearing completion.
A proposal to bring the Niewejaarskraal Mine back into production within
six months has been approved by the Board. It will be funded in part
from the proceeds of the sale of the Klipdam Mine and will use existing
equipment re-located from Klipdam and Tirisano.
Klipdam delivered a 44% increase in volume production, due to mining
operations being outsourced to CML Operations, a specialized
earthmoving contractor, in November 2012, with total gravel processed
of 227,361m3 for the fourth quarter.
However, carat production fell 45% from the same period last year with
total recovery of 1,133 carats due to metallurgical issues, which were
largely resolved by the end of the reporting period.
The Company accepted an unsolicited cash offer to sell the mine to a
private alluvial diamond miner for a total purchase consideration of
R23 million, after quarter-end. The rationale was that with a remaining
life of two years, based on current resources, the mine was considered
a non-core asset and that the sale proceeds could be better applied to
increase production from Rockwell's Middle Orange River properties.
These Middle Orange River properties have better grades and have
received higher diamond values from gem-quality diamonds than Klipdam.
Volumes processed at Tirisano until it was placed on care and
maintenance in December 2012 amounted to 1,823m3, recovering 39 carats.
Two royalty mining contracts were also operated by smaller-scale
operators on specific areas of the Tirisano property, yielding a total
of 727 carats. The royalty miners incur all the operational costs for
these activities while Rockwell maintains responsibility for diamond
security and sales and earns a 12.5% royalty on all diamond sales which
is used to offset the care and maintenance costs. A third royalty
mining contract commenced operation subsequent to the financial year
"We are pleased that production of diamonds from our core Middle Orange
River operations is in line with our budget. Having eliminated the
negative impacts of our problematic mines, Tirisano and Klipdam, and
expanding our Middle Orange properties, we are on a sounder footing,"
explains James Campbell, CEO, Rockwell Diamonds. "We will increasingly
focus our efforts and capital resources towards delivery of our Middle
Orange River properties and their potential to produce large,
high-quality diamonds. We are confident that our innovative approach
will enable us to unlock the value of these properties chiefly by
recycling our portfolio of assets. For example, we relocated the Bulk
X-ray system to the new Saxendrift Hill Complex mine and have Board
approval to apply the cash generated from the sale of Klipdam, that was
nearing the end of its mine life, to bring Niewejaarskraal into
production within six months."
About Rockwell Diamonds:
Rockwell is engaged in the business of operating and developing alluvial
diamond deposits, with a goal to become a mid-tier diamond production
company. The Company's flagship mine is the Saxendrift Mine, in the
Middle Orange River and the Saxendrift Hill Complex, which will come
into production in the first quarter of fiscal 2014. Rockwell also has
two development projects and a pipeline of earlier stage properties
with future development potential. The operations are based on high
throughput processing capability and Saxendrift has among the lowest
unit costs in the industry as a result of implementing fit for purpose
The Company is known for producing large, high quality gemstone
comprising a major portion of its diamond recoveries that is enhanced
through a beneficiation joint venture that enables it to participate in
the profits on the sale of the polished diamonds.
Rockwell also evaluates merger and acquisition opportunities which have
the potential to expand its mineral resources and production profile
and to provide accretive value to the Company.
No regulatory authority has approved or disapproved the information
contained in this news release.
Forward Looking Statements
Except for statements of historical fact, this news release contains
certain "forward-looking information" within the meaning of applicable
securities law. Forward-looking information is frequently characterized
by words such as "plan", "expect", "project", "intend", "believe",
"anticipate", "estimate" and other similar words, or statements that
certain events or conditions "may" or "will" occur. Although the
Company believes the expectations expressed in such forward-looking
statements are based on reasonable assumptions, such statements are not
guarantees of future performance and actual results or developments may
differ materially from those in the forward-looking statements.
Factors that could cause actual results to differ materially from those
in forward-looking statements include uncertainties and costs related
to exploration and development activities, such as those related to
determining whether mineral resources exist on a property;
uncertainties related to expected production rates, timing of
production and cash and total costs of production and milling;
uncertainties related to the ability to obtain necessary licenses,
permits, electricity, surface rights and title for development
projects; operating and technical difficulties in connection with
mining development activities; uncertainties related to the accuracy of
our mineral resource estimates and our estimates of future production
and future cash and total costs of production and diminishing
quantities or grades if mineral resources; uncertainties related to
unexpected judicial or regulatory procedures or changes in, and the
effects of, the laws, regulations and government policies affecting our
mining operations; changes in general economic conditions, the
financial markets and the demand and market price for mineral
commodities such as diesel fuel, steel, concrete, electricity, and
other forms of energy, mining equipment, and fluctuations in exchange
rates, particularly with respect to the value of the US dollar,
Canadian dollar and South African Rand; changes in accounting policies
and methods that we use to report our financial condition, including
uncertainties associated with critical accounting assumptions and
estimates; environmental issues and liabilities associated with mining
and processing; geopolitical uncertainty and political and economic
instability in countries in which we operate; and labour strikes, work
stoppages, or other interruptions to, or difficulties in, the
employment of labour in markets in which we operate our mines, or
environmental hazards, industrial accidents or other events or
occurrences, including third party interference that interrupt
operation of our mines or development projects.
For further information on Rockwell, Investors should review Rockwell's
home jurisdiction filings that are available at www.sedar.com.
SOURCE: Rockwell Diamonds Inc.
For further information:
on Rockwell and its operations in South Africa, please contact
+27 (0)83 457 3724
+27 (0)83 307 7587