Rockwell Updates Diamond Sales Noting Price Improvements



    
    40-ct Stone Sells US$15,200 per Carat; 21-ct Stone Sells US$17,400 per
    Carat
    

    VANCOUVER, Aug. 18 /CNW/ - Rockwell Diamonds Inc ("Rockwell" or the
"Company") (TSX: RDI; JSE: RDI; OTCBB: RDIAF) updates production and diamond
sales for 2009. Reported sales are for diamonds produced from the Holpan,
Klipdam, and Saxendrift mines. The Company's fourth operation, Wouterspan,
which is located on the Middle Orange River adjacent to Saxendrift remains on
care and maintenance. All of these mines are located in the Northern Cape
Province of South Africa.
    Diamond sales since March 2009 are summarized by month in the table
below. Sales and revenues achieved since the start of 2009 have included a
combination of tenders, direct selling of select goods to specialized
manufacturers, sales to the South African State Diamond Trader, and income
from special stones beneficiated in terms of Rockwell's agreement with the
Steinmetz Diamond Group.

    
    -------------------------------------------------------------------------
                                              Revenue          Average Value
    Month                   Carats              (US$)            (US$/carat)
    -------------------------------------------------------------------------
    March                 2,872.47           $1,526,521            $  531
    -------------------------------------------------------------------------
    May                   2,243.82           $1,311,929            $  585
    -------------------------------------------------------------------------
    June                  1,564.64           $1,094,857            $  700
    -------------------------------------------------------------------------
    July (i)              2,486.38           $1,795,188            $  722
    -------------------------------------------------------------------------
    July (ii)             1,809.38           $2,215,737            $1,225
    -------------------------------------------------------------------------
    

    Sales data for individual mines and the group average for the two latest
sets of diamond sales are described below.

    Early July Diamond sales: An average price of US$722 per carat was
achieved from the first sale in July which included production from the period
of late May and June 2009, shown in the table above as July (i). Diamonds sold
for this period include:

    
                   -   15 stones in the 10-20 carat range
                   -   6 stones in the 20-30 carat range
                   -   Largest stone was 38.33 carats.

    A third of the goods shown in the July (i) sale were marketed through
direct sales and the balance was sold by tender. Fifty-one buyers attended the
tender and 45 buyers bid on parcels. Sales in the 0.5 to 10 carat range showed
an increase of at least 10% above the previous sales. There were also price
increases for cleaner stones. Details by mine are tabulated below:

    -------------------------------------------------------------------------
                                      July (i) Diamond Sales
    -------------------------------------------------------------------------
                                              Revenue          Average Value
    Mine                   Carats              (US$)            (US$/carat)
    -------------------------------------------------------------------------
    Holpan                  612.39         $  332,409.73         $  542.81
    -------------------------------------------------------------------------
    Klipdam               1,042.36         $  599,345.27         $  574.99
    -------------------------------------------------------------------------
    Saxendrift              831.03         $  863,427.58         $1,038.98
    -------------------------------------------------------------------------
    Total                 2,485.78         $1,795,182.58         $  722.18
    -------------------------------------------------------------------------
    

    Late July Diamond sales: Results from the most recent sale for Rockwell
diamonds (table July (ii) below) for which an average price of US$1,224 per
carat was achieved. These goods were mined in late June and July 2009. A
limited amount of direct sales were done and a greater part of the production
was sold via tender. Diamonds included in these sales figures included the
following:

    
                   -   7 stones in the 10 - 20 carat range
                   -   3 stones in the 20 - 30 carat range
                   -   1 stone in the 30 - 40 carats range
                   -   1 stone in the 40 - 50 carat range
    

    Two mid-sized stones achieve excellent prices: The largest stone sold in
late July was a 40-carat D-colour flat stone with inclusions in the surface
which achieved a price of US$15,200 per carat. In addition, an excellent
21.69-carat internally flawless stone of E-colour achieved a price of
US$17,400 per carat.
    Sales prices for late July showed an approximate 10% increase over the
previous period for small stones (less than 0.75 carats), and approximately 5%
increase for 0.75-2.49 carat stones, whereas 2.50-4.79 carat stones achieved
similar prices to the previous sale for better quality goods. Spotted diamonds
(stones with a large number of inclusions) achieved far lower prices than in
the previous sales period.

    
    -------------------------------------------------------------------------
                                       July (ii) Diamond Sales
    -------------------------------------------------------------------------
                                               Revenue              Value
    Mine                    Carats              (US$)             US$/carat
    -------------------------------------------------------------------------
    Holpan                   453.60         $  622,554.00         $1,372.47
    -------------------------------------------------------------------------
    Klipdam                  916.36         $  286,318.70         $  312.45
    -------------------------------------------------------------------------
    Saxendrift               439.42         $1,306,850.90         $2,974.04
    -------------------------------------------------------------------------
    Total                  1,809.38         $2,215,723.60         $1,224.58
    -------------------------------------------------------------------------
    

    Production and costs: Production statistics for each mine are tabulated
below. The average cash costs of production from March 1 to July 31, 2009
(over the Company's 2010 fiscal year) for the group has been approximately
US$2.78 per tonne. A combination of restructuring, efficiency and plant
throughput improvements, cost control measures, and increasing production are
successfully keeping monthly cash costs below the Company's target range of
US$3.00-3.50 per tonne. This unit cost is expected to remain at the low end of
the range as the Company continues to increase production at existing
operations and improve processing plant efficiencies.

    
    -------------------------------------------------------------------------
                                    Production March-July 2009
    -------------------------------------------------------------------------
                                                 Average Grade
                     Volume                        (carats/           Cost
    Mine         (cubic meters)     Carats     100 cubic meters)  (US$/tonne)
    -------------------------------------------------------------------------
    Holpan           338,351       2,330.50           0.69            2.97
    -------------------------------------------------------------------------
    Klipdam(*)       404,108       3,667.90           0.91            2.67
    -------------------------------------------------------------------------
    Saxendrift       415,086       2,741.25           0.66            2.68
    -------------------------------------------------------------------------
    Total          1,157,545       8,747.93           0.76            2.78
    -------------------------------------------------------------------------
    (*) Included in the Klipdam inventory are 199.89 carats from Windsorton,
        a prospecting right
    

    In response to the greater than 50% decrease in diamond prices in the
latter part of 2008, Rockwell suspended diamond sales through late 2008 and
early 2009 and resumed sales in late February 2009. Rockwell's 2009 sales
strategy has achieved some success by a combination of direct sales to select
buyers and manufacturers and sales by tender. Sales during the first three
months of 2009 comprised a combination of direct selling to buyers, and
limited tenders sales given overall buying interest was subdued and
opportunistic buying patterns were apparent for about 30% of the buyers. Since
June, there has been stronger buying interest and attendance at diamond
tenders has increased with the numbers of buyers at the latest tenders
approaching the levels apparent in 2008. Equally encouraging, prices have
remained firm in spite of a large release of diamonds by De Beers in June and
the recent resumption of Russian diamond sales.
    Overall Rockwell has noted good demand in the 2 to 10 carat rough stone
range, with the strongest buying focussed on the 2 to 5 carat market segment.
Demand and prices for 3 carat rough stones have been extremely strong since
March 2009 and prices realized have been similar to those for early 2008 for
better quality goods. Demand and prices for plus 10 carat stones, however,
have remained subdued, although top quality white and yellow stones have
started to move with prices at about 60 to 75% of last year.
    President and CEO John Bristow commented, "Rockwell is encouraged by the
improvement in buying activities by diamantaires and manufacturers along with
the concomitant increase in prices. Based on results to date and our view on
demand, sales, and production trends, we foresee a steady overall improvement
in prices, albeit staying well below the highs of 2008, for our production
going forward through the remainder of the 2009 calendar year. We believe that
our swift response to cut costs and production in late 2008 and early 2009 has
allowed the Company, largely, to weather the worst of the market conditions.
At prices of about US$1,000 per carat and monthly production of 2,400 carats,
the Company is cash flow positive, and as prices improve further Rockwell will
return to profitability. Rockwell is ideally placed to resume operations at
Wouterspan as the market strengthens and thereafter resume its growth and
consolidation plans in the medium term."

    
    John Bristow
    President and CEO

     No regulatory authority has approved or disapproved the information
                       contained in this news release.

                         Forward Looking Statements
    

    This release includes certain statements that may be deemed
"forward-looking statements". Other than statements of historical fact all
statements in this release that address future production, reserve or resource
potential, exploration drilling, exploitation activities and events or
developments that each Company expects are forward-looking statements.
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. There is no certainty of the financing completing. Factors that
could cause actual results to differ materially from those in forward-looking
statements include market prices, exploitation and exploration successes,
changes in and the effect of government policies regarding mining and natural
resource exploration and exploitation, availability of capital and financing,
geopolitical uncertainty and political and economic instability, and general
economic, and market or business conditions. Investors are cautioned that any
such statements are not guarantees of future performance and that actual
results or developments may differ materially from those projected in the
forward-looking statements. For more information on Rockwell, Investors should
review Rockwell's annual Form 20-F filing with the United States Securities
and Exchange Commission www.sec.com and the Company's home jurisdiction
filings that are available at www.sedar.com.





For further information:

For further information: For further details on Rockwell Diamonds Inc.,
please visit the Company's website at www.rockwelldiamonds.com or contact
Investor Services at (604) 684-6365 or within North America at 1-800-667-2114


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