VANCOUVER, June 26, 2013 /CNW/ - Rockwell Diamonds Inc. ("Rockwell" or the "Company") (TSX: RDI; JSE: RDI) announces that it has executed an addendum with its principal shareholder, Daboll Consultants Ltd., which extends and amends the parties' June 2, 2011 US$2 million convertible loan agreement ("Loan").
The Loan repayment date was extended by two years to June 2, 2015 and the conversion right has been amended so that the Loan is convertible at the prevailing market price of the Company's shares over its 2 year remaining term with a floor price of C$0.16 per share (maximum 12,235,686 shares) provided that the Loan may be converted into no more than 10% of the Company's share capital as of the date of conversion unless a larger number of shares has been authorized by a prior vote of disinterested Rockwell shareholders. Rockwell has agreed to solicit such disinterested shareholder approval at its July 26, 2013 annual and special shareholders meeting. The addendum also extends the current diamond marketing and beneficiation agreements with Daboll's affiliate Steinmetz Diamonds until 2018. This conversion option in the amending addendum is subject to the acceptance of the Toronto Stock Exchange and JSE Limited as of the date hereof.
"This extension reinforces our long standing partnership with Steinmetz Diamonds, both as our strategic marketing partner and Rockwell's largest shareholder," explains Rockwell President and CEO James Campbell. "The strength of this partnership stems from our unique positioning in the diamond industry: Rockwell produces large, high valued investment diamonds and Steinmetz Diamonds focuses on beneficiation and sales in this segment. The majority of our production profile comprises the rare investment grade rough diamonds that Steinmetz Diamonds is renown for polishing and marketing at the high end. Both parties have derived significant value from this partnership to date and we are confident that it will continue to add value going forward."
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 has two operational mines, which it is progressively optimizing, as well as a third mine which will come into production in the first quarter of 2013. 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, the flagship mine has among the lowest unit costs in the industry, as a result of implementing fit for purpose technologies.
The Company is known for producing large, high quality gem stone diamonds comprising a major portion of its diamond recoveries and has 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 would 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 of 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:
For further information on Rockwell and its operations in South Africa, please contact
James Campbell CEO +27 (0)83 457 3724
Stéphanie Leclercq Investor Relations +27 (0)83 307 7587