VANCOUVER, Dec. 18, 2012 /CNW/ - Rockwell Diamonds Inc. ("Rockwell" or the "Company") (TSX: RDI; JSE: RDI) as part of its operational update, is pleased to announce that the Group increased the volume of gravel processed by 6% to 747,404m3 and diamonds produced increased by 12% to 5,950 carats, despite having to deal with operational challenges and on-going industrial action at Tirisano. The Saxendrift Complex delivered solid results and Klipdam made progress in addressing efficiency improvements, whilst Tirisano was placed on care and maintenance to preserve cash resources and allow the management to focus on projects more in line with Rockwell's diamond value management strategy.
Third quarter operational update:
Volume and carat production for the Company's operational mines for the quarter ended November 30, 2012 was as follows:
|Operation||Volumes of gravel processed (m3)||Carats Produced|
|Q3 2013||Q3 2012||% change||Q3 2013||Q3 2012||% change|
|Saxendrift Bulk X-Ray||30,383||-||-||633||-||-|
|* Comprising 164,061 m3 from Saxendrift and 297,270 m3 from the Saxendrift Extension Project that was processed at Saxendrift|
|** Comprising 562 carats from Saxendrift and 1,882 carats from the Saxendrift Extension Project using Saxendrift's processing infrastructure|
|***Other refers to independent contractor/s processing gravel and sold through the Group's tender. These carats are excluded from grade calculations.|
Saxendrift Complex and Middle Orange River Prospects:
- Combined quarterly volumes of gravel processed at the Saxendrift Mine and bulk sampling activities at the Saxendrift Extension Project achieved a year-on-year increase of 30% to 461,331m3 for the third quarter. The combined diamond production at the Saxendrift Complex including the Bulk X-ray project improved by 59%, yielding 3,077 carats.
- The Company's flagship operation, the Saxendrift Mine produced above average grades and its processing operations functioned smoothly for the period and at better costs.
- A further bulk sample of 297,270m3 at the Saxendrift Extension project continued to enhance the Company's understanding of the diamond grade and value characteristics of this project.
- The Bulk X-ray system once again achieved good recoveries, totaling 633 carats for the quarter from 30,383m3 of old recovery tailings that had previously been processed by another operator using older technologies. This represents a grade of 2.08 carats/100m3 and includes, most notably, a 145-carat clean makeable and gem color stone.
- Solid progress is being made with plans to extend the mine life of Rockwell's package of Middle Orange River properties as follows:
- Construction of a new mine at the Saxendrift Hill Complex utilizing Bulk X-ray technology, with a monthly processing capability of 100,000 m3 is on track for completion during the first quarter of calendar 2013.
- The pre-feasibility study for Wouterspan is progressing according to schedule.
- Possible developments next year include an in-field screen at the Saxendrift Extension Project and developing a mine similar to the Saxendrift Hill Complex at the Company's Niewejaarskraal Project.
- As announced on December 12, 2012, the board of directors approved the decision to place Rockwell's operations at the Tirisano Mine on care and maintenance. The main catalyst was the onset of further unprotected industrial action at the mine. These issues exacerbated the impact of the operational challenges, including persistent financial losses and a slower than anticipated recovery in the price of smaller diamonds that makes up much of Tirisano's production profile.
- A cash neutral strategy has been taken with regards to care and maintenance costs by pursuing the introduction of additional royalty mining contracts on the property. A detailed metallurgical study is planned while the mine is on care and maintenance to confirm the best design for a fit for purpose plant that is specific to local conditions.
- Although volumes processed at Tirisano declined to 37,780m3 for the third quarter, representing a decrease of 75% from the same quarter last year, the average grade improved to 1.01 carats/100m3 up from 0.81 carats/100m3 a year ago. Lower throughputs were due to the ramping up of operations and the rightsizing project. A total of 381 carats were produced at Tirisano during the quarter.
- The mine exceeded its objectives on the rightsizing initiatives during November that were aimed at reducing the high unit costs and improving earthmoving and plant availabilities. These included outsourcing the mining operations to CML on November 1, 2012 through a three-year contract mining agreement.
- Volumes processed at Klipdam continued to improve with a 12% year-on-year increase to 217,910m3 for the third quarter. Carat recovery declined by 9% to 1,957 carats as a result of mining a slightly lower grade area.
"Our overall throughput and diamond production volumes are consistently tracking closer to expectations, with stable overall diamond production of 5,950 carats for the quarter. We are pleased with the continued performance at the Saxendrift Complex, whose diamond yield increased by 59%, including the Bulk X-ray system that will be key to any future Rockwell mine developments in the region," says James Campbell, CEO, Rockwell Diamonds. "We have taken decisive action to address Tirisano's persistent financial losses, putting our operations at the mine on care and maintenance in order to preserve our cash resources while appropriately planning the way forward. With the initial royalty mining contracts having made a positive contribution to overall production, we are working on additional agreements to extend these revenue streams."
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 gemstones comprising a major portion of its diamond recoveries. Rockwell's involvement in a beneficiation joint venture enables it to benefit in the profits from 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 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.
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