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quarterly resuts for period ended 31 ay 2013
Rockwell Diamonds Inc.
(A company incorporated in accordance with
the laws of British Columbia, Canada)
(Incorporation number BCO354545)
(Formerly Rockwell Ventures Inc.)
(South African registration number: 2007/031582/10)
Share code on the JSE Limited: RDI
ISIN: CA77434W2022
Share code on the TSXV: RDI
CUSIP Number: 77434W103
("Rockwell")
11 July 2013
Unaudited Condensed Interim Consolidated Financial Statements
for the period ended 31 May 2013
Consolidated Statements of Financial Position
As at As at
31 May 29 February
Amounts in Canadian Dollars 2013 2013
Assets
Non-current assets
Mineral property interests 28 290 221 31 405 358
Investment in associate 202 994 207 560
Property, plant and
equipment 28 178 359 33 544 992
Investments and deposits 4 631 724 4 888 415
Rehabilitation deposits 1 645 090 1 818 291
Total non-current assets 62 948 388 71 864 616
Current assets
Inventories 2 458 194 2 304 782
Loans to related parties 112 294 94 183
Current tax receivable 35 476 39 587
Trade and other receivables 6 640 251 5 850 618
Cash and cash equivalents 2 811 302 5 570 626
Total current assets 12 057 517 13 859 796
Total assets 75 005 905 85 724 412
Equity and liabilities
Equity
Share capital 146 856 807 146 862 257
Reserves (17 645 709) (11 874 763)
Retained loss (78 335 394) (77 478 322)
Total equity attributable to
the equity holders of the Group 50 875 704 57 509 172
Non-controlling interest (1 904 895) (2 137 472)
Total equity 48 970 809 55 371 700
Liabilities
Non-current liabilities
Loans and borrowings 3 648 455 3 889 684
Finance lease obligation 197 708 281 029
Deferred tax 5 353 641 6 543 184
Rehabilitation obligation 6 332 958 6 992 157
Total non-current
liabilities 15 532 762 17 706 054
Current liabilities
Loans from related parties 4 485 48 925
Loans and borrowings 1 290 889 1 314 807
Finance lease obligation 322 641 321 083
Trade and other payables 6 376 126 8 121 922
Bank overdraft 2 508 193 2 839 921
Total current liabilities 10 502 334 12 646 658
Total liabilities 26 035 096 30 352 712
Total equity and
liabilities 75 005 905 85 724 412
Consolidated Statements of Comprehensive Income
3 months 3 months
ended ended
31 May 31 May
Amounts in Canadian Dollars 2013 2012
Sale of diamonds 7 822 954 6 071 022
Beneficiation income 1 217 223 1 027 161
Production cost (7 965 492) (6 902 255)
Operating profit before
amortisation and depreciation 1 074 685 195 928
Amortisation of mineral
property interests (192 786) (253 407)
Depreciation of property,
plant and equipment (1 067 366) (1 643 953)
Gross loss (185 467) (1 701 432)
Other income 125 795 155 941
General and administration
expenses (1 270 409) (1 513 931)
Rehabilitation obligation
recognised (72 140) (495 870)
Loss before net finance
costs (1 402 221) (3 555 292)
Finance income 168 262 69 193
Finance costs (200 209) (190 984)
Loss after net finance
costs (1 434 168) (3 677 083)
Share of profit from equity
accounted investment 31 536 26 740
Loss before taxation (1 402 632) (3 650 343)
Taxation 236 385 616 437
Loss for the year (1 166 247) (3 033 906)
Other comprehensive loss
net of taxation:
Exchange differences on
translating foreign operations (5 639 281) (5 342 455)
Total comprehensive loss
for the year (6 805 528) (8 376 361)
Loss attributable to:
Owners of the Group (1 177 707) (2 124 683)
Non-controlling interest 11 460 (909 223)
Loss for the year (1 166 247) (3 033 906)
Total comprehensive loss
attributable to:
Owners of the Group (7 038 105) (7 556 610)
Non-controlling interest 232 577 (819 751)
Total comprehensive loss
for the year (6 805 528) (8 376 361)
Loss per share
Basic and diluted loss per
share (cents) (2,41) (4,41)
Consolidated Statements of Changes in Equity
Amounts in Canadian Dollars
Share capital Foreign Share-
currency based
translation payment
reserve* reserve**
Balance at
1 March 2012 145 632 846 (10 451 664) 7 605 893
Total comprehensive
loss for the year
Loss for the year – – –
Other comprehensive
loss - (8 966 061) -
Total comprehensive
loss for the year - (8 966 061) -
Share-based payment
transactions - - 558 411
Debt conversion, net
of issue costs at
$0.48 per share 218 707 - -
Acquisition of non-
controlling interest 890 774 (621 342) -
Payment on conversion
of mineral right 119 930 - -
Total changes 1 229 411 (9 587 403) 558 411
Balance at
28 February 2013 146 862 257 (20 039 067) 8 164 304
Total comprehensive
loss for the period
Loss for the period – – –
Other comprehensive - (5 860 398) -
loss
Total comprehensive
loss for the period - (5 860 398) -
Share-based payment
transactions - - 89 452
Disposal of
subsidiary - - -
Share issue costs (5 450) - -
Total changes (5 450) (5 860 398) 89 452
Balance at
31 May 2013 146 856 807 (25 899 465) 8 253 756
Amounts in Canadian Dollars
Total Retained Total
net loss equity
reserves attributable
to equity
holders
of the
Group
Balance at
1 March 2012 (2 845 771) (65 620 276) 77 166 799
Total comprehensive
loss for the year
Loss for the year – (10 900 533) (10 900 533)
Other comprehensive
loss (8 966 061) - (8 966 061)
Total comprehensive
loss for the year (8 966 061) (10 900 533) (19 866 594)
Share-based payment
transactions 558 411 - 558 411
Debt conversion,
net of issue costs at
$0.48 per share - - 218 707
Acquisition of non-
controlling interest (621 342) (957 513) (688 081)
Payment on conversion
of mineral right - - 119 930
Total changes (9 028 992) (11 858 046) (19 657 627)
Balance at
28 February 2013 (11 874 763) (77 478 322) 57 509 172
Total comprehensive
loss for the period
Loss for the period – (1 177 707) (1 177 707)
Other comprehensive
loss (5 860 398) - (5 860 398)
Total comprehensive
loss for the period (5 860 398) (1 177 707) (7 038 105)
Share-based payment
transactions 89 452 - 89 452
Disposal of
subsidiary - 320 635 320 635
Share issue costs - - (5 450)
Total changes (6 748 653) (857 072) (7 611 175)
Balance at
31 May 2013 (17 645 709) (78 335 394) 50 875 704
Note(s)
Amounts in Canadian Dollars
Non- Total
controlling equity
interest
Balance at 1 March 2012 (712 429) 76 454 370
Total comprehensive loss
for the year
Loss for the year (2 875 845) (13 776 378)
Other comprehensive loss 232 890 (8 733 171)
Total comprehensive loss
for the year (2 642 955) (22 509 549)
Share-based payment
transactions - 558 411
Debt conversion, net
of issue costs
at $0.48 per share - 218 707
Acquisition of non-
controlling interest 1 217 912 529 831
Payment on conversion
of mineral right - 119 930
Total changes (1 425 043) (21 082 670)
Balance at
28 February 2013 (2 137 472) 55 371 700
Total comprehensive
loss for the period
Loss for the period 11 460 (1 166 247)
Other comprehensive loss 221 117 (5 639 281)
Total comprehensive loss
for the period 232 577 (6 805 528)
Share-based payment
transactions - 89 452
Disposal of subsidiary - 320 635
Share issue costs - (5 450)
Total changes 232 577 (7 378 598)
Balance at 31 May 2013 (1 904 895) 48 970 809
* Currency translation differences arising on the conversion of the
net investment in foreign operations from the functional currency to
the Company’s presentation currency are accumulated in the foreign
currency translation reserve.
** Equity settled share-based payment transactions are accumulated in
the share-based payment reserve.
Consolidated Statements of Cash Flows
3 months 3 months
ended ended
31 May 31 May
Amounts in Canadian Dollars 2013 2013
Cash flows from operating
activities
Cash receipts from
customers 7 462 763 8 011 532
Cash paid to suppliers and
employees (10 449 159) (9 641 410)
Cash used in operations (2 986 396) (1 629 878)
Finance income 73 234 69 193
Finance costs (200 209) (62 379)
Tax paid - (41 901)
Net cash outflow from
operating activities (3 113 371) (1 664 965)
Cash flows from investing
activities
Purchase of property, plant
and equipment (1 621 661) (798 368)
Proceeds from sale of
property, plant and
equipment 42 739 44 485
Net asset disposal 2 556 318 -
Net movement in related
party loans (67 210) 98 261
Net movement in investments
and deposits (155 894) (1 207 339)
(Increase) decrease in
rehabilitation deposits (15 610) 975 343
Net cash inflow (outflow)
from investing activities 738 682 (887 618)
Cash flows from financing
activities
Share issue costs (5 451) (5 293)
Repayment of finance lease
obligations (47 456) (83 312)
Net cash outflow from
financing activities (52 907) (88 605)
Net movement in cash and (2 427 596) (2 641 188)
cash equivalents for the
period
Cash and cash equivalents
at the beginning of the
period 2 730 705 9 911 861
Total cash and cash
equivalents at end of the
period 303 109 7 270 673
Loss per share
Basic and diluted loss per share
Basic loss per share
Cents per share (2,41) (4,41)
Basic loss per share was calculated based on a weighted average number
of ordinary shares of 48 832 600 for the 3 months ended 31 May 2013
(3 months ended 2012: 48 173 515).
Reconciliation of loss for the period
to basic loss
Loss for the period (1 166 247) (3 033 906)
Adjusted for:
Loss attributable to non-controlling
interest (11 460) 909 223
Basic loss attributable to owners of
the Group (1 177 707) (2 124 683)
At 31 May 2013 and 31 May 2012 the impact of share-based payment
options were excluded from the weighted average number of shares, for
the purpose of the diluted loss per share calculation, as the effect
would have been anti-dilutive.
Basic and diluted headline loss per
share
Headline loss per share (cents) (2,45) (4,50)
Reconciliation between basic loss
and headline loss
Basic loss attributable to owners of
the Group (1 177 707) (2 124 683)
Adjusted for:
Profit on disposal of property,
plant and equipment (16 924) (44 485)
Headline loss attributable to owners
of the Group (1 194 631) (2 169 168)
The basic and diluted headline loss per share disclosure is provided
based on the listing requirements of the Johannesburg Stock Exchange
(Group’s secondary listing). The disclosure of basic and diluted
headline loss per share is provided in accordance with Circular
3/2012 as issued by the South African Institute of Chartered
Accountants. Headline loss represents the basic loss attributable to
the owners of the Group excluding certain re-measurements.
Subsequent events
On 19 June 2013 Rockwell 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.
On 8 July 2013, Rockwell executed a second addendum to the Loan where
it was agreed that the Loan may only be converted during the 21 calendar
day period prior to June 26, 2015. The Loan will also be extended for a
further 2 years to June 26, 2015.
Sponsor
Sasfin Capital
(a division of Sasfin Bank Limited)
12 July 2013
Date: 12/07/2013 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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