Wrap Text
Update on Klipdam Mine
ROCKWELL DIAMONDS INCORPORATED
(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 TSX: RDI CUSIP Number: 77434W103
Share code on the OTCBB: RDIAF
ROCKWELL’S BOARD APPROVES PLAN TO REDUCE KLIPDAM MINE’S OPERATING COST STRUCTURE
AND IMPROVE PERFORMANCE
October 31, 2012 Vancouver, BC – Rockwell Diamonds Inc. ("Rockwell" or the "Company") (TSX: RDI; JSE: RDI;)
announces a restructuring of the Klipdam Mine operations aimed at reducing the operating costs and improving
its overall performance.
While the remaining mine life of Klipdam Mine is three years (in terms of currently defined resources) and the
mine has a long and profitable history of operations, over the past two years its financial performance has been
negatively impacted by high unit costs, as well as poor earthmoving and plant availabilities. A number of
management interventions have taken place, including the appointment of several mine managers and changing
the mine plan to incorporate extraction of more paleaochannel gravels as well as various changes to the
processing plant. Although Klipdam has recently produced sporadic monthly positive cash flows, its cumulative
loss making performance has persisted, impacting on the overall performance of the Company.
Management has over the last year actively evaluated a number of alternatives to maximize the economic value
of this asset, culminating in a multi-faceted rightsizing proposal that has been approved by the board of directors.
The management team will be restructured, and in-house mining will be replaced by the appointment of a
reputable mining contractor. Although the changeover to a contract mining operation will entail retrenchments, the
impact could be reduced as the contract miner will require local skills.
Through a transparent tender process, Rockwell concluded a three-year contract mining agreement with CML
Operations, a privately-owned contract miner that was established in 2000 and has worked in a number of
different commodities across the industry spectrum from junior miners to blue chip companies. In addition to the
mining contract, a sale agreement has also been entered into to divest of Klipdam’s earthmoving fleet at book
value over a two-year period. This will further reduce the cost base while the mining contract should lead to higher
mining efficiencies and thus lower unit costs.
Minor adjustments to the processing plant will also form part of the right sizing plan, but the overall monthly
capacity of the mine will remain unchanged at 100,000m , providing sufficient resource for the contract mining
term.
“The appointment of a contract miner at Rockwell represents a step change in our operating model. This
significant development should enable us to focus on our core competencies, being the identification and proving
of quality diamond resources and the concomitant recovery and marketing of high value, gem quality diamonds.
Going forward, a similar approach will be adopted at the Saxendrift Hill Mine which is currently under construction.
We are particularly excited with this development in the mining environment, complementing the new
technologies that we have recently successfully implemented in the processing environment at our operations. All
this provides Rockwell with a blueprint for our future operations.” explained James Campbell, CEO of Rockwell
Diamonds.
Mr Campbell concluded: “Leveraging the company’s balance sheet through the sale of Klipdam’s earth moving
equipment will also provide additional cash flow advantages over and above the expected efficiencies planned
through contract mining and we look forward to partnering with CML Operations in this strategic approach to
Rockwell’s operations.”
The Company has also announced the resignation of Michael Hunt, Chief Operating Officer (“COO”) with effect
from October 28, 2012. The board of directors and management team thank him for his contributions during his
tenure. There are no plans to replace the COO role in the short-term. The mine managers and senior project
manager will report directly to the CEO with the balance of the COO’s role being allocated among Rockwell’s
Executive Management team.
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
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 three existing operations, which it is
progressively optimizing, two development projects and a pipeline of earlier stage properties with future
development potential.
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 and 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.
Johannesburg
31 October 2012
Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
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