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ROCKWELL DIAMONDS INCORPORATED - Update on Tirisano Mine

Release Date: 12/12/2012 15:30
Code(s): RDI     PDF:  
Wrap Text
Update on Tirisano 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


TIRISANO PLACED ON CARE AND MAINTENANCE AMID PERSISTENT INDUSTRIAL
ACTION AND TO PRESERVE CASH RESOURCES


December 12, 2012 Vancouver, BC – Rockwell Diamonds Inc. ("Rockwell"
or the "Company") (TSX: RDI; JSE: RDI) announces its decision to
place its operations at the Tirisano Mine on care and maintenance
following persistent industrial relations issues and ongoing losses
incurred by the mine. The term ‘care and maintenance’ is used when a
mine has stopped production and is temporarily closed for technical,
environmental, financial or labour relations reasons (Minerals Act,
1991).

The Tirisano Mine, last week, was impacted by a second unprotected
(illegal) strike within a period of four months. It has also been
subjected to persistent industrial relations issues relating to pay
increases despite the fact that the mine has continued to operate at
a loss and these issues being dealt with in full compliance to the
Labour Relations Act (“LRA”) of South Africa.

The mine’s challenges have been exacerbated by operational
complexities as well as a slower than anticipated recovery in the
price of smaller diamonds that make up much of Tirisano’s production
profile, that led to the persistent poor financial performance. The
burden of these losses has been carried entirely by Rockwell whose
black economic empowerment (“BEE”) partner at the mine, Mogopa
Minerals, has been unable to contribute any funding since the mine’s
inception.

Accordingly, the board of directors has approved a decision to place
the mine on care and maintenance in order to preserve the cash
resources of the Company. Rockwell remains confident in the resources
of the property and, as such, a detailed metallurgical study is
planned at Tirisano while the mine is on care and maintenance to
design a fit for purpose plant that is specific to local conditions.
Royalty mining revenues will be used to offset the care and
maintenance costs. With the addition of further royalty mining
contracts, Rockwell anticipates a cash neutral position with regard
to these costs.

“The decision to place Tirisano on care and maintenance has not been
taken lightly and was only made once all possible avenues were
explored to operate profitably using the existing infrastructure,”
says James Campbell, CEO, Rockwell Diamonds. “Rockwell is committed
to providing jobs in areas that are impacted by high unemployment
rates and we are disappointed that these decisions will result in
inevitable job losses at the mine; however, the financial position of
the Company has to be our main priority. We are also working with
Mogopa Minerals to secure funding to enable them to meet their
financial obligations in relation to Tirisano.”

With regards to the future, Campbell explained “Our planned
metallurgical studies at the mine are aimed at designing a fit for
purpose operation that will create value for all stakeholders in the
future. As a team, we have also dedicated significant management time
to turning the mine around, which has now been freed up to focus on
our high potential projects in the Middle Orange River region that
are the growth engine of the Company.”

For further information on Rockwell and its operations in South
Africa, please contact

James Campbell
CEO
+27 (0)83 457 3724


Stephanie 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 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.


Johannesburg
12 December 2012
Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)

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