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ROCKWELL DIAMONDS INCORPORATED - production update for third quarter ending 31 November 2012

Release Date: 18/12/2012 15:30
Code(s): RDI     PDF:  
Wrap Text
production update for third quarter ending 31 November 2012

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 PROVIDES PRODUCTION UPDATE FOR THIRD QUARTER OF FISCAL 2013
ENDING NOVEMBER 31, 2012


December 18, 2012 Vancouver, BC – 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 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 31, 2012 was as follows:
                            Volumes of gravel
Operation                                                  Carats Produced
                             processed (m3)
                                                  %                Q3
                        Q3 2013    Q3 2012             Q3 2013           % change
                                             change              2012
Saxendrift/Saxendrift
                        461,331*   355,308      30%    2,444**   1,933       26%
Ext
Saxendrift Bulk X-Ray    30,383         -         -       633       -          -
Tirisano                 37,780    153,099      -75%      381    1,244       -69%
Klipdam                 217,910    194,166      12%     1,957    2,157       -9%
Other***                      -         -         -       535       -          -
Total                   747,404    702,573       6%     5,950    5,334       12%
 * 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.
Tirisano:


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.
Klipdam:


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.”


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 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.


Johannesburg
18 December 2012


Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)

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