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Production update for fourth quarter of fiscal 2013 ending February 28, 2013
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 fourth quarter of
fiscal 2013 ending February 28, 2013
May 6, 2013 Vancouver, BC – Rockwell Diamonds Inc. ("Rockwell"
or the "Company")(TSX: RDI; JSE: RDI) today presents the
market with an operational update which is in line with plan.
On a consolidated basis fourth quarter gravel volumes
processed declined by 6% to 619,546m3 year on year with a
commensurate change in diamond production of 3,854 carats. The
reduction in volume is largely the result of placing the
Tirisano Mine on care and maintenance in December 2012 and
consequently if Tirisano was excluded, the remaining
operations showed a 9% improvement, both in gravel volume
processed and diamonds produced for the same period.
The Saxendrift operations (comprising Saxendrift, Saxendrift
Extension and the Bulk X-ray plant) delivered a 36% increase
in carat production although gravel volume processed declined
by 5%. Klipdam achieved a 44% increase in gravel processed,
demonstrating the benefits of outsourcing the mining
operations. However, Klipdam’s carat recovery declined by 45%,
underscoring management’s decision to accept an unsolicited
offer to sell the mine in late March 2013. The cessation of
operations at Tirisano and the sale of Klipdam represents
another step in effecting the strategy of re-alligning
Rockwell as a value diamond play with a focus on creating real
returns for its shareholders. It also creates a centre of
operations focused within the Middle Orange River area.
Fourth quarter operational update:
Volume and carat production for the Company’s operational
mines for the quarter ended February 28, 2013 was as follows:
Volumes of gravel Carats
Operation processed (m3) Produced
Q4 Q4 % Q4 Q4 %
2013 2012 change 2013 2012 change
Saxendrift 383,770 409,348 -6% 1,929 1,438 34%
Saxendrift tailings 6,592 - - 26 - -
Tirisano 1,823 94,643 -98% 39 557 -93%
Klipdam 227,361 157,636 44% 1,133 2,048 -45%
Other* 0 - - 727 - -
Total 619,546 661,627 -6% 3,854 4,043 -5%
*Other refers to independent contractor/s processing gravel
and sold through the Group’s tender. These carats are excluded
from grade calculations.
Saxendrift operations and Middle Orange River Prospects:
- Combined quarterly volumes of gravel processed at the
Saxendrift Mine and further bulk sampling at the
Saxendrift Extension Project declined 6% year-on-year to
383,770m3 for the fourth quarter, in line with plan. The
decline was directly related to the longer haulage
distances from the Saxendrift Extension Project bulk-
sampling activities. However, the overall grade improved
by 43% to 0.5 carats / 100m3, up from 0.35 carats / 100m3
a year ago, as a result of better grades achieved from
the Saxendrift Extension site. Accordingly, the combined
diamond production from the Saxendrift Mine and the
Saxendrift Extension project increased by 34%, and
yielded1,929 carats.
- Included in the Saxendrift total is a further bulk sample
of 94,142m3 at the Saxendrift Extension project that was
carried out to complete the definition of an additional
resource for this section of the property. This will be
included in an updated NI 43-101 technical report for
Saxendrift to be published by the end of May 2013.
- Recoveries from the Bulk X-ray system were as expected
with the recovery of 26 carats from the remainder of the
coarse recovery tailings in the first half of the fourth
quarter. In mid-December 2012, the system was permanently
relocated to the new Saxendrift Hill Complex mine which
is currently in its production ramp-up phase.
- The Company continues to make good progress with its
strategy to extend the mine life of its Middle Orange
River properties with the status of projects as follows:
o The production ramp-up the new Saxendrift Hill
Complex mine, based on two Bulk X-ray systems, is
proceeding on track.
o The pre-feasibility study for Wouterspan is nearing
completion.
o A proposal to bring the Niewejaarskraal Mine back
into production within six months has been approved
by the Board. It will be funded in part from the
proceeds of the sale of the Klipdam Mine and will
use existing equipment re-located from Klipdam and
Tirisano.
Klipdam:
- Klipdam delivered a 44% increase in volume production,
due to mining operations being outsourced to CML
Operations, a specialized earthmoving contractor, in
November 2012, with total gravel processed of 227,361m3
for the fourth quarter.
- However, carat production fell 45% from the same period
last year with total recovery of 1,133 carats due to
metallurgical issues, which were largely resolved by the
end of the reporting period.
- The Company accepted an unsolicited cash offer to sell
the mine to a private alluvial diamond miner for a total
purchase consideration of R23 million, after quarter-end.
The rationale was that with a remaining life of two
years, based on current resources, the mine was
considered a non-core asset and that the sale proceeds
could be better applied to increase production from
Rockwell’s Middle Orange River properties. These Middle
Orange River properties have better grades and have
received higher diamond values from gem-quality diamonds
than Klipdam.
Tirisano:
- Volumes processed at Tirisano until it was placed on care
and maintenance in December 2012 amounted to 1,823m3,
recovering 39 carats.
- Two royalty mining contracts were also operated by
smaller-scale operators on specific areas of the Tirisano
property, yielding a total of 727 carats. The royalty
miners incur all the operational costs for these
activities while Rockwell maintains responsibility for
diamond security and sales and earns a 12.5% royalty on
all diamond sales which is used to offset the care and
maintenance costs. A third royalty mining contract
commenced operation subsequent to the financial year end.
“We are pleased that production of diamonds from our core
Middle Orange River operations is in line with our budget.
Having eliminated the negative impacts of our problematic
mines, Tirisano and Klipdam, and expanding our Middle Orange
properties, we are on a sounder footing,” explains James
Campbell, CEO, Rockwell Diamonds. “We will increasingly focus
our efforts and capital resources towards delivery of our
Middle Orange River properties and their potential to produce
large, high-quality diamonds. We are confident that our
innovative approach will enable us to unlock the value of
these properties chiefly by recycling our portfolio of assets.
For example, we relocated the Bulk X-ray system to the new
Saxendrift Hill Complex mine and have Board approval to apply
the cash generated from the sale of Klipdam, that was nearing
the end of its mine life, to bring Niewejaarskraal into
production within six months.”
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’s flagship
mine is the Saxendrift Mine, in the Middle Orange River and
the Saxendrift Hill Complex, which will come into production
in the first quarter of fiscal 2014. 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 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
gemstone comprising a major portion of its diamond recoveries
that is enhanced through a beneficiation joint venture that
enables it to participate in the profits on 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 to 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.
06 May 2013
Johannesburg
Sponsor
Sasfin Capital
(A division of Sasfin Bank Limited)
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