Wrap Text
Operational update
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 achieves 19% growth in diamond sales as average price per
carat increases 30% in fourth quarter
May 8, 2013 Vancouver, BC –Rockwell Diamonds Inc. ("Rockwell" or the
"Company") (TSX: RDI; JSE: RDI;) is pleased to announce a 19%
increase in revenue from diamond sales, before any sales from
beneficiation, for the fourth quarter of fiscal 2013 compared to the
same period last year. The Company extended the positive growth trend
in carat sales from its operations in South Africa’s Middle Orange
River region that are central to its production growth strategy.
Total proceeds of US$7.2 million were recorded from the sale of 5,308
carats at an average price of US$1,355 per carat compared to US$6.0
million for the same period in fiscal 2012. Total sales declined by
8% to 5,308 carats; however, a better overall product mix led to a
30% increase in average price per carat compared to a year ago.
Diamond sales and revenue for the Company’s operations for the
quarter ended February 28, 2013 is as follows:
Revenue Price per
Carats (US$) carat (US$)
Q4 Q4 Q4 Q4 Q4 Q4
2013 2012 2013 2012 2013 2012
Saxendrift 2,440 1,847 4,239,923 3,758,504 1,738 2,035
Saxendrift tailings 422 0 436,882 0 1,035 0
Tirisano 291 975 196,590 591,559 676 607
Klipdam 1,574 2,973 1,915,053 1,680,313 1,217 565
Other* 581 0 403,818 0 695 0
Total sales 5,308 5,795 7,192,266 6,030,376 1,355 1,041
*Other refers to gravel processed by independent contractors and sold
through the Company’s tender process.
The salient features of the fourth quarter diamond sales are as
follows:
- Carats sold from the Saxendrift operation, inclusive of tailings
processed, increased 55% to 2,862 carats at an average price of
US$1,634 per carat, resulting in a 24% increase in revenue from
diamond sales to US$4.7 million.
- The value of sales from Saxendrift amounted to US$4.2 million,
underpinned by better diamond production during the quarter
and resulting in a 32% increase in carats sold to 2,440
carats. The average price per carat at US$1,738 was 15% lower
than the same period last year, but largely in-line with
industry-wide diamond pricing trends.
- Sales of diamonds recovered from Saxendrift tailings by the
Bulk X-ray plant generated total proceeds of $436,882 through
the sale of 422 carats recovered mainly from the coarse
recovery tailings of previous operator that mined using older
technologies. In December 2012, this plant was relocated to
the Saxendrift Hill Complex that is currently in production
ramp up.
- Diamond sales from Tirisano totalled 291 carats at an average value
of US$676 per carat, in-line with budgeted diamond values for this
property. With its operations having been placed on care and
maintenance in the first week of December 2012, a total inventory
of 83 carats from Tirisano remains to be sold. Diamonds recovered
on the Tirisano property from royalty mining contracts generated
total proceeds of US$403,818 during the fourth quarter, at an
average price per carat of US$695 from the sale of 581 carats. A
12.5% royalty from these revenues accrues to Rockwell, and was used
to offset the cost of care and maintenance at the operation.
- Although the number of carats sold from Klipdam declined for the
quarter to 1,574 carats, the value of sales increased by 14% as a
result of a material rise in the average price per carat to
US$1,217, due to the combination of the sale of an exceptional
73.52-carat fancy yellow diamond and a number of stones exceeding
10 carats. Subsequent to year end, the Company accepted an
unsolicited offer to sell the mine and intends to reinvest the
US$2.5 million cash proceeds from this sale to bring
Niewejaarskraal into production with the expectation of generating
higher returns.
Notable Stones
The Company continued to produce large stones at all its operations,
including the recovery of 41 stones exceeding 10 carats during the
fourth quarter as described below:
- 34 stones exceeding 10 carats recovered at Saxendrift. Most
notable are:
- 36.81-carat makeable D-color, no spots
- 28.83-carat sawable round fancy yellow
- 17.85-carat flat makeable, D color and clean
- One stone exceeding 10 carats recovered from the Saxendrift
tailings
- Six stones exceeding 10 carats recovered at Klipdam
All of the diamonds recovered in the plus 30-carat category are gem
stones of commercial quality that are in high demand in the current
market. There were no industrial-quality diamonds recovered in this
range.
These diamonds were channelled into the Company’s beneficiation joint
venture with Steinmetz Diamond Group (SDG), which delivers value-
added future revenues to Rockwell for stones larger than 2.8 carats,
once they have been polished and sold by SDG.
“We are pleased that our Middle Orange River operations continued to
deliver good results for the fourth quarter with a 55% increase in
carat sales and a 24% improvement in revenues from diamond sales.
This area represents the future growth of the Company,” explained
James Campbell, President and CEO, Rockwell. “We are making tangible
progress towards developing other properties in the region, in order
to deliver on our medium term strategic objective of producing 10,000
carats per month. Having eliminated our loss-making operations,
namely Tirisano and Klipdam, we are better placed to start delivering
positive returns.”
Commenting on the diamond market, Campbell said: “We are optimistic
that in the 2013 calendar year, rough diamond prices will show single
digit price increases for smaller diamonds as the market continues to
recover. Rockwell is seeing indications of improving sentiment among
buyers, as evidenced by attendance at our monthly tenders, which
continues to increase. Of particular relevance to Rockwell is the
continued interest by higher net worth individuals in high-valued
diamonds, both for their investment and fashion appeal. With the
majority of our diamond production profile falling into the high-
valued gem category, where demand outstrips supply, we are
particularly well positioned to benefit.”
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 gem stone
diamonds comprising a major portion of its diamond recoveries and has
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 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.
8 May 2013
Johannesburg
Sponsor
Sasfin Capital
(A division of Sasfin Bank Limited)
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