Wrap Text
Quarterly 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 PROVIDES PRODUCTION UPDATE FOR FIRST QUARTER OF FISCAL 2014
ENDING MAY 31, 2013
July 4, 2013 Vancouver, BC – Rockwell Diamonds Inc. ("Rockwell" or
the "Company") (TSX: RDI; JSE: RDI) today presents a quarterly
operational update in line with the Group’s strategy. On a
consolidated basis, first quarter processed gravel volumes increased
by 11% to 893,833m3 year-on-year while diamond production was 33%
lower at 4,824 carats, both results inclusive of contractors. The
reduction in carat production is mainly the result of the operations
at Tirisano being placed on care and maintenance in December 2012 and
the sale of Klipdam at the end of March 2013. The production and
carat recovery of Saxendrift was consistent, including the recovery
of nine stones exceeding 20 carats. The royalty mining contractors
operating at the Tirisano property gained momentum with the
production of 1,984 carats and the first diamonds were also recovered
from the newly commissioned Saxendrift Hill Complex Mine during the
quarter.
First quarter operational update:
Volume and carat production for the Company’s operational mines for
the quarter ended May 31, 2013 was as follows:
Volumes of gravel processed
Carats Produced
(m3)
Operation
% Q1 Q1 %
Q1 2014 Q1 2013
change 2014 2013 change
Saxendrift 461,184 453,204 2% 2,036 2,126 -4%
Saxendrift
129,427 - - 269 - -
Hill Complex
Tirisano - 123,048 - - 1,222
Klipdam 65,702 232,216 -72% 535 2,768 -81%
Total from
own 656,313 808,468 -19% 2,840 6,116 -54%
operations
Saxendrift
- - - - 1,118 -
tailings
Contractors* 237,520 - - 1,984 - -
Total 893,833 808,468 11% 4,824 7,234 -33%
*Contractors refers to independent royalty contractors processing
gravel and sold through the Group’s tender. These carats are excluded
from grade calculations.
Saxendrift operations and Middle Orange River Prospects:
- Quarterly volumes of gravel processed at the Saxendrift Mine, all
mined at the traditional mining area (Brakfontein), showed a marginal
increase of 2% to 461,184m3. The recorded grade of 0.44 carats /
100m3, down from 0.47carats / 100m3 in the prior year, was within the
anticipated range for the mine. Carat recoveries for the quarter
totaled 2,036 carats, compared to 2,126 carats in the quarter ended
May 31, 2012. The mine’s production in April 2013 was particularly
good, with the recovery of nine stones exceeding 20 carats, of which
four exceeded 50 carats.
- Production ramp up of the Saxendrift Hill Complex mine, based on
two Bourevestnik X-ray bulk sorters and two single particle sorters,
continued. During this ramp up phase, 269 carats were recovered from
129,427m3 of gravel processed. This is in line with Rockwell’s
strategy to mine the two-year resource on a block basis, with mining
in the first quarter being predominantly in a lower grade block.
Several high quality diamonds were recovered.
- The Company continues to make good progress with its other
development projects in the Middle Orange River region as follows:
- Construction of the new processing plant at Niewejaarskraal
Mine is on track and wet commissioning took place early in the
second quarter. Management anticipates that the mine will be
ramped up to full production within three months.
- The results of the preliminary economic assessment for
Wouterspan showed viable economics and the Company is
currently reviewing options to bring this asset to account.
Klipdam:
- Production at Klipdam amounted to 535 carats from 65,702m3 of gravel
processed until the sale agreement for the mine was concluded at the
end of March 2013. This represents a grade of 0.81 carats per 100m3,
down 32% from the comparable quarter in fiscal 2012.
- In March 2013, the Company accepted an unsolicited cash offer to
sell Klipdam for $2.6 million based on the rationale that the mine
was considered non-core and the sale proceeds could be better applied
to increase production from Rockwell’s Middle Orange River
properties.
Royalty Mining
- Three royalty mining contracts were in effect on the Tirisano
property during the first quarter, worked by two privately owned
alluvial diamond mining operators.
- A total of 1,984 carats were recovered from 237,520m3 of gravel
processed.
- With two additional contracts awarded, monthly production volumes
from the Tirisano royalty mining contracts are set to increase to
150,000m3 by the end of calendar 2013.
- A further contract for Rockwell’s Zwemkuil property, in the Middle
Orange River region, has been finalized and projected monthly volumes
of 50,000m3 will commence in the second quarter.
“Rockwell’s operational performance for the first quarter of fiscal
2014 reflects the transition of the Company as we have narrowed our
focus on growing the production profile, from specific footprints
that deliver better efficiencies and greater economies of scale. Our
first such footprint is the Middle Orange River region,” explains
James Campbell, CEO and President of Rockwell Diamond. “We have a
track record of profitably operating mines in this region which
traditionally yields high value gem quality diamonds. The operations
at Saxendrift Hill Complex are gaining traction while the
Niewejaarskraal operations are being commissioned within three months
of presenting the project proposal to the board, a performance
milestone for the Company. We are positioned to have three producing
mines in the Middle Orange River region by the end of the calendar
year. These operations will have a total monthly processing capacity
of 370,000m3 against our mid-term objective of 500,000m3. Meanwhile,
we are pleased that our three royalty mining contracts at Tirisano
delivered the anticipated production during the quarter and we look
forward to a positive financial contribution as the two additional
contracts come on stream with a total monthly production target of
150,000m3.”
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.
4 July 2013
Johannesburg
sponsor
Sasin Ca[ital (a division of Sasfin Bank Limited)
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