Unaudited Interim Results for the period ended 31 August 2013 Rockwell Diamonds Inc. (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 TSXV: RDI CUSIP Number: 77434W103 ("Rockwell") Unaudited Condensed Interim Consolidated Financial Statements for the period ended 31 August 2013 Consolidated Statements of Financial Position As at As at 31 Aug 28 Feb Amounts in Canadian Dollars 2013 2013 Assets Non-current assets Mineral property interests 28 313 892 31 405 358 Investment in associate 227 565 207 560 Property, plant and equipment 30 405 751 33 544 992 Other financial assets 4 832 871 4 888 415 Rehabilitation deposits 1 664 151 1 818 291 Total non-current assets 65 444 230 71 864 616 Current assets Inventories 3 839 957 2 304 782 Loans to related parties 101 317 94 183 Current tax receivable 35 545 39 587 Trade and other receivables 5 961 780 5 850 618 Cash and cash equivalents 1 861 904 5 570 626 Total current assets 11 800 503 13 859 796 Total assets 77 244 733 85 724 412 Equity and liabilities Equity Share capital 146 856 807 146 862 257 Reserves (17 485 895) (11 874 763) Retained loss (79 711 469) (77 478 322) Total equity attributable to the equity holders of the Group 49 659 443 57 509 172 Non-controlling interest (1 973 218) (2 137 472) Total equity 47 686 225 55 371 700 Liabilities Non-current liabilities Loans and borrowings 3 743 163 3 889 684 Finance lease obligation 140 578 281 029 Deferred tax 5 916 171 6 543 184 Rehabilitation obligation 7 619 375 6 992 157 Total non-current liabilities 17 419 287 17 706 054 Current liabilities Loans from related parties 4 291 48 925 Loans and borrowings 1 293 400 1 314 807 Finance lease obligation 300 472 321 083 Trade and other payables 8 925 757 8 121 922 Bank overdraft 1 615 301 2 839 921 Total current liabilities 12 139 221 12 646 658 Total liabilities 29 558 508 30 352 712 Total equity and liabilities 77 244 733 85 724 412 Consolidated Statements of Comprehensive Income 3 months 6 months 3 months 6 months Amounts ended ended ended ended in 31 August 31 August 31 August 31 August Canadian Dollars 2013 2013 2012 2012 Sale of diamonds 8 614 267 16 437 221 6 964 374 13 035 396 Beneficiation income 1 254 523 2 471 746 439 584 1 466 745 Production cost (7 335 768)(15 301 260) (7 204 106)(14 106 361) Operating profit before amortisation and depreciation 2 533 022 3 607 707 199 852 395 780 Amortisation of mineral property interests (188 082) (380 868) (220 034) (473 441) Depreciation of property, plant and equipment (1 103 244) (2 170 610) (1 715 753) (3 359 706) Gross profit (loss) 1 241 696 1 056 229 (1 735 935) (3 437 367) Other income 152 834 278 629 387 713 543 654 General and administration expenses (1 015 500) (2 285 909) (1 452 631) (2 966 562) Rehabilitation obligation (recognised) revised (1 157 682) (1 229 822) 15 718 (480 152) Loss before net finance costs (778 652) (2 180 873) (2 785 135) (6 340 427) Finance income 85 579 253 841 159 894 229 087 Finance costs (197 448) (397 657) (186 301) (377 285) Loss after net finance costs (890 521) (2 324 689) (2 811 542) (6 488 625) Share of profit (loss) from equity accounted investment 24 214 55 750 (8 074) 18 666 Loss before taxation (866 307) (2 268 939) (2 819 616) (6 469 959) Taxation (577 512) (341 127) 408 533 1 024 970 Loss for the period (1 443 819) (2 610 066) (2 411 083) (5 444 989) Other comprehensive income (loss): Exchange differences on translating foreign operations 118 355 (5 520 926) (1 756 264) (7 098 719) Total comprehensive loss for the period (1 325 464) (8 130 992) (4 167 347)(12 543 708) Loss attributable to: Owners of the Group (1 376 074) (2 553 782) (2 017 211) (4 141 894) Non-controlling interest (67 745) (56 284) (393 872) (1 303 095) Loss for the period (1 443 819) (2 610 066) (2 411 083) (5 444 989) Total comprehensive loss attributable to: Owners of the Group (1 257 141) (8 295 246) (3 819 655)(11 376 265) Non-controlling interest (68 323) 164 254 (347 692) (1 167 443) Total comprehensive loss for the period (1 325 464) (8 130 992) (4 167 347)(12 543 708) Loss per share Per share information Basic and diluted loss per share (cents) (2.81) (5.22) (4.17) (8.58) Consolidated Statements of Changes in Equity Amounts in Canadian Dollars Share capital Foreign Share- currency based translation payment reserve reserve Balance at 1 March 2012 145 632 846 (10 451 664) 7 605 893 Loss for the year - - - Other comprehensive loss - (8 966 061) - Total comprehensive loss for the year - (8 966 061) - Share-based payment transactions - - 558 411 Debt conversion, net of issue costs at $0.48 per share 218 707 - - Acquisition of non- controlling interest 890 774 (621 342) - Payment on conversion of mineral right 119 930 - - Total changes 1 229 411 (9 587 403) 558 411 Balance at 28 February 2013 146 862 257 (20 039 067) 8 164 304 Total comprehensive loss for the period Loss for the period - - - Other comprehensive loss - (5 741 464) - Total comprehensive loss for the period - (5 741 464) - Share-based payment transactions - - 130 332 Disposal of subsidiary - - - Share issue costs (5 450) - - Total changes (5 450) (5 741 464) 130 332 Balance at 31 August 2013 146 856 807 (25 780 531) 8 294 636 Amounts in Canadian Dollars Total Retained Total net loss equity reserves attributable to equity holders of the Group Balance at 1 March 2012 (2 845 771) (65 620 276) 77 166 799 Loss for the year - (10 900 533) (10 900 533) Other comprehensive loss (8 966 061) - (8 966 061) Total comprehensive loss for the year (8 966 061) (10 900 533) (19 866 594) Share-based payment transactions 558 411 - 558 411 Debt conversion, net of issue costs at $0.48 per share - - 218 707 Acquisition of non-controlling interest (621 342) (957 513) (688 081) Payment on conversion of mineral right - - 119 930 Total changes (9 028 992) (11 858 046) (19 657 627) Balance at 28 February 2013 (11 874 763) (77 478 322) 57 509 172 Total comprehensive loss for the period Loss for the period - (2 553 782) (2 553 782) Other comprehensive loss (5 741 464) - (5 741 464) Total comprehensive loss for the period (5 741 464) (2 553 782) (8 295 246) Share-based payment transactions 130 332 - 130 332 Disposal of subsidiary - 320 635 320 635 Share issue costs - - (5 450) Total changes (5 611 132) (2 233 147) (7 849 729) Balance at 31 August 2013 (17 485 895) (79 711 469) 49 659 443 Amounts in Canadian Dollars Non- Total controlling equity interest Balance at 1 March 2012 (712 429) 76 454 370 Loss for the year (2 875 845) (13 776 378) Other comprehensive loss 232 890 (8 733 171) Total comprehensive loss for the year (2 642 955) (22 509 549) Share-based payment transactions - 558 411 Debt conversion, net of issue costs at $0.48 per share - 218 707 Acquisition of non-controlling interest 1 217 912 529 831 Payment on conversion of mineral right - 119 930 Total changes (1 425 043) (21 082 670) Balance at 28 February 2013 (2 137 472) 55 371 700 Total comprehensive loss for the period Loss for the period (56 284) (2 610 066) Other comprehensive loss 220 538 (5 520 926) Total comprehensive loss for the period 164 254 (8 130 992) Share-based payment transactions - 130 332 Disposal of subsidiary - 320 635 Share issue costs - (5 450) Total changes 164 254 (7 685 475) Balance at 31 August 2013 (1 973 218) 47 686 225 Consolidated Statements of Cash Flows 3 months 6 months 3 months 6 months Amounts ended ended ended ended in 31 August 31 August 31 August 31 August Canadian Dollars 2013 2013 2012 2012 Cash flows from operating activities Cash receipts from customers 10 573 321 18 036 084 8 688 024 16 699 556 Cash paid to suppliers and employees (6 976 209)(17 425 368) (8 065 209)(17 706 619) Cash generated from (used in) operations 3 597 112 610 716 622 815 (1 007 063) Finance income 85 579 253 841 159 894 229 087 Finance costs (51 797) (347 034) (314 906) (377 285) Tax paid - - 1 278 (40 623) Net cash inflow (outflow) from operating activities 3 630 894 517 523 469 081 (1 195 884) Cash flows from investing activities Purchase of property, plant and equipment (3 423 805) (5 044 116) (1 631 687) (2 430 055) Proceeds from sale of property, plant and equipment - 41 389 716 319 760 804 Purchase of mineral property interests (6 706) (6 706) - - Net asset disposal - 2 556 318 2 598 2 598 Net movement in related party loans 10 862 (56 348) (276 285) (178 024) Net movement in other financial assets (167 813) (323 707) (157 140) (1 364 479) Increase in rehabilitation deposits (15 892) (31 502) (48 634) - Decrease in rehabilitation deposits - - - 926 709 Net cash outflow from investing activities (3 603 354) (2 864 672) (1 394 829) (2 282 447) Cash flows from financing activities Share issue costs - (5 451) - (5 293) Repayment of convertible loan (4 810) (4 810) (5 546) (5 546) Net movement in capital lease obligations (79 236) (126 692) (78 596) (161 908) Net cash outflow from financing activities (84 046) (136 953) (84 142) (172 747) Net movement in cash and cash equivalents for the period (56 506) (2 484 102)(1 009 890) (3 651 078) Cash and cash equivalents at the beginning of the period 303 109 2 730 705 7 270 673 9 911 861 Total net cash and cash equivalents at end of the period 246 603 246 603 6 260 783 6 260 783 Loss per share 3 months 6 months 3 months 6 months Amounts ended ended ended ended in 31 August 31 August 31 August 31 August Canadian Dollars 2013 2013 2012 2012 Basic and diluted loss per share Basic loss per share Cents per share (2.81) (5.22) (4.17) (8.58) Basic loss per share was calculated based on a weighted average number of ordinary shares of 48 942 745 for the 3 months ended 31 August 2013 (3 months ended 31 August 2012: 48 409 413) and 48 887 673 for the 6 months ended 31 August 2013 (6 months ended 31 August 2012: 48 290 210). Reconciliation of loss for the period to basic loss Loss for the period (1 443 819) (2 610 066)(2 411 083) (5 444 989) Adjusted for: Loss attributable to non-controlling interest 67 745 56 284 393 872 1 303 095 Basic loss attributable to owners of the Group (1 376 074) (2 553 782)(2 017 211) (4 141 894) Diluted loss per share is equal to loss per share because there are no dilutive potential ordinary shares in issue. At 31 August 2013 and 31 August 2012 the impact of share-based payment options were excluded from the weighted average number of shares as the effect would have been anti-dilutive. Basic and diluted headline loss per share Headline loss per share (cents) (2.81) (5.26) (4.86) (9.36) Reconciliation between basic loss and headline loss Basic loss attributable to owners of the Group (1 376 074)(2 553 782) (2 017 211)(4 141 894) Adjusted for: Loss (profit) on sale of property, plant and equipment 535 (16 389) (335 464) (379 949) Headline loss attributable to owners of the Group (1 375 539) (2 570 171)(2 352 675) (4 521 843) Johannesburg 11 October 2013 Sponsor: Sasfin Capital (a division of Sasfin Bank Limited) Date: 11/10/2013 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. 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