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Rockwell's 3rd quarter results
Rockwell Diamonds Inc.
(A company incorporated in accordance with
the laws of British Columbia, Canada)
(Incorporation number BCO354545)
(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" or "the Group")
13 January 2015
Consolidated statements of financial position
Amounts in Canadian Dollars ('000)
As at As at
30 Nov 28 Feb
2014 2014
Assets
Non-current assets
Mineral property interests 26 622 26 642
Investment in associates
and joint ventures 351 233
Property, plant and equipment 28 748 30 719
Investments and deposits 2 898 5 386
Rehabilitation deposits 3 373 1 701
Total non-current assets 61 992 64 681
Current assets
Inventories 6 146 4 608
Current tax receivable 36 36
Trade and other receivables 7 763 8 687
Cash and cash equivalents 1 337 1 325
Total current assets 15 282 14 656
Total assets 77 274 79 337
Equity and liabilities
Equity
Share capital 147 452 147 073
Reserves (9 942) (10 009)
Retained loss (93 907) (88 096)
Total equity attributable to
the equity holders of the Group 43 603 48 968
Non-controlling interest (1 815) (1 737)
Total equity 41 788 47 231
Liabilities
Non-current liabilities
Loans and borrowings 5 709 3 241
Finance lease obligation 1 404 110
Deferred tax 4 509 5 926
Rehabilitation obligation 6 808 6 459
Total non-current liabilities 18 430 15 736
Current liabilities
Loans and borrowings 1 954 1 954
Finance lease obligation 670 165
Trade and other payables 12 576 11 166
Bank overdraft 1 856 3 085
Total current liabilities 17 056 16 370
Total liabilities 35 486 32 106
Total equity and liabilities 77 274 79 337
Consolidated statements of financial performance
Amounts in Canadian Dollars ('000)
3 months 9 months 3 months 9 months
ended ended ended ended
30 Nov 30 Nov 30 Nov 30 Nov
2014 2014 2013 2013
Sale of diamonds 17 430 41 361 11 222 27 659
Beneficiation income 1 427 9 515 632 3 104
Cash cost of sales (22 092) (48 655) (9 076) (24 378)
Operating (loss)
before amortization
and depreciation (3 235) 2 221 2 778 6 385
Amortization of
mineral property
interests (225) (631) (238) (619)
Depreciation of
property, plant
and equipment (1 357) (4 334) (1 262) (3 432)
Rehabilitation
obligation recognized (99) (340) (331) (1 561)
Gross (loss) profit (4 916) (3 084) 947 773
Other income 438 563 209 488
General and admini-
stration expenses (1 505) (4 349) (1 320) (3 286)
Loss before net
finance costs (5 983) (6 870) (164) (2 025)
Finance income 8 274 161 415
Finance costs (223) (610) (199) (597)
Loss after net
finance costs (6 198) (7 206) (202) (2 207)
Share of (loss)profit
from equity accounted
investment (173) (88) 27 83
Loss before taxation (6 371) (7 294) (175) (2 124)
Taxation 1 621 1 407 (205) (546)
Loss for the period (4 750) (5 887) (380) (2 670)
Loss attributable to:
Owners of the parent (4 825) (5 811) (358) (2 592)
Non-controlling
interest 75 (76) (22) (78)
(4 750) (5 887) (380) (2 670)
Consolidated statements of comprehensive income
Amounts in Canadian Dollars ('000)
3 months 9 months 3 months 9 months
ended ended ended ended
30 Nov 30 Nov 30 Nov 30 Nov
2014 2014 2013 2013
Loss for the period (4 750) (5 887) (380) (2 670)
Other comprehensive
income net of taxation
Items that are or may
be reclassified to
profit or loss
Exchange differences
on translating foreign
operations 514 (16) 441 (5 080)
Other comprehensive
income for the period
net of taxation 514 (16) 441 (5 080)
Total comprehensive
income for the period (4 236) (5 903) 61 (7 750)
Total comprehensive
income attributable to:
Owners of the Group (4 286) (5 825) 106 (7 869)
Non-controlling
interest 50 (78) (45) 119
Total comprehensive
income for the period (4 236) (5 903) 61 (7 750)
Loss per share
Per share information
Basic and diluted loss
per share (cents) (8.96) (10.80) (0.72) (5.29)
Consolidated statements of changes in equity
Amounts in Canadian Dollars ('000)
Share Foreign Share- Total
capital currency based net
trans- payment reserves
lation reserve**
reserve*
Balance at 01 Mar 2013 146 862 (20 039) 8 164 (11 875)
Total comprehensive
income for the period
Loss for the period - - - -
Other comprehensive
income - (5 277) - (5 277)
Total comprehensive
income for the period - (5 277) - (5 277)
Share-based payment
transactions - - 444 444
Share issue costs (5) - - -
Total changes (5) (5 277) 444 (4 833)
Balance at 30 Nov 2013 146 857 (25 316) 8 608 (16 708)
Balance at 1 Mar 2014 147 073 (18 799) 8 790 (10 009)
Total comprehensive
income for the period
Loss for the period - - - -
Other comprehensive
income - (14) - (14)
Total comprehensive
income for the period - (14) - (14)
Share-based payment
transactions - - 97 97
Share options exercised 33 - (16) (16)
Shares issued to employees 347 - - -
Share issue costs (1) - - -
Total changes 379 (14) 81 51
Balance at 30 Nov 2014 147 452 (18 813) 8 871 (9 942)
Retained Total Non- Total
loss equity control- equity
attri- ling
butable interest
to equity
holders of
the Group
Balance at 01 Mar 201 3 (77 478) 57 509 (2 137) 55 372
Total comprehensive
income for the period
Loss for the period (2 592) (2 592) (78) (2 670)
Other comprehensive
income - (5 277) 197 (5 080)
Total comprehensive
income for the period (2 592) (7 869) 119 (7 750)
Share-based payment
transactions - 444 - 444
Share issue costs - (5) - (5)
Total changes (2 592) (7 430) 119 (7 311)
Balance at 30 Nov 2013 (80 070) 50 079 (2 018) 48 061
Balance at 1 Mar 2014 (88 096) 48 968 (1 737) 47 231
Total comprehensive
income for the period
Loss for the period (5 811) (5 811) (76) (5 887)
Other comprehensive
income - (14) (2) (16)
Total comprehensive
income for the period (5 811) (5 825) (78) (5 903)
Share-based payment
transactions - 97 - 97
Share options exercised - 17 - 17
Shares issued to employees - 347 - 347
Share issue costs - (1) - (1)
Total changes (5 811) (5 381) (78) (5 459)
Balance at 30 Nov 2014 (93 907) 43 603 (1 815) 41 788
* Currency translation differences arising on the conversion of the
net investment in foreign operations from the functional currency to
the Company’s presentation currency are accumulated in the foreign
currency translation reserve.
** Equity settled share-based payment transactions are accumulated in
the share-based payment reserve.
Consolidated statements of cash flows
Amounts in Canadian Dollars ('000)
3 months 9 months 3 months 9 months
ended ended ended ended
30 Nov 30 Nov 30 Nov 30 Nov
2014 2014 2013 2013
Cash flows from
operating activities
Cash receipts from
customers 16 888 52 083 11 800 29 836
Cash paid to
suppliers and
employees (19 592) (52 198) (13 518) (30 943)
Cash utilised by
operations (2 704) (115) (1 703) (1 150)
Finance income 8 274 161 415
Finance costs (576) (576) (230) (577)
Tax paid 1 1 - -
Net cash outflow
from operating
activities (3 271) (416) (1 772) (1 312)
Cash flows from
investing activities
Purchase of property,
plant and equipment (1 411) (2 964) (437) (5 480)
Proceeds from sale
of property, plant
and equipment 17 355 - 41
Purchase of mineral
property interests 5 (578) (2) (9)
Proceeds from sale
of subsidiary - - - 2 556
Investment in joint
venture (104) (207) - -
Net movement in other
financial assets 3 192 2 692 (170) (493)
Increase in rehabili-
tation deposits (2 159) (1 672) (16) (48)
Net cash outflow from
investing activities (460) (2 374) (625) (3 433)
Cash flows from
financing activities
Proceeds on share issue 16 16 - -
Share issue costs (1) (1) - (5)
Proceeds from
loans and borrowings 2 256 2 255 - -
Repayment of loans
and borrowings - (4) (2) (7)
Proceeds from
(repayment of) finance
lease obligations 1 904 1 765 (95) (221)
Net cash inflow/
(outflow) from
financing activities 4 175 4 031 (97) (233)
Net movement in cash
and cash equivalents
for the period 444 1 241 (2 494) (4 978)
Cash and cash equiva-
lents at the beginning
of the period (963) (1 760) 247 2 731
Total net cash and
cash equivalents at
end of the period (519) (519) (2 247) (2 247)
Loss per share
3 months 9 months 3 months 9 months
ended ended ended ended
30 Nov 30 Nov 30 Nov 30 Nov
2014 2014 2013 2013
Basic and diluted
loss per share
Basic loss per
share
Cents per share (8.96) (10.80) (0.72) (5.29)
Basic loss per share was calculated based on a weighted average
number of ordinary shares of 54 427 244 for the 3 months ended
30 November 2014 (3 months ended 30 November 2013: 49 595 681) and
53 819 099 for the 9 months ended 30 November 2014 (9 months ended
30 November 2013: 48 974 752).
Reconciliation of
loss for the period
to basic loss
Loss for the period (4 750) (5 887) (380) (2 670)
Adjusted for:
Loss attributable
to non-controlling
interest (75) 76 22 78
Basic loss attribu-
table to owners of
the Group (4 825) (5 811) (358) (2 592)
Diluted loss per share is equal to loss per share because there are
no dilutive potential ordinary shares in issue.
Basic and diluted
headline loss per
share
Headline loss per
share (cents) (8.87) (10.32) (0.72) (5.18)
Reconciliation between
basic loss and headline
loss
Basic loss attribu-
table to owners of
the Group (4 825) (5 811) (358) (2 592)
Adjusted for:
Loss (profit) on
sale of property,
plant and equipment - 258 - (16)
Impairments - - - 71
Headline loss attribu-
table to owners of
the Group (4 825) (5 553) (358) (2 537)
The basic and diluted headline earnings (loss) per share disclosure
is provided based on the listing requirements of the Johannesburg
Stock Exchange (Group’s secondary listing). The disclosure of basic
and diluted headline earnings (loss) per share is provided in
accordance with Circular 2/2013 as issued by the South African
Institute of Chartered Accountants. Headline earnings (loss)
represents the basic earnings (loss) attributable to the owners of
the Group excluding certain remeasurements.
At periods end the impact of share-based payment options were
excluded from the weighted average number of shares, for the
purpose of the diluted headlines earnings (loss) per share calculation,
as the effect would have been anti-dilutive.
Subsequent events
On January 6, 2015 Rockwell announced that it had entered into a
conditional agreement diamond properties and associated plant and
equipment from Bondeo 140 CC and total consideration of $28.5 million
(ZAR 284.2 million) (“the Transaction”), of which $12.0 million
(ZAR120 million)is in respect of the mineral rights and processing
capabilities and the balance ($16.5 million (ZAR 164 million)) in
respect of earthmoving fleet and associated equipment.
The transaction is subject to conditions precedent, including
regulatory approvals and conclusion of financing on or before March 31,
2015. $12.0 million (ZAR120 million) is payable to the Sellers on the
Closing Date, which will be in Q2 2015, with the balance of the
consideration expected to be financed from external sources.
Rockwell has engaged advisors (including Dundee Capital Markets) to
assist in the conclusion of the transaction.
The effect of this transaction has not been accounted for in these
financial statements.
Saxendrift Hill Complex (“SHC”) was designed for an 18-month mine life,
which expired at the end of 2014, and therefore a decision has been taken
to close the SHC plant on 13 January 2015. In order to optimize the
remaining resource, Rockwell has decided that this will be processed
through the Saxendrift plant. The SHC EMV fleet will be moved to
Niewejaarskraal to ramp up production and the processing plant will be
reallocated in due course.
Segmental information
The Group has three reportable operating segments, as described
below, which are the Group’s operating divisions. These divisions
offer different diamond product characteristics, qualities,
geological characteristics, processes and services, and are managed
separately because they require different technology and profit or
cost strategies. For each of the divisions the Group executive
committee (chief operating decision making body) reviews internally
managed reports on at least a monthly basis.
The following describes the operations in each of the Group’s
reportable segments:
- Northern Cape operation is associated with the mining of Paleo
Channels and Rooikoppie gravels and the recovery of high value and
larger carat size diamonds;
- North West operation is associated with the mining of potholes and
the recovery of lower value and smaller carat size diamonds; and
- Corporate represents the corporate management and administrative
function of the Group.
The reconciliation column represents the inter group transactions
eliminated on consolidation. All reportable segments are located in
the same geographical jurisdiction. Information regarding the results
of each of the reportable segments is included below.
For the 9 months ended 30 November 2014
Northern North Corporate Reconciling Total
Cape West
Total assets 54 090 16 119 72 248 (65 183) 79 274
Total liabilities 73 064 22 798 4 807 (65 183) 35 486
External revenue 37 273 13 603 - - 50 876
Loss for the
period (4 410) (318) (1 159) - (5 887)
For the 9 months ended 30 November 2013
Northern North Corporate Reconciling Total
Cape West
Total assets 56 216 13 021 66 119 (56 336) 79 020
Total liabilities 63 717 21 119 2 379 (56 336) 30 879
External revenue 25 950 4 813 - - 30 763
Loss for the
period (1 961) (252) (457) - (2 670)
Corporate information
Registered office – South Africa: Level 1, Wilds View, Isle of Houghton
Corner Carse O’Gowrie and Boundary Roads, Houghton Estate, Johannesburg 2198
PO Box 3011, Houghton 2041, South Africa
Telephone: +27 11 484 0830 Facsimile: +27 86 262 2838
Corporate address – Canada: 1020–800 West Pender Street, Vancouver,
British Columbia, Canada V6C 2V6
Telephone: +1 604 684 636 Facsimile: +1 604 684 8092
Toll Free: 1 800 667 2114
Corporate advisor: Allan Hochreiter Proprietary Limited
4 Fricker Road, Illovo, Sandton 2196, South Africa
JSE sponsor: PSG Capital
First Floor, Building 8 Inanda Greens Business Park, 54 Wierda Road West
Wierda Valley, Sandton 2196
International broker: Northland Capital Partners Limited
60 Gresham Street, London, EC2V 7BB United Kingdom
Auditors: KPMG Inc Chartered Accountants
KPMG Crescent, 85 Empire Road, Parktown 2193, South Africa
Transfer agents - South Africa: Computershare Investor Services Proprietary Limited
(Registration number 2004/0036471/07)
Ground Floor, 70 Marshall Street Johannesburg 2001, South Africa
Transfer agents - Canada: Computershare Investor Services Inc.
3rd Floor, 510 Burrard Street, Vancouver, British Columbia, Canada V6C 3B9
Lawyers - South Africa: Brink Falcon Hume Inc Attorneys
Second Floor, 8 Melville Road, Illovo, Sandton 2196, South Africa
Lawyers - Canada: Mc Millan LLP
Royal Centre 1055 West Georgia Street, Suite 1500 Vancouver,
British Columbia, Canada V6E 4N7
Date: 14/01/2015 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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