|
|
Rockwell - operational turnaround
Salient features
Strategy - Immediate focus is being placed on:
- implementation of the new contract for outsourced mining services and sale of the company’s earthmoving vehicle (“EMV”) fleet, and transfer of two thirds of the company’s staff. This contract is structured to externalize risk from variance in mining volumes and equipment availability;
- commissioning of the third and fourth line of the Wouterspan (“WPC”) wet plant during October 2016. The first two lines are completing commissioning this month;
- review of current mining plan at Remhoogte (“RHC”) to reflect a reduced Rooikoppie resource and less economic Palaeo gravels;
- shut-down of Saxendrift during September 2016;
- exploration drilling and bulk sampling in the vicinity of WPC;
- develop a resource development strategy for MOR to facilitate good business decisions for future production expansion or replacement;
- assessing potential kimberlite acquisitions to increase stability in monthly production and cash flow.
This focus is the result of a detailed board review and intervention in late August due to the performance of RHC and the schedule and cost variances at WPC. The result of the review included a change in certain roles and continued close monitoring by the board of operations and project performance on a weekly basis.
- Volumes - were down 4% on Q1 2017 and 8% on Q2 2016, due to the planned scaling down of operations at Saxendrift, which was partly compensated by a 10% increase in volumes processed at RHC.
- Grades - MOR grades were down 7% on Q1 2017 and 8% on Q2 2016, owing to diminished recoveries from the middlings material at Saxendrift (which was down 13%) and reduced grades at RHC (down 14%).
- Carat sales – 4,849 carats, stable on Q1 2017 and down 9% on Q2 2016.
- Value of sales – decreased 17% from Q1 2017 and 21% from Q2 2016, to USD7.6 million (excluding beneficiation). Total sales (including royalty contractors’ production but excluding beneficiation) were also down by 14% on Q1 2017 and 16% on Q2 2017.
- Average price per carat – decline by 16% on Q1 2017 to USD1 560.
- Notable recoveries – thirty-three +20-carat stones were recovered at RHC (22), Saxendrift (10) and WPC (1), with two stones over 100-cts: 157.99ct and 129.65ct, both from RHC.
- Rough diamond inventory - 700 carats were carried over into the third quarter of fiscal 2017 (including royalty contract goods).
- Safety - at August 31, 2016, the company had achieved 174,558 lost time injury free hours (“LTIFH”) at its MOR operations.
Material developments
CML Agreement
A five-year mining agreement has been concluded with C-Rock Mining (Proprietary) Limited (“CML”) for the provision of contract mining services at Rockwell’s Wouterspan mine with a similar agreement to follow for Remhoogte. This is structured to mitigate the volume and availability risks associated with the Company’s earthmoving fleet and its uneven operating performance to date. The contract provides for all mining and associated rehabilitation activities at a fixed fee per unit material delivered at the plant, with adjustments and where necessary termination for underperformance of the contractor or volume reductions implemented by the company for business reasons.
Exploration update
Rockwell has been granted a prospecting right over the Daniel alluvial deposit, a diamondiferous fluvial- alluvial gravel deposit associated with the adjacent Finsch diamond mine in the Northern Cape Province. Limited modelling based on percussion drilling by the previous operator has identified extensive diamondiferous gravels within the palaeo-channel structure. Further work by the company is still required to assess economic potential.
Saxendrift Mine
Rockwell’s operations at Saxendrift have been suspended as anticipated following recent economic performance. Saxendrift has been the mainstay of Rockwell’s production since its acquisition from Trans Hex. Commercial options on how to deal with this asset consisting of plant and remaining resource are currently being evaluated, royalty miners and relocation of fixed infrastructure being some of these.
|
|
Click here for original article
|
| |
| |
| Click here for full news archive for this company |
|
| Closing price data source: JSE Ltd. All other statistics calculated by ProfileData. |
| |
|
|
