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     Latest News: Rockwell Diamonds Inc. ROCKWELL [RDI]
     Mon, 22 Sep 2014 Official Announcement [CC] 
    Rockwell reports increased diamond sales
    Rockwell announced its quarterly production and sales update for the three months ended August 31, 2014: All dollar figures stated herein are expressed in Canadian dollars, unless otherwise specified.

    • Achievement of 2.5 million lost time injury free hours ("LTIFH") of operation at Saxendrift (September 18, 2014);
    • Revenues from diamond sales (excluding beneficiation) up 57% to USD13.2 million;
    • Total carat sales were up 58% to 8 864 carats, sold at an average price of USD1 489 per carat (down 2% from a year ago);
    • Inventory of 5 954 carats (including royalty contract miners' inventory of 3 034 carats) carried over into third quarter of fiscal 2015;
    • Successful implementation of earthmoving vehicle ("EMV") renewal plan leads to increased mining efficiencies and volumes.

    The Company's own operations in the Middle Orange River ("MOR"):
    • Total volumes of gravel processed and carat production increased by 54% to 964k m3 and 6% to 3 764 carats respectively;
    • Carat sales grew 43% to 3 810 carats with a 36% increase in value of sales to USD9.0 million; and
    • Two +100 carat diamonds recovered including a 104-carat cape yellow and a 117-carat commercial yellow.

    Company's total properties:
    • Total volumes of gravel processed and carat production increased by 57% and 36% respectively; and
    • Total carat sales increased by 58%.

    At the beginning of the second quarter, Rockwell restructured the management team in the MOR operations to address certain areas of underperformance at the mines. This led to improved overall results for the period under review.

    The changes were as follows included:
    • Frans Bezuidenhout took on the role of General Manager: MOR, from his previous position as Senior Production Manager at Niewejaarskraal;
    • George Stevens was promoted from Geological Manager to Senior Production Manager at Saxendrift; and
    • Mulalo Ndwammbi, previously Mining Manager at Saxendrift Hill Complex ("SHC") was promoted to Production Manager: SHC, becoming Rockwell’s first black woman production manager.

    Saxendrift Operations:
    • A capital investment neutral EMV renewal plan was implemented at Saxendrift at the end of June 2014, which included six 100-ton trucks, three front end loaders, two dozers and other associated vehicles. The plan comprises a two year, fully managed lease and maintenance agreement with Eqstra based on a fixed cost per hour of usage with a guarantee of 85% availability, or five hundred operating hours per month per truck.
    • Quarterly mining volumes increased 8% year on year, reversing the declines consequent to poor EMV availability recorded in the previous three quarters. Saxendrift achieved record volumes of gravel mined in the months of July and August 2014, demonstrating the benefits of the managed fleet strategy.
    • Although quarterly carat production was down 40%, due to mining a lower grade area of the Saxendrift property, the variance is within the expected ranges of long term mine plans and is reflective of the quarterly reporting periods. Mining subsequently reverted to the higher-grade areas at the end of August 2014.
    • In spite reporting a lower total carat production, the quality of recoveries at the mine was high; Saxendrift delivered a 21% increase in average carat values, compensating for the marginal reduction of 4% in carat sales, producing 16% increase revenue from diamond sales (excluding beneficiation).

    Saxendrift Hill Complex:
    • Quarterly volumes of gravel processed were up 38% from the prior year.
    • Processing of recovery tailings negatively impacted the grade, which was down 18%, and size of diamonds.
    • The average carat value declined 56%, as a result of the inclusion of several high value stones in the prior year, as well as the smaller stone recoveries in the second quarter. In spite of the 34% increase in carats sold, the mine reported at 42% decline in sales (excluding beneficiation) largely as a result of lower average values realized.

    • Operations at Niewejaarskraal continue to gain momentum, with a 7.5% increase in volume processed compared to the first quarter of fiscal 2015.
    • The mine recorded a grade of 0.54 carats per 100m3 for the quarter, which is in line with the expected grade for this property.
    • Carat values, which were up 37% over the prior year, are in line with the long-term average MOR diamond values realized.
    • The increases in carat sales and revenue from diamond sales (excluding beneficiation) were about tenfold over the prior year when the mine was newly commissioned, and in production ramp up.
    • Reflecting benefits of increased throughput at Niewejaarskraal, the pace recovery of larger stones has improved, with the largest weighing 62.2 carats for the second quarter.

    Royalty Mining Contractors and Joint Venture
    • The royalty mining contractors operating on the Tirisano property performed well in the second quarter but lower volumes were processed at the joint venture mining arrangement at Kwartelspan. Total volumes of gravel processed and carats produced were up 64% and 66% respectively on the prior year.
    • Carats sales from royalty mining contractors were up 70%, and included the recovery of several high quality stones which underpinned a 30% improvement in average carat values in the second quarter.
    • Total revenue generated by the contractors from diamond sales increased 121%, with Rockwell's royalty income amounting to USD523 000.
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