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     Latest News: Rockwell Diamonds Inc. ROCKWELL [RDI]
     Thu, 25 Jun 2015 Official Announcement [CL] 
    Rockwell -- Production & sales update
    Rockwell announced its quarterly production and sales update for the three months ended May 31, 2015:

    Currency values are presented in Canadian dollars, unless otherwise indicated.

    Salient features
    • The acquisition of Remhoogte/Holsloot Project and its associated plant and equipment in MOR has been closed: Rockwell assumed control on May 28, 2015, and grades and volumes have been on plan for the first four weeks of operation.
    • Rockwell’s focus is now on rebuilding the production profile: Rationalization of existing Middle Orange River (“MOR”) operations is underway, redeploying assets to newly acquired operations and expediting work on development projects.
    • Volumes of gravel processed down 15% at Middle Orange River (“MOR”) operations:
    Saxendrift volumes (including Saxendrift Hill Complex (“SHC”) gravels) were up 11%, led by improved plant and mining fleet efficiencies;
    offset by 72% reduction in volumes at Niewejaarskraal (“NJK”) following suspension of operations pending an optimisation study of the resource and processing plant.
    • Saxendrift carat production up 9% from better volumes with lower grade of 0.48 cphm3.
    • MOR carat sales up 3% year-on-year to 3,068 carats. MOR diamond sales (excluding beneficiation) down 13% to USD5.4 million due largely to the mix of goods between the operations, and the timing of sales. Total sales (excluding beneficiation) down 24% to USD6.7 million due to less goods from royalty contractor miners after sale of Tirisano.
    • Average carat price up 9% from Company-owned properties, to USD1,432 per carat.
    • Inventory of 467 carats (including the remaining royalty contract miners’ inventory) carried over into second quarter of fiscal 2016.

    Production review
    • Volumes of gravel processed were down 30% from the prior year, related to the suspension of operations at NJK and closure of SHC, as well as the disposal of Tirisano. This had a corresponding impact on carat production, together with a decline in grade as Tirisano had higher grades at lower per carat average values.
    • Saxendrift: The volume of gravel processed was up 46%, including material sourced from SHC. The renewal of the earthmoving (“EMV”) fleet in 2014 and optimisation of the processing plant delivered sustained benefits allowing processing synergy between the two mining pits into one plant. The reported grade for gravels processed at Saxendrift was 0.48 cphm3 compared to 0.64 cphm3 a year ago but this was up from 0.32 cphm3 in the previous quarter (Q4 F2015). Although carat production declined 17% from the prior year, this was 24% higher quarter on quarter (Q4 F2015 to Q1 F2016), as Saxendrift nears the end of its economic resources, Notable stones recovered during the quarter included 20 stones exceeding 20 carats with four in the 50 to 100 carat range.
    • Niewejaarskraal: Mining activities were suspended at the property in April 2015 in order to allow for work to be undertaken on the geological model and plant optimisation. As a result, volumes of gravel mined and processed declined 74% and 72% respectively. Having suspended operations, a Section 189 restructuring process is under way.
    • Remhoogte/Holsloot (“RH/HS”): First quarter production includes three days’ production from RH/HS, as Rockwell took over operations from May 28, 2015. To ensure the seamless integration and roll out of Rockwell’s MOR operating model, operations commenced at a monthly throughput of 90,000m3, with a plan to increase this after the integration is completed. The first two processing plants have been in successful operation since takeover, with the third coming into production in mid-June 2015. Volumes and grades achieved since taking over the newly acquired properties have been in line with the historic results.
    • Royalty contractor mining: On March 30, 2015, the Company announced the sale of all its interest in Etruscan Diamonds for CAD6.3 million (R60 million), which holds the Tirisano Property, to a consortium of royalty mining contractors who immediately took over the operations. Accordingly volumes of gravel processed were down 56% with a 66% reduction in carat production.

    Sales review
    • Saxendrift: Diamond sales declined 9% to USD4.3 million (including USD1.6 million from SHC gravels processed at Saxendrift). A total of 2,383 carats were sold (including 1,162 carats from SHC gravels), up 3% year on year, and down 21% from the previous quarter (Q4) as a result of a lower opening inventory at the start of Q1, and the sale of two high value +100 carat stones in Q4 F2015. This corresponds to an average value per carat of USD1,815, down 11% year on year.
    • Niewejaarskraal: Diamond sales were down 29% to USD1.1 million for the quarter. The number of carats sold rose 5%, while the average price per carat realized was 33% lower than a year ago at USD1,619 per carat.
    • Royalty mining contractors: As a result of the sale of the Tirisano property at the end of March, Contractors’ sales were down 57% in carat terms while the average price realized per carat was up 16% to USD781. Accordingly, the value of sales halved to USD1.3 million, of which USD156,444 in royalties accrued to Rockwell.

    Rockwell turns to the future after closing the Bondeo 140 cc acquisition.

    Rockwell has engaged Dundee Capital Markets to assist it in connection with its expected equity financing for repayment of the bridging loan.
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    Closing price data source: JSE Ltd. All other statistics calculated by ProfileData.

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