Overview
Rockwell is focused on the mining and development of alluvial diamond
deposits that yield high value gemstones. During the third fiscal
quarter of 2011, the Company continued to operate three mines, namely
Holpan, Klipdam and Saxendrift, and a bulk sampling evaluation program
on the Klipdam Extension property, which is near to the Klipdam
operation. All of these operations are located in the Northern Cape
Province area of
Rockwell has an excellent pipeline of other alluvial diamond projects, and progressed with assessing the potential of the advanced-stage projects for development. The Company also continues to consider merger and acquisition opportunities in order to expand its mineral resources, and add to its production profile.
Underpinned by the strong recovery in diamond prices, Rockwell reported
quarter-on-quarter revenue growth of 44% to
On a fiscal year-to-date basis, both carat production and prices
received have increased. In the nine months to
During the third quarter of fiscal 2011, Rockwell recovered eight large gemstones from its Holpan, Klipdam and Saxendrift operations, bringing the total number of plus 50-carat stones recovered in its current fiscal year to nineteen. In addition to recovering several high quality white and fancy yellow coloured gemstones, the following notable diamonds were also produced:
-- 83-carat sawable diamond, with a slight yellow tint with a small spot; -- 84-carat industrial quality diamond; -- 63-carat sawable, white diamond with a few spots throughout the stone; -- 50-carat makeable shape, clean D color diamond; and -- 72-carat makeable shape, clean H color diamond.
These stones were sold into the Company's joint venture with Steinmetz Diamond Group. Once manufactured and sold as polished goods, they will provide additional profit share revenue to the Company.
The recovery of the international diamond market gained momentum with prices continuing to trend towards 2008 levels and jewellery retail sales have been higher than expectations of major retailers. These sales will support a reduction in polished inventory and, consequently, could fuel the trade of rough diamonds.
The price recovery of rough diamonds has outpaced polished stones, as a
result of high polished inventory levels; however, polished prices
improved in
Acquisitions
Early in fiscal 2011, Rockwell announced that it had embarked on a
process to purchase 74% of Etruscan Diamonds Limited's ("Etruscan")
well known Blue Gum diamond operation in the Ventersdorp region,
The Blue Gum Project hosts the Tirisano alluvial diamond deposit.
According to an
Completion of the acquisition is subject to the South African mining ministry consent, which is well advanced, securities regulatory approvals (including TSX) and electric power negotiations. The Company is also making excellent progress with the engineering and fabrication of a new, low-cost processing plant, and implementation of a new mine plan. Completion is targeted for early fiscal 2012.
Flawless Diamond Trading House ("Flawless"), which became 20% owned by Rockwell during the first quarter of fiscal 2011, provides a unique marketing and sales platform for the Company's growing diamond production volumes. Flawless is in the process of integrating a diamond cleaning technology - the first of its kind to be implemented commercially - that would enhance the appearance of rough diamonds presented for sale.
Operations Overview
In the three month period ended
-- 8,404 carats (November 30, 2009: 7,963 carats) were produced at the Holpan, Klipdam and Saxendrift operations and the Klipdam Extension bulk sampling project, including contractor recoveries. -- 6,414 carats (November 30, 2009: 9,410 carats) were sold at an average price of US$1,566 per carat (November 30, 2009: US$1,269 per carat). -- Tender sales of US$10.0 million plus US$0.8 million of returns from the beneficiation profit share resulted in diamond revenues of US$10.8 million (November 30, 2009: US$12.9 million). -- An operating profit of $1.8 million (November 30, 2009: $2.5 million) was reported for the period. -- A loss of $1.4 million or $0.003 per share was realized for the period.
In the nine month period ended
-- 20,564 carats (November 30, 2009: 20,646 carats) were sold at an average price of US$1,345 per carat (2009: US$969 per carat). -- Tender sales of US$27.6 million plus US$2.3 million of returns from the beneficiation profit share resulted in diamond revenues of US$29.9 million (November 30, 2009: US$22.7 million). -- An operating profit of $3.7 million (November 30, 2009: operating loss of $2.3 million) was reported for the period. -- A loss of $2.4 million (November 30, 2009: loss of $6.1 million) or $0.005 (November 30, 2009: $0.026) per share was realized for the period. -- Diamond inventories at November 30, 2010 totalled 3,865 carats (2009: 2,800 carats).
At
Production at the three operations steadily increased, reaching
2,765,415 cubic meters(1) (
The Company successfully maintained its focus on reducing unit costs
through operational optimization, achieving average operating cash cost
at the three productive operations of
Additional details on production, sales and revenues for the quarter, as well as comparative results for the first nine months of fiscal 2010 are provided below. For further details, see the Rockwell's complete financial results and Management Discussion and Analysis posted on the website and on the Company's profile at www.sedar.com.
Production and Sales
The following is a comparison of the current quarter (ended
Production and Sales - Nine Month Comparison
The following is a comparison of the first nine months of fiscal 2011
(ended
Mr
Rockwell will host a telephone conference call on
A live and archived audio webcast will also be available at on the
Company's website at www.rockwelldiamonds.com. The conference call will be archived for later playback until midnight
(ET)
No regulatory authority has approved or disapproved the information contained in this news release.
Forward Looking Statements
Except for statements of historical fact, this news release contains certain "forward-looking information" within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements.
Factors that could cause actual results to differ materially from those in forward-looking statements include uncertainties and costs related to exploration and development activities, such as those related to determining whether mineral resources exist on a property; uncertainties related to expected production rates, timing of production and cash and total costs of production and milling; uncertainties related to the ability to obtain necessary licenses, permits, electricity, surface rights and title for development projects; operating and technical difficulties in connection with mining development activities; uncertainties related to the accuracy of our mineral resource estimates and our estimates of future production and future cash and total costs of production and diminishing quantities or grades if mineral resources; uncertainties related to unexpected judicial or regulatory procedures or changes in, and the effects of, the laws, regulations and government policies affecting our mining operations; changes in general economic conditions, the financial markets and the demand and market price for mineral commodities such and diesel fuel, steel, concrete, electricity, and other forms of energy, mining equipment, and fluctuations in exchange rates, particularly with respect to the value of the US dollar, Canadian dollar and South African Rand; changes in accounting policies and methods that we use to report our financial condition, including uncertainties associated with critical accounting assumptions and estimates; environmental issues and liabilities associated with mining and processing; geopolitical uncertainty and political and economic instability in countries in which we operate; and labour strikes, work stoppages, or other interruptions to, or difficulties in, the employment of labour in markets in which we operate our mines, or environmental hazards, industrial accidents or other events or occurrences, including third party interference that interrupt operation of our mines or development projects.
For further information on Rockwell, Investors should review Rockwell's annual Form 20-F filing with the United States Securities and Exchange Commission www.sec.com and the Company's home jurisdiction filings that are available at www.sedar.com.
Information Concerning Estimates of Indicated and Inferred Resources
This news release also uses the terms 'indicated resources' and 'inferred resources'. Rockwell Diamonds Inc advises investors that although these terms are recognized and required by Canadian regulations (under National Instrument 43-101 Standards of Disclosure for Mineral Projects), the U.S. Securities and Exchange Commission does not recognize them. Investors are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted into reserves. In addition, 'inferred resources' have a great amount of uncertainty as to their existence, and economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or pre-feasibility studies, or economic studies except for Preliminary Assessment as defined under 43-101. Investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legally mineable.
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1. For conversion from cubic meters or cubes to metric tonnes, the specific gravity factor for the Holpan, Klipdam, and Klipdam Extension deposits is 1.85 g/cm(3), for the Saxendrift and Wouterspan deposits the factor is 2.1 g/cm(3). For the Blue Gum (Tirisano) deposit the factor is 1.80 g/cm(3). 2. "Other" in the Production and Sales tables below refers to an independent contractor processing gravels and sold with the Company's tender. These carats are excluded from grade calculations.
SOURCE Rockwell Diamonds Inc.