VANCOUVER, Feb. 20, 2017 /CNW/ - Rockwell Diamonds Inc.
("Rockwell" or the "Company") (TSX:RDI; JSE:RDI) announces
that it has concluded the sale transaction entered into with
Nelesco 318 Proprietary Limited ("Nelesco") for certain assets, the
assumption of ZAR70M (CAD
$7.0M) in rehabilitation liabilities,
the transfer of 100 employees and a cash consideration of
ZAR45M (CAD $4.5M) as announced in December 2016. The first of three payments,
ZAR20M (CAD $2.0M), was settled after the fulfillment of
certain suspensive conditions, as agreed. The second payment
tranche is ZAR15M (CAD $1.5M) and is due on completion of the
registration of the Saxendrift farm in the name of Nelesco, and the
balance of ZAR10M (CAD $1.0M) upon approval of the Section 11 transfer
of the mineral properties to the name of Nelesco as well as the
consent of the Takeover Regulation Panel of South Africa. In the press release of
December 22, 2016 the expected
impairment of book value was CAD$1,25M which is now restated as CAD$ 8,55M on completion of the transaction.
Nelesco has in the meanwhile completed site establishment and
commenced its mining operations. Until the Section 11 transfer is
received, all operations will be on a contract mining basis
with a royalty payable to the Company of 2.5% of revenue from
diamonds recovered from properties covered by the transaction.
Nelesco will be responsible for any related rehabilitation
liabilities.
'As regards our repositioning plan we are not in the home
stretch yet, says the CEO Tjaart
Willemse but we are on the move and gaining traction towards
realizing the "new Rockwell" goals. Not only have we reduced our
liabilities and earned some much needed cash, but we have recovered
our operations and regained focus. We have a clear strategy, which
is to get our Wouterspan Mine up to full production and to see
first production from our new Stofdraai Mine by July. We are also
in discussion with an interested party to conduct bulk sampling at
the Daniels Alluvials project with a view on developing the site as
a Joint Venture. We have a focused management team and the recent
appointment of a Company Secretary will provide needed support for
our corporate affairs.
We still have to overcome some remaining challenges, mainly
the pending liquidation application lodged by our erstwhile mining
contractor and the fact that we are behind on revenue due to
inefficiencies in the half completed plant. Completion of the final
stage of the treatment plant in March will see overall improved
processing efficiencies and the ability to generate revenue
sustainably.
I am positive about the future and with the continued support
from our shareholders and employees we can "make the grade" and see
the new Rockwell deliver.'
About Rockwell Diamonds:
Rockwell is engaged in the business of operating and developing
alluvial diamond deposits. The Company also evaluates consolidation
opportunities that have the potential to expand its mineral
resources and production profile and provide accretive value to the
Company.
Rockwell is known for producing large, high quality gemstones
comprising a major portion of its diamond recoveries. This is
enhanced through a beneficiation joint venture that enables
Rockwell to participate in the profits on the sale of the polished
and certain re-traded diamonds, which are not beneficiated.
Rockwell has set a strategic goal to become a mid-tier diamond
production company. In pursuit of this goal the Company has
embarked on a strategy to grow its Middle Orange River ("MOR")
operational base and minimise production and recovery volatility by
setting a medium term target to process 500,000m3 of
gravels per month from its MOR operations.
Rockwell's common shares trade on the Toronto Stock Exchange and
the JSE Limited under the symbol "RDI".
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 the transaction and the ability of each party to
satisfy the conditions precedent in a timely manner or at all,
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 of 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 as 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 home jurisdiction filings that are available at
www.sedar.com.
SOURCE Rockwell Diamonds Inc.