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Rockwell Achieves Higher Prices for Third Quarter Diamond Sales on the Back of Better Quality Stones from Saxendrift

VANCOUVER, British Columbia, January 2, 2013 /PRNewswire/ --

Rockwell Diamonds Inc. ("Rockwell" or the "Company") (TSX: RDI; JSE: RDI;) today announced a 23% improved revenue from diamond sales, before any sales from beneficiation, for the third quarter fiscal 2013 compared to the same period last year.

Total proceeds of US$7.4 million were generated compared to US$6.0 million for the same period a year ago and US$ 6.8 million for the second quarter. A total of 4,043 carats were sold at average price of US$1,821 per carat; and although the number of carats sold was 25% lower, the sale of several high quality stones underpinned the 64% increase in the average price per carat over a year ago.

Diamond sales and revenue for the Company's operational mines for the quarter ended November 30, 2012 is as follows:

                                                                 Price per carat
                           Carats            Revenue (US$)            (US$)
                      Q3 2013  Q3 2012     Q3 2013    Q3 2012   Q3 2013   Q3 2012
    Saxendrift +
    Extension          1,647*    1,761   2,912,196  3,332,902     1,768     1,892
    Saxendrift Bulk
    X-ray                 284        -   3,039,812          -    10,704         -
    Tirisano              214    1,625      74,383  1,272,214       348       783
    Klipdam             1,490    1,990     982,957  1,356,388       660       681
    Other**               408        -     352,055          -       863         -
    Total sales         4,043    5,376   7,361,403  5,961,504     1,821     1,109

* Comprising 566 carats from Saxendrift and 1,081 carats from Saxendrift Extension Project
** Other refers to gravel processed by independent contractors and sold through the Group's tender. These carats are excluded from grade calculations.

The salient features of the third quarter diamond sales are as follows:

  • Carats sold from the Saxendrift Complex, comprising the Saxendrift Mine, the Saxendrift Extension and the Bulk X-ray plant increased by 10% to 1,931 carats at an average price of US$3,082 per carat. The average carat value of US$1,768 for Saxendrift was down 7% on the same period last year, largely, because of the third quarter product mix. This price drop compared well to the 15% decline in the global market price for rough diamond prices in the +2 carat category that comprises most of the mine's production.
  • Sales of diamonds recovered from the Bulk X-ray plant, also at Saxendrift, generated total proceeds of $3.0 million from the sale of 284 carats, including a 145-carat rough diamond whose sale increased the average price per carat from the plant to US$10,704.
  • Diamond sales from Tirisano totaled 214 carats; mining operations of Tirisano were placed on care and maintenance in the first week of December 2012, due primarily to persistent industrial relations issues.
  • Carats sold from Klipdam declined 25% for the quarter to 1,490 carats while the average value declined only marginally to US$660 per carat. In line with expectations, the grade was down 25% quarter on quarter as mining migrated out of the high-grade portion of the channel.

Notable Stones

The Company continued to produce large stones at all its operations: 51 stones exceeding 10 carats were recovered during the third quarter:

                         Number of +10
                         carat stones        Number/Description of +50 carat stones
    Saxendrift +                       5 stones including a 63.21-carat fancy yellow, 
    Saxendrift Extension      17       sawable, clean and a 77.84-carat makeable shape; 
                                       commercial color and clean rough

    Saxendrift Bulk X-ray      3       3 stones including a 145.51-carat, makeable, gem
                                       color, clean

    Tirisano                   2       -

    Klipdam                   20       One 73.52-carat fancy yellow; sawable, spotted stone

These diamonds were channelled into the Company's beneficiation joint venture with Steinmetz Diamond Group (SDG), which delivers value added future revenues for Rockwell's stones that are larger than 2.8 carats, once they have been polished and sold by SDG. Rockwell now has over 5,500 carats in the beneficiation pipeline.

"The 23% year-on-year increase in diamond sales for the third quarter is a step in the right direction, reflecting improved operational efficiency and enhanced by several rare and high quality stones that were recovered. In particular, our operations in the Middle Orange, which are the engine of Rockwell's future growth, produced a number of diamonds exceeding 50 carats in size; there was a 64% increase in average price over a year ago to US$1,821 per carat, in part because of that. The first cash flows from our royalty mining contracts were also realized," said Rockwell President and CEO James Campbell.

Commenting the diamond market, Campbell said: "Following weakness during the first part of the year, the diamond market started the third quarter on a cautious note. However, Rockwell experienced high level of interest at final tenders for the year, underpinning a willingness to pay slightly higher prices for our product. We are optimistic for next year, although the momentum of the market will be largely dependent on strong Christmas sales and further restocking of inventories. With an inventory of 2,704 carats carried forward into the fourth quarter, we are well placed to take advantage of any possible restocking trend."

About Rockwell Diamonds:

Rockwell is engaged in the business of operating and developing alluvial diamond deposits, with a goal to become a mid-tier diamond production company. The Company has two operational mines, which it is progressively optimizing, as well as a third mine which will come into production in the first quarter of 2013. Rockwell also has two development projects and a pipeline of earlier stage properties with future development potential. The operations are based on high throughput processing capability and Saxendrift, the flagship mine has among the lowest unit costs in the industry, as a result of implementing fit for purpose technologies.

The Company is known for producing large, high quality gem stone diamonds comprising a major portion of its diamond recoveries and has a beneficiation joint venture that enables it to participate in the profits on the sale of the polished diamonds.

Rockwell also evaluates merger and acquisition opportunities which have the potential to expand its mineral resources and production profile and would provide accretive value to the Company.

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 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

For further information on Rockwell and its operations in South Africa, please contact

James Campbell

Stéphanie Leclercq
Investor Relations


SOURCE Rockwell Diamonds Inc.

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