| Tue 29 Jan 2008, 9:41 | | RDI - Rockwell - Update in respect of power outages affecting South Africa |
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RDI
RDI
RDI - Rockwell - Update in respect of power outages affecting South Africa
business and mining operations
ROCKWELL DIAMONDS INCORPORATED
(A company incorporated in accordance with the laws of British Columbia, Canada)
(Incorporation number BCO354545)
(Formerly Rockwell Ventures Inc.)
(South African registration number: 2007/031582/10)
Share code on the JSE Limited: RDI & ISIN: CA77434W1032
Share code on the TSXV RDI & CUSIP Number: 77434W103
Share code on the OTCBB: RDIAF)
("Rockwell" or "Company")
UPDATE IN RESPECT OF POWER OUTAGES AFFECTING SOUTH AFRICA BUSINESS AND MINING
OPERATIONS
January 28, 2008 Vancouver, BC - Rockwell reports on the situation regarding
power outages in South Africa and the impacts on its mining operations.
Recent press and news releases have highlighted the power outages that have
taken place in South Africa since the start of 2008 as a consequence of load
shedding procedures being implemented by ESKOM, the National electricity utility
supplier.
In spite of the power outages affecting business and mining ventures in South
Africa, the Company`s mining operations at Wouterspan, Holpan and Klipdam
continue to operate, although with interruptions, and management has moved
rapidly to conduct an operational review of the situation and implement remedial
actions to ameliorate the consequences of the power outages.
Since the Company resumed operations on January 7, 2008 after the mandated
Christmas-New Year shutdown, mining and earth moving operations have continued
at all Rockwell mine sites, and the following actions have been taken to
ameliorate the consequences of load shedding that has occurred since the start
of the new year:
Diesel generator sets belonging to the Company have been installed at the front-
end gravel screening plants at the Wouterspan, Holpan and Klipdam operations to
ensure that run-of-mine gravel screening to a size range of +2 -30 mm
continues with minimal disruption. This has allowed the mining and screening of
diamond bearing gravel to proceed, with the creation of large stockpiles of
screened gravel at each of the Company`s three operations
* All scheduled and planned maintenance is being conducted during periods of
power outages to reduce overall plant downtime
* The Company is investigating the most effective options to provide back-up
electricity supplies at its mining operations and has identified various
local and foreign suppliers with whom it is in discussions in respect of
price and delivery times to secure and purchase at least two high-voltage
(e.g. 2.8 MVA 11 000 volt) generator sets, which will be installed at its
Wouterspan and Holpan operations, respectively. Once installed, generators
sets of this capacity will be capable of providing enough electrical power
to operate the entire screening, treatment, and final diamond recovery
sections of the metallurgical processing plants at the Wouterspan and
Holpan sites, as well as maintain essential ancillary services (e.g.
maintenance and repair facilities).
* Following the installation of 11 000 volt generators at Wouterspan and
Holpan, the Company will have enough spare generator set capacity to also
ensure that its Klipdam mine has sufficient back-up capacity to operate at
optimal capacity. The Company is also investing the benefits of placing an
order for a third large generator set, which would be utilized as a back-up
power source at new projects developed by the Company.
* As part of this operational review, the Makoenskloof bulk sampling
operation has been placed on care and maintenance, pending detailed
interpretation of the drilling data, 3D modelling, and associated in-depth
analysis of grade, diamond size frequency, sales value and cost parameters
by the Company`s experts and outside diamond consultant. The Makoenskloof
bulk sampling program has, to date, reached a break-even point financially.
The project is, however, sensitive to grade and cost parameters and given
the current uncertainty of ESKOM power supply to this locality, management
has deemed it prudent to place the project on care and maintenance, curtail
unnecessary costs, and focus it efforts on its established mines.
* A back-up generator set has been installed at the Barkly West management
and administration office to ensure that there is minimal impact on normal
business activities of the Company and that computer functions, back-up
servers, and CCTV monitoring systems remain operational.
* The current situation will undoubtedly have an impact on short term costs
and production as detailed below, although an aggressive program to
reduce operating costs and eliminate unnecessary expenses has been
initiated at all the Company`s mines and operations.
Power outages have impacted most directly on the operations of the Company`s
metallurgical treatment plants and final recovery facilities at Wouterspan,
Holpan and Klipdam. During the period January 7 to 25, 2008, power outages
totalling 69 hours, 39 hours, and 39 hours were experienced at Wouterspan,
Holpan and Klipdam, respectively. Following these power outages, lead times are
required to bring each plant back to full operational capacity and,
consequently, the overall downtime due to the outages is increased by a factor
of about 1.5.
The overall impact of power outrages on production and operating costs since
start-up of mining operations on January 7, 2008 are being evaluated for January
2008. Current indications are that the carat production target for the period
January 7 to 31 will be some 30 - 40% below budget.
Longer term cost impacts of running generator sets during power outages are
being investigated in detail, though the actual consequences and costs of this
will also depend on the extent to which load shedding will continue to be
applied by ESKOM. Once an analysis of the impact of the power outages on
January production and costs is established, and an analysis of the consequences
of power generation by generator sets is complete, further information including
costs, delivery dates and installation times will be released to shareholders.
President and CEO John Bristow noted that the power outages affecting South
Africa are of obvious concern to the Company and the Management and Operations
Teams have responded rapidly to ameliorate the impacts of the black-outs. The
Company has set in-place procedures which will help alleviate the consequences
of the current and possible longer term impacts of load shedding on its mining
operations. A risk analysis and response plan has been implemented and
investors will be updated as data and information became available.
The Company`s first tender of 2008, comprising approximately 1900 carats is also
well underway. Initial indications are that demand for large, Rockwell-produced
diamonds, is strong.
For further details on Rockwell Diamonds Inc., please visit the Company`s
website at www.rockwelldiamonds .com or contact Investor Services at (604) 684-
6365 or within North America at 1-800-667-2114.
John Bristow
President and CEO
Johannesburg
29 January 2008
Sponsor
Sasfin Capital
A division of Sasfin Bank Limited
No regulatory authority has approved or disapproved the information contained in
this news release. The TSX Venture Exchange does not accept responsibility for
the adequacy or accuracy of this release.
Forward Looking Statements
This release includes certain statements that may be deemed "forward-looking
statements". Other than statements of historical fact all statements in this
release that address future production, reserve or resource potential,
exploration drilling, exploitation activities and events or developments that
each Company expects are forward-looking statements. 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. There is no certainty of the financing
completing. Factors that could cause actual results to differ materially from
those in forward-looking statements include market prices, exploitation and
exploration successes, changes in and the effect of government policies
regarding mining and natural resource exploration and exploitation, availability
of capital and financing, geopolitical uncertainty and political and economic
instability, and general economic, and market or business conditions. Investors
are cautioned that any such statements are not guarantees of future performance
and that actual results or developments may differ materially from those
projected in the forward-looking statements. For more 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.
Date: 29/01/2008 09:41:10 Produced by the JSE SENS Department.
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