| Wed 16 Apr 2008, 14:30 | | RDI - Rockwell Diamonds Incorporated - Rockwell Ac |
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RDI
RDI
RDI - Rockwell Diamonds Incorporated - Rockwell Acquires Middle Orange River
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")
ROCKWELL ACQUIRES MIDDLE ORANGE RIVER
ALLUVIAL DIAMOND OPERATIONS & PROJECTS FROM THE TRANS HEX GROUP
April 16, 2008, Vancouver, BC - Rockwell Diamonds Inc. ("Rockwell" or the
"Company") (TSX: RDI; JSE: RDI; OTCBB: RDIAF) is pleased to announce details
regarding the completion of the acquisition of the Trans Hex Middle Orange
River Operations and Projects, which are located adjacent to Rockwell`s
Wouterspan mining operation on the Middle Orange River in the Northern Cape
Province of South Africa.
In early 2007, Rockwell and Trans Hex Group Limited ("Trans Hex"), through
its wholly owned subsidiary Trans Hex Operations (Pty) Ltd ("THO"),
announced that the companies had entered into an agreement whereby
Rockwell`s wholly owned South African subsidiary, Rockwell Resources RSA
(Pty) Ltd ("Rockwell RSA"), would acquire two open pit alluvial diamond
mines (Saxendrift and Niewejaarskraal) currently on care and maintenance,
and three alluvial diamond exploration projects (Kwartelspan, Zwemkuil-
Mooidraai, and Remhooget-Holsloot) referred to collectively as the Middle
Orange River Operations ("MORO") from Trans Hex (the "Transaction").
Pursuant to the terms of the Transaction, Trans Hex would transfer all its
relevant mineral rights and associated assets into a new special purpose
vehicle ("Saxendrift SPV") which Rockwell would acquire via Rockwell RSA.
To complete the Transaction, Rockwell will pay Trans Hex approximately
ZAR115.5 million in cash and interest, and assume liabilities for previous
staff retrenchments of approximately ZAR4.7million for a total consideration
of approximately ZAR120.2 million (CDN$15.7 million). Trans Hex has
effectively provided an amount to Rockwell of ZAR7.8 million in
environmental guarantees for previous mining and prospecting liabilities
which have been assumed by Rockwell as part of its plan to re-process and
rehabilitate material from previously mined areas and tailings sites on the
Saxendrift property, and to mine and rehabilitate remaining areas of
undisturbed in-situ alluvial deposits. Funds for the purchase of the Trans
Hex MORO were set aside from Rockwell`s 2007 capital raising.
The Transaction was subject to certain conditions precedent including:
- The unconditional approval of South Africa`s Competition Commission;
- Consents by South Africa`s Minister of Minerals and Energy ("DME") to
the cession and transfer of the underlying mining and prospecting
rights pertaining to the MORO to the Saxendrift SPV and the acquisition
by Rockwell of the shares in Saxendrift SPV;
- Satisfactory provision by Rockwell of financial undertakings to THO to
secure and complete the transaction;
- Completion by Rockwell to its satisfaction of a mineral title due
diligence investigation;
- Development and acceptance of the audited balance sheet of Saxendrift
SPV at the effective date meeting specified criteria.
The suspensive conditions to the Transaction have been fulfilled and the
Transaction was completed on Friday 11 April, 2008. Registration of transfer
to Saxendrift SPV of the Saxendrift mining right, as well as prospecting
rights in respect of the Kwartelspan, Zwemkuil-Mooidraai and part of the
Remhoogte-Holsloot projects has already been obtained. Cession of the
Niewejaarskraal mining right is still awaited at this time from the DME, and
the Remhoogte prospecting right is in the process of being renewed. Both
companies are confident that these rights will be awarded pending which the
funds of R26.8 million allocated for their purchase will continue to be
retained in an interest-bearing Trust account. Once the DME has issued the
necessary cession and renewal documents, these rights will also be
transferred to Rockwell RSA via the special purpose vehicle and the funds in
Trust released to Trans Hex.
The immediate benefits to Rockwell anticipated from the Transaction include
the following:
- A substantially increased resource base;
- The immediate addition and rapid re-commissioning of the Saxendrift
alluvial diamond mine which has a history of large diamond production;
- An increase in Rockwell`s monthly carat production over and above the
2007 average of about 2,000 carats per month;
- A reduction in operating costs by spreading overhead costs across
additional mines rather than the current 3 operations; and
- The optimization of the Company`s earth-moving fleet.
For additional details on the mineral rights, resources and equipment that
were acquired through the Transaction please refer to Rockwell`s March 12,
2007 news release.
John Bristow, President and CEO of Rockwell said:
"We are pleased to have completed this important transaction and to have
mobilized our Project Development Team to Saxendrift as of Monday 14th
April. This acquisition provides us with the opportunity to add value for
shareholders by considerably expanding our resource base, increasing our
diamond production, optimizing our existing infrastructure, capitalizing on
operational synergies between the adjacent Saxendrift and Wouterspan
operations, and consolidating all of the existing material Middle Orange
River Operations and Projects.
The acquisition will position Rockwell as the dominant operator in the
Middle Orange River area, and it is also another key step in our strategy to
become a significant African diamond development and mining company."
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
No regulatory authority has approved or disapproved the information
contained in this news release.
Forward Looking Statement
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 Rockwell expects are forward-looking statements. Although Rockwell
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 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, and
general economic, market or business conditions. Investors are cautioned
that any such statements are not guarantees of future performance and those
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 Rockwell`s home
jurisdiction filings that are available at www.sedar.com.
Date: 16/04/2008 14:30:01 Produced by the JSE SENS Department.
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