| Thu 22 May 2008, 14:30 | | RDI - Rockwell - Commences operations at Saxendrif |
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RDI
RDI
RDI - Rockwell - Commences operations at Saxendrift Mine in South Africa
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 COMMENCES OPERATIONS AT SAXENDRIFT MINE IN SOUTH AFRICA
May 22, 2008, Vancouver, BC - Rockwell Diamonds Inc. ("Rockwell" or the
"Company") (TSX: RDI; JSE: RDI; OTCBB: RDIAF) is pleased to announce that it
has made good progress with the recommissioning of existing diamond processing
plants and start-up of mining operations at the Saxendrift alluvial diamond mine
in South Africa.
The Saxendrift Mine is located on the south bank of the Middle Orange River,
across from Rockwell`s Wouterspan operation, and is part of the Middle Orange
River Operations ("MORO") recently acquired from the Trans Hex Group ("THG").
Rockwell has also recovered its first parcel of diamonds from Saxendrift,
including a 13 carat yellow octahedral stone.
Phase 1 of a two-phase development plan for alluvial diamond operations at
Saxendrift is now largely complete. Phase 1 activities include:
- Recommissioning of a 35 tonne per hour Dense Media Separation Plant ("DMS");
- Repairing and recommissioning the gravel screening and rotary-pan plants
(including three 16-foot and one 14-foot rotary-pans) located near the north-
eastern margin of the Saxendrift terrace;
- Refurbishing and recommissioning the Flow-sort X-ray final recovery unit; and
- Setting in place mining and earth moving equipment with sufficient capacity to
deliver gravels to the two metallurgical plants. Equipment drawn from the
Company`s three other operations, supplemented by that acquired from MORO and
the purchase of a new Komatsu 475 bulldozer.
By optimizing mining and earth moving operations at the Company`s other mines
and purchasing larger earth moving equipment at Klipdam and Wouterspan, spare
capacity was re-deployed at Saxendrift, thereby minimizing capital expenditure.
Once the above plants are fully operational, the Company expects to achieve a
through-put of approximately 60,000 tonnes of mined gravel per month.
Good progress has also been made in Phase 2 of the Saxendrift re-development
plan. Phase two comprises the construction and commissioning of a new Wet
Plant. The wet plant will include:
- High volume trommel screening units;
- Four scrubbers feeding four 18-foot rotary-pan plants;
- Puddle-density control systems, cyclone de-sanding, and a water reticulation
system;
- A refurbished X-ray flowsort system; and
- A hands-off final recovery system.
Preparation of the foundations and civil structures for the construction of this
high volume, low-maintenance plant is well-advanced. The 18-foot rotary pans,
vibrating screen, conveyor, and much of the ancillary components for the plant
have already been fabricated or are in the final stages of manufacture. This
plant will incorporate extensive refinements aimed at lowering operating costs
and improving efficiencies, and will have a throughput of approximately 380,000
tonnes of mined gravel per month. The new wet plant is scheduled for
commissioning in the last quarter of calendar 2008.
The MORO Acquisition
Properties
The MORO acquisition was completed on April 11, 2008. The properties located
on the south bank on the Middle Orange River include the Saxendrift and
Niewejaarskraal alluvial diamond mines as well as three alluvial diamond
exploration projects (Kwartelspan-Kransfontein, Zwemkuil-Mooidraai, and
Remhooget-Holsloot), listed in the table below:
MINING AND PROSPECTING RIGHTS
FARM NAME PORTION SIZE (HA) STATUS
Saxendrift Saxendrift 20 Ptn Of Rem 1368.294 Transferred
Operations
Saxendrift 21 Remainder
Saxendrift 21 Ptn Of Ptn 1
Saxendrift 20 Ptn Of Rem 359.000
Niewejaarskraal Niewejaarskraal Ptn Of Ptn 6 1766.390 Pending
Operations 40
Niewejaarskraal Ptn Of Ptn 4
40
Niewejaarskraal Ptn Of Ptn 2
40
Viegulands Put Ptn Of Rem 324.105 Transferred
39
Viegulands Put Ptn Of Rem
39
Niewejaarskraal Ptn Of Ptn 6 995.200
40
Kwartelspan Project Kransfontein 19 Ptn 1 903.650 Transferred
Kwartelspan 25 Remainder
Remhoogte-Holsloot Remhoogte 152 Ptn Of Ptn 1 2798.511 Pending
Project
Holsloot 47 Ptn Of Ptn 3 1049.590 Transferred
Zwemkuil-Mooidraai Zwemkuil 37 Ptn Of Rem 2488.124
Project
Mooidraai 36 Ptn Of Rem 2901.000
All of the mineral rights have been converted to new order rights under South
Africa`s Mineral and Petroleum Development Act, 2002. These mineral rights and
their associated assets have been transferred into a new special purpose
vehicle, which has now been acquired by Rockwell Resources RSA (Pty) Limited, a
wholly owned subsidiary of Rockwell. These mineral rights have been registered
in the Mining Titles Office. Rockwell awaits final granting of the cession of
the Niewejaarskraal mine rights and renewal of portion of the Remhoogte permit,
expected shortly, at which time the rights will be transferred to Rockwell.
There are Environmental Management Program reports for all the mining and
exploration operations. An independent environmental consulting group has
undertaken additional audit and assessment work on the MORO properties since the
two parties entered into the agreement in early 2007. Rockwell has assumed
responsibility of future liabilities at the closing date of the transaction.
All of the properties have the required water use licenses for mining and bulk
sample operations. Contracts and guarantees for electrical supply are also in
place with Eskom, the State utility provider, and Rockwell has purchased a large
380Kva generator set and step-up transformers to provide back-up supply in the
event of power outages. A Social and Labour Plan was submitted jointly by THG
and Rockwell as part of the process to convert the Saxendrift rights and cede
all the mineral rights into the special purpose vehicle, which has been accepted
by the Department of Minerals and Energy.
Further details of the production history and mineral resources for MORO are
provided in Rockwell`s news release of March 12, 2007.
Saxendrift is located directly across the river from Rockwell`s Wouterspan
alluvial diamond operation, which is situated on the north bank of the Middle
Orange River. The availability of a large amount of geological and mining
information for the south bank sites has allowed Rockwell to undertake detailed
planning. An experienced project and management team has also been created from
Rockwell and former Saxendrift staff, and this has advanced the work at
Saxendrift.
The proximity of Saxendrift and Wouterspan, as well as the Niewejaarskraal mine
(another past producer that is currently under care and maintenance) that was
also acquired, will enable a number of the operations in the vicinity to be
managed under a single team as well as sharing stores and spares, catering,
maintenance and repair, and specialized services such as geology, grade control,
drilling and blasting, and thereby reduce overhead costs.
Once the final permitting has been acquired for Niewejaarskraal, the Project
Team currently responsible for the re-commissioning of Saxendrift operations
will be tasked with the start-up of this mining site.
Benefits of the Acquisition
The benefits accruing to Rockwell as a consequence of this transaction include
the following:
- Inferred resource base will increase from 46.6 million cubic metres to 77.0
million cubic metres and the indicated resource base will increase from 5.3
million cubic metres to 13.87 million cubic metres (see note 1);
- Addition of two new mining operations with a history of large diamond
production;
- Increase its monthly carat production from its 2008 financial year average of
about 2,000 carats per month to approximately 4,000 carats per month;
- History of recovery of high value stones from Saxendrift and Niewejaarskraal;
- History of recovery of rare coloured stones at Saxendrift and high prices
received are promising as there is extremely strong demand in prevailing
market conditions and exceptional prices are being achieved for these diamonds;
- Additional areas at these new projects will be tested by detailed drilling as
well as sampling programs and resource estimates are planned;
- Saxendrift and Niewejaarskraal properties include pan plants, DMS plants, and
X-ray recovery units, as well as a large amount of earth moving equipment and
other vehicles; much of the equipment at Saxendrift is now in service;
- Well established infrastructure is in place at Saxendrift and Niewejaarskraal
including offices, workshops, service bays, accommodation and catering
facilities, electrical power, and water reticulation which will support
simultaneous operation on all properties;
- Security infrastructure and the ability to link these into systems run by
Rockwell; and
- By spreading and sharing overhead costs across 5 mines rather than its current
3 operations, and further optimizing its earth moving fleet, Rockwell expects to
reduce its unit operating costs.
Note 1
Indicated Resources for Saxendrift: 2.6 million cubic metres grading 0.82 cphm3
(0.39 cpht); Inferred Resources for Saxendrift: 7.8 million cubic metres grading
0.52 cphm3 (0.25 cpht); Total MORO Indicated Resources: 8.6 million cubic metres
grading 0.87 cphm3 (0.38 cpht) and Inferred Resources: 30.4 million cubic metres
grading 0.79 cphm3 (0.42 cpht) (grades expressed in cpht have been calculated
on the basis of a specific gravity of 2.1; these data are as per the Rockwell
News release dated March 12, 2007; cphm3 - carats per hundred cubic metres; cpht
- carats per hundred tonnes)
The Middle Orange River acquisition positions Rockwell as the dominant
development, mining and exploration company in the area, enhancing its ability
to mine and market high value gemstone diamonds.
John Bristow, President and CEO of Rockwell said:
"We are pleased to have made good progress with the first phase of re-
commissioning of the two existing processing plants on Saxendrift and have also
recovered a small parcel of diamonds while doing this work. As this
infrastructure has been idle for about two years, there is further repair and
replacement work to do but we expect to progressively ramp up Phase 1 to full
production during early-June 2008.
The start-up of Saxendrift will allow us to further reduce our overheads and we
are confident of our ability to run this operation at similar costs to our
existing three operations. In April, we achieved diamond production of some
2,500 carats at an operating cost of about US$3.40 per tonne at our existing
mines. Saxendrift production will contribute further to increasing our
production profile and lowering costs once fully ramped-up.
The acquisition will significantly increase our resource base, and offers the
opportunity to optimize plant, equipment, infrastructure and key artisans and
technicians, driving operational synergies between the Saxendrift and Wouterspan
operations. The goal is to consolidate all of the Middle Orange River
Operations and Projects and improve operating margins. This acquisition is in
line with our growth strategy and intention to become a significant African
development, mining, and exploration company."
Glenn Norton, Pr.Sci.Nat., Rockwell`s Manager, Resources and a Qualified Person,
has reviewed and approved this news release.
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.
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.
Date: 22/05/2008 14:30:01 Produced by the JSE SENS Department.
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