| Tue 15 Jul 2008, 15:43 | | RDI - Rockwell Diamonds incorporated - Rockwell announces Q1 Fiscal 2009 results |
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RDI
RDI
RDI - Rockwell Diamonds incorporated - Rockwell announces Q1 Fiscal 2009 results
Rockwell Diamonds incoporated
(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 ANNOUNCES Q1 FISCAL 2009 RESULTS
July 15, 2008, Vancouver, BC - Rockwell Diamonds Inc. ("Rockwell" or the
"Company") (TSX: RDI; JSE: RDI; OTCBB: RDIAF) announces financial results for
the three months ending May 31, 2008. Financial information is stated in
Canadian currency unless otherwise indicated.
Rockwell is positioned for growth by mining and developing alluvial diamond
deposits. The Company has focused on projects with the potential for production
of high value gemstone diamonds which are predominantly larger than 2 carats in
size. Plus 2-carat stones comprise more than 70% of the Company`s production and
are of exceptional quality and value. Market forecasters indicate these
gemstones are in short supply and will continue to show strong year on year
price increases.
During quarter ending May 31, 2008, the Company operated three alluvial diamond
mines and is currently in the process of developing and constructing a new wet
rotary pan plant at the fourth operation. The existing plant is being re-
commissioned and should be in production during the latter part of the second
quarter of fiscal 2009. The Company also continues its aggressive property
assessment and development strategy, and advanced corporate activity to raise
its profile, attract new shareholders, and pursue new acquisitions.
OVERVIEW AND HIGHLIGHTS
- Rockwell recorded Revenues from sales of $7.25 million, including revenue
from contract sales of $156,220, from the sale of 4,943.30 carats of
diamonds, and Cost of Sales and amortization totalling $7.18 million;
- The Company achieved an operating profit of $148,133;
- Net general and administrative expenses amounted to $1.45 million offset by
a net tax recovery of $414,012, resulting in a loss of $801,353 for the
quarter or $0.003 per share;
- The average price of diamond sales realized over the quarter was
US$1,432.80 per carat representing an increase on the average price of
US$977.07 achieved during the quarter ending May 31, 2007;
- Total diamond production was 6,310.58 carats was derived from 671,981 cubic
meters of gravels mined and processed at the Company`s Wouterspan, Holpan
and Klipdam operations; and
- Diamonds in inventory at May 31, 2008 totalled 2,398.87 carats.
RESULTS OF OPERATIONS
Rockwell acquired a 51% interest in the Holpan, Klipdam and Wouterspan alluvial
diamond mines located in the Northern Cape Province of South Africa these
diamond properties on January 31, 2007. During the quarter, the Company acquired
the remaining interest in the properties from Durnpike Investments (Pty) Limited
("Durnpike") and HC Van Wyk Diamonds Limited ("HC Van Wyk"), and received 85% of
the proceeds from the production from these operations. In early June 2008 and
subsequent to the end of the quarter, the Company`s Black Economic Empowerment
("BEE") partner, African Vanguard Resources (Pty) Ltd., increased its interest
to 26%, following which the Company will receive 74% of the proceeds of
production.
During the quarter the Company acquired the Saxendrift mine (part of the Middle
Orange River Operations, see news release dated April 16, 2008) and re-
commissioned the operation. Currently, the Company receives 100% of the proceeds
of production but is pursuing BEE contracts to meet the requirements of Mineral
Resources and Petroleum Act, 2002.
PRODUCTION AND SALES - QUARTER BY QUARTER COMPARISON
The following is a comparison of the current quarter (ending May 31, 2008) with
the quarter ending May 31, 2007.
PRODUCTION
Operation 3 months ending May 31, 3 months ending May 31, 2007
2008
Volume Carats Average Volume Carats Average
(cubic grade (cubic grade
meters) (carats meters) (carats
per 100 per 100
cubic cubic
meters) meters)
Holpan 206,466 1,805.35 0.87 396,175 2,205.76 0.56
Klipdam 218,670 2,609.88 1.19 196,941 1,468.32 0.75
Wouterspan 242,240 1,620.30 0.67 284,796 1,621.59 0.57
Saxendrift 4,601 130.70 2.84 - - -
gravel
Saxendrift 2,325 144.35 6.21 - - -
bantoms
Total 674,302 6,310.58 0.93 877,912 5,295.67 0.60
The Saxendrift bantoms are derived from re-processed tailings from the X-ray
processing unit.
SALES, REVENUE AND INVENTORY
3 months ending May 31, 2008
Operation Sales Value of Average Inventory
(carats) Sales value (US$ (carats)
(US$) per carat)
Holpan 1,662.60 2,629,335 1,581.46 509.03
Klipdam 2,013.80 2,449,541 1,216.38 956.09
Wouterspan 1,266.90 2,003,902 1,581.74 658.32
Saxendrift - - - 275.43
Total 4,943.30 7,082,778 1,432.80 2,398.87
SALES, REVENUE AND INVENTORY
3 months ending May 31, 2007
Operation Sales Value of Average Inventory
(carats) Sales value (US$ (carats)
(US$) per carat)
Holpan 2,177.86 1,914,954 879.28 405.78
Klipdam 1,330.53 1,042,846 783.78 402.55
Wouterspan 1,714.42 2,145,247 1,251.29 149.53
Saxendrift - - - -
Total 5,222.81 5,103,047 977.07 957.86
PRODUCTION COSTS
The average operating cost during the period was US$3.69 per tonne, a decrease
from US$5.48 per tonne in the quarter ending May 31, 2007.
PROFIT AND LOSS
The Company had a loss of $801,353 for the three month period ended May 31, 2008
compared to a net loss of $1,921,445 for the comparable period in the prior
year. The decrease in net losses during the period is primarily a result of
management of expenditures and increase interest earned over the period.
During the three months ended May 31, 2008, the Company realized rough diamond
sales of $7,094,921 compared to $7,680,772 for the comparable period in the
prior year. Mine site operating costs for the three months ended May 31, 2008
amounted to $4,608,568 (three months ended May 31, 2007 - $7,100,531), which
excludes amortization and depletion charges of $2,574,231 (three months ended
May 31, 2007 - $1,679,556).
Exploration expenses (excluding stock-based compensation) increased to $304,158
for the three months ended May 31, 2008 compared to $162,523 for the same period
in the prior year. This increase is due to higher cost for engineering
activities and property assessment fees during the three month period ended May
31, 2008 on South African diamond properties and the Kwango River Project in the
DRC.
A foreign exchange gain of $206,122 was recorded for the three months ended May
31, 2008 compared to a foreign exchange gain of $2,856,110 for the same period
in the previous year due to higher South African denominated liabilities and the
weakening of the Canadian dollar.
Administrative costs for the three months ended May 31, 2008 decreased to
$972,055 in comparison to $1,651,984 incurred in for the same period in the
prior year, primarily due to centralized administration and salary expenses
which are in line with those in the market. Travel and conference expenses
amounted to $211,904 for the three months ended May 31, 2008 compared to
$285,222 for the same period in the previous year. Legal, accounting and audit
expenses for the three months ended May 31, 2008 amounted to $137,327 compared
to $402,402 incurred for the same period in the prior year. This decrease was
primarily due to reduced legal and accounting services required in the current
period compared to the three month period ending May 31, 2007 when the Company`s
acquisition activities of Durnpike and HC Van Wyk were ongoing.
Stock-based compensation increased to $685,599 for the three months ending May
31, 2008 in comparison to $7,578 for the same period in the previous year. More
options have been granted during fiscal 2009.
Interest expenses decreased to $86,041 for the three months ended May 31, 2008,
compared to $610,331 for the three months ended May 31, 2007, mainly due to the
accretion and interest charges relating to the issuance of the convertible
promissory notes incurred during the period ended May 31, 2007.
At May 31, 2008, the Company had a working capital of $11,827,792 compared to
working capital of $26,094,261 at February 29, 2008.
Additional details can be found in the Company`s Financial Statements and
Management Discussion and Analysis which are filed on www.sedar.com.
Canada
15 July 2008
Sponsor
Sasfin Capital
Date: 15/07/2008 15:43:03 Produced by the JSE SENS Department.
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