| Thu 16 Oct 2008, 8:34 | | RDI - Rockwell Diamonds Incorporated - Press Release |
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RDI
RDI
RDI - Rockwell Diamonds Incorporated - Press Release
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 ANNOUNCES FISCAL 2009 RESULTS
FOR THREE & SIX MONTHS ENDING AUGUST 31, 2008
October 15, 2008, Vancouver, BC - Rockwell Diamonds Inc. ("Rockwell" or the
"Company") (TSX: RDI; JSE: RDI; OTCBB: RDIAF) announces financial results for
the three month and six month periods ending August 31, 2008. Financial
information is stated in Canadian currency unless otherwise indicated.
Rockwell is focused on growth by mining and developing alluvial diamond
deposits. The Company has established a significant footprint on alluvial
deposits which consistently yield high value gemstone diamonds. Plus 2-carat
stones comprise more than 65% of the Company`s production and are of
exceptional quality and value.
Diamond prices remained robust through the six month period ending August 31,
2008 and in September the Company recovered a large white 189.6-carat
gemstone from the Klipdam mining operation. This stone realized a sale price
of approximately US$10.2 million. This exceptional price was achieved
against the background of turbulent conditions in world banking and capital
markets which are likely to have an impact on diamond prices going forward.
During the six month period ending August 31, 2008, the Company expanded its
operations to four (from an original three operations) with the re-
commissioning of operations at Saxendrift on the south bank of the Middle
Orange River, adjacent to its Wouterspan operation.
Rockwell is advancing production at the new Middle Orange River operations
acquired from the Trans Hex Group, beginning with Saxendrift. Aside from the
re-commissioning of the existing small scale Saxendrift plant during the six
month period to August 31, 2008, the Company is on target and on budget with
the construction of a new state-of-the-art, low-cost, high-volume wet Rotary
pan plant on the Saxendrift terrace. Full scale pre-commissioning trials of
the refurbished Saxendrift new final recovery facility began three weeks
ahead of schedule in late September 2008. Commissioning of the new
Saxendrift wet plant is scheduled for November 2008. Once commissioned this
plant will add strong growth to the Company`s diamond production profile, and
yield further operational costs saving.
The Company experienced loss of production due to industrial action at its
operations during the quarter ending August 31, 2008. This action was
resolved to the benefit of the Company and its employees in late August and
full scale production resumed on September 3, 2008.
In spite of industrial action, which resulted in approximately 35% loss in
carat production during the second quarter of fiscal 2009, the Company was
able to contain costs and show an operating loss of $155,476 for the period
ending August 31, 2008. At a consolidated level, the Company showed a loss
of $2.2 million for the period. For the six month period to August 2008
Rockwell showed an operating loss of $7,344 and at a consolidated level a
loss of $3 million. Good production rates have been achieved since normal
operations resumed on September 3, 2008 and this, combined with cost savings
implemented by the Company, will yield reduced operating costs and positive
financial performance in the third quarter ending November 30, 2008.
The Company ended the quarter with cash reserves of $10.1 million which will
be allocated to future expansion of existing operations, and development of
Brownfields projects already held by the Company.
Overview and Highlights
In the three month period ended August 31, 2008:
-4,266.25 carats were produced at the Holpan/Klipdam, Wouterspan and
Saxendrift operations which was about 35% under budget due to industrial
action;
-5,024.34 carats were sold at an excellent average price of US$1,951.41 per
carat;
-Revenues from sales were $9.9 million;
-Cost of sales and amortization totalled $10.3 million, resulting in an
operating loss of $155,476 for the period;
-Net general and administrative expenses amounted to $3.2 million, offset by
a net tax recovery of $703,167, and the loss on the sale of a discontinued
operation of $203,338 resulted in a net loss of $2.2 million or $0.01 per
share.
In the six months ending August 31, 2008:
-The Company re-commissioned an existing small Rotary pan plant at Saxendrift
and implemented the fast track construction of the new Saxendrift wet Rotary
pan plant
-10,576.83 carats were produced from operations at Holpan/Klipdam, Wouterspan
and Saxendrift;
-9,879.61 carats were sold at an average price of US$1,709.31 per carat;
-Revenues from sales of $17.4 million, inclusive of revenue received from
contract diamond sales of $160,576;
-Cost of sales and amortization totalled $17.5 million, resulting in an
operating loss of $7,344 for the period;
-Net general and administrative expenses amounted to $4.6 million, offset by
a net tax recovery of $1.1 million, and the loss on the sale of a
discontinued operation of $203,338 resulted in a net loss of $3 million or
$0.01 per share;
-Diamonds in inventory at August 31, 2008 totalled 1,640.78 carats;
*The Company held cash reserves at August 31, 2008 of $10.1 million
Results of Operations
In the first half of fiscal 2009, the Company operated three alluvial diamond
mines and re-commissioned operations at its fourth site, Saxendrift. During
the period, the Company also increased its interest in the Holpan/Klipdam and
Wouterspan properties to 74%, with the remaining 26% being held by a Black
Economic Empowerment ("BEE") consortium.
Industrial action at the Wouterspan mine during the quarter resulted in
operations being curtailed at this operation during late July and the month
of August. Wage negotiations for all South African operations were
implemented in June 2008. These negotiations reached a deadlock in mid
August and were followed by work stoppages and reduced production at the
Company`s other operations. Negotiations were successfully concluded in late
August and full operations were resumed on September 3, 2008.
Production and Sales - Quarter Comparison
The following is a comparison of the current quarter (ending August 31, 2008)
with the quarter ending August 31, 2007.
PRODUCTION
Operation 3 months ending August 31, 2008
Volume Carats Average grade
(carats per 100
cubic meters)
(cubic
meters)
Holpan 150,285 774.01 0.52
Klipdam 210,759 1,622.13 0.77
Wouterspan 120,829 708.12 0.59
Makoenskloof - - -
Saxendrift 84,883 1,161.99 1.37
Total 566,756 4,266.25 0.75
Production
Operation 3 months ending August 31, 2007
Volume Carats Average grade
(carats per 100
cubic meters)
(cubic
meters)
Holpan 275,758 2,446.07 0.89
Klipdam 259,527 2,528.02 0.97
Wouterspan 354,492 2,594.59 0.73
Makoenskloof 63,199 237.3 0.38
Saxendrift - - -
Total 952,976 7,805.98 0.82
SALES, REVENUE AND INVENTORY
Operation 3 months ending August 31, 2008
Sales Value of
(carats) Sales
(US$)
Holpan 1,015.39 842,285 829.52 267.65
Klipdam 1,898.91 5,294,781 2,788.33 679.31
Wouterspan 1,093.56 1,700,432 1,554.95 272.88
Makoenskloof - - - -
Saxendrift 1,016.48 1,967,072 1,935.18 420.94
Total 5,024.34 9,804,570 1,951.41 1,640.78
SALES, REVENUE AND INVENTORY
Operation 3 months ending August 31, 2007
Sales Value of Average value Inventory
Sales (US$ per carat) (carats)
(US$)
(carats)
Holpan 1,469.20 3,149,370 2,143.59 1,382.65
Klipdam 1,758.87 5,218,220 2,966.80 1,171.70
Wouterspan 1,752.56 4,879,342 2,784.12 991.56
Makoenskloof - - - 237.3
Saxendrift - - - -
Total 4,980.63 13,246,932 2,659.69 3,783.21
Production and Sales -Six Month Comparison
The following is a comparison of the first six months of fiscal 2009 (ending
August 31, 2008) with the six months ending August 31, 2007.
PRODUCTION
Operation 6 months ending August 31, 2008
Carats Average
grade
(carats per
100 cubic
meters)
Volume
(cubic
meters)
Holpan 356,751 2,579.36 0.72
Klipdam 429,429 4,232.01 0.99
Wouterspan 363,069 2,328.42 0.64
Makoenskloof - - -
Saxendrift 89,484 1,437.04 1.58
Total 1,238,733 10,576.83 0.85
Production
Operation 6 months ending August 31, 2007
Carats Average
grade
(carats per
100 cubic
meters)
Volume
(cubic
meters)
Holpan 671,933 4,651.83 0.7
Klipdam 456,468 3,996.34 0.88
Wouterspan 639,288 4,216.18 0.66
Makoenskloof 63,199 237.3 0.38
Saxendrift - - -
Total 1,830,888 13,101.65 0.65
SALES, REVENUE AND INVENTORY
Operation 6 months ending August 31, 2008
Average Inventory
value (carats)
(US$ per
carat)
Sales Value of
(carats) Sales (US$)
Holpan 2,589.96 3,471,620 1,340.41 267.65
Klipdam 3,912.71 7,744,322 1,979.27 679.31
Wouterspan 2,360.46 3,704,334 1,569.33 272.88
Makoenskloof - - - -
Saxendrift 1,016.48 1,967,072 1,935.18 420.94
Total 9,879.61 16,887,348 1,709.31 1,640.78
SALES, REVENUE AND INVENTORY
Operation 6 months ending August 31, 2007
Value of Average Inventory
Sales (US$) value (carats)
(US$ per
carat)
Sales
(carats)
Holpan 3,647.06 5,064,324 1,388.60 1,382.65
Klipdam 3,089.40 6,261,066 2,026.63 1,171.70
Wouterspan 3,466.98 7,024,589 2,026.14 991.56
Makoenskloof - - - 237.3
Saxendrift - - - -
Total 10,203.44 18,349,979 1,544.12 3,783.21
Production Costs
The average operating cost during the quarter ending August 31, 2008 was
US$5.62 per tonne which is inclusive of the Saxendrift start-up operation (by
excluding Saxendrift, which is currently in a ramp-up phase, it is US$4.65
per tonne), an increase from US$2.96 per tonne in the quarter ending August
31, 2007. The increased cost per tonne is largely due to the loss of
production and throughput related to industrial action experienced during
this period.
The average operating cost over six months was US$4.77 per tonne which
includes Saxendrift. Excluding Saxendrift, which is currently in a ramp-up
phase, the operating cost decreases to US$4.16 per tonne, an increase from
US$3.48 per tonne in the six months ending August 31, 2007.
During the first six months of fiscal 2009, the Company focused on
implementing costs savings throughout the business, and most particularly in
its mining and processing operations. Sustainable costs savings have been
achieved through the revision of mine plans, optimization of mining methods
and earth moving fleet, the modernization of processing plant, training, and
enhancement of productivity. As a consequence of its optimization programs,
the Company was able to re-commission operations at Saxendrift during this
six month period without having to resort to additional staff recruitment and
the purchase of new earth moving fleet.
Cost savings have been reflected in quarterly operating cash costs which have
been relatively flat for the past six quarters, in spite of considerable
price increases in steel, fuel and oil, electricity, and labour. The
benefits of costs savings implemented by the Company will be apparent in
forthcoming quarters.
Profit and Loss
The Company had a loss of $2,249,847 for the three month period ended August
31, 2008 compared to a net profit of $431,209 for the comparable period in
the prior year. The net losses during the period was primarily the
consequence of industrial action and resultant loss of production experienced
by the Company during late July and through August 2008.
At August 31, 2008, the Company had working capital of $4,388,435 compared to
working capital of $11,837,132 at May 31, 2008 and held total cash reserves
of $10.1 million which will be allocated to future expansion of existing
operations, and development of Brownfields projects already held by the
Company.
Additional details can be found in the Company`s Financial Statements and
Management`s Discussion and Analysis which are filed on www.sedar.com.
The Company will host a telephone conference call on Thursday, October 16 at
10:00 a.m. Eastern Time (7:00 a.m. Pacific; 4:00 p.m. Johannesburg) to
discuss these results. The conference call may be accessed by dialing (877)
591-4959, or (719) 325-4891 internationally. A live and archived audio
webcast will also be available at on the Company`s website at
www.rockwelldiamonds.com.
The conference call will be archived for later playback until Friday, October
24, 2008 and can be accessed by dialing (888) 203-1112 in Canada and the
United States, or (719) 457-0820 and using the passcode 5716430.
For further information, please 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 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
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, 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: 16/10/2008 08:34:01 Produced by the JSE SENS Department.
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