| Tue 18 Aug 2009, 14:30 | | RDI - Rockwell - Updates diamond sales noting price improvements 40-Ct stone |
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RDI
RDI
RDI - Rockwell - Updates diamond sales noting price improvements 40-Ct stone
sells US$15,200 per Carat; 21-Ct stone sells US$17,400 per Carat
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 TSX: RDI CUSIP Number: 77434W103
Share code on the OTCBB: RDIAF
("Rockwell")
ROCKWELL UPDATES DIAMOND SALES NOTING PRICE IMPROVEMENTS 40-CT STONE SELLS
US$15,200 PER CARAT; 21-CT STONE SELLS US$17,400 PER CARAT
August 18, 2009, Vancouver, B.C. - Rockwell Diamonds Inc ("Rockwell" or the
"Company") (TSX: RDI; JSE: RDI; OTCBB: RDIAF) updates production and diamond
sales for 2009. Reported sales are for diamonds produced from the Holpan,
Klipdam, and Saxendrift mines. The Company`s fourth operation, Wouterspan,
which is located on the Middle Orange River adjacent to Saxendrift remains on
care and maintenance. All of these mines are located in the Northern Cape
Province of South Africa.
Diamond sales since March 2009 are summarized by month in the table below.
Sales and revenues achieved since the start of 2009 have included a combination
of tenders, direct selling of select goods to specialized manufacturers, sales
to the South African State Diamond Trader, and income from special stones
beneficiated in terms of Rockwell`s agreement with the Steinmetz Diamond Group.
Month Carats Revenue Average
(US$) Value
(US$/carat)
March 2,872.47 $1,526,521 $ 531
May 2,243.82 $1,311,929 $ 585
June 1,564.64 $1,094,857 $ 700
July (i) 2,486.38 $1,795,188 $ 722
July (ii) 1,809.38 $2,215,737 $1,225
Sales data for individual mines and the group average for the two latest sets of
diamond sales are described below.
Early July Diamond sales: An average price of US$722 per carat was achieved
from the first sale in July which included production from the period of late
May and June 2009, shown in the table above as July (i). Diamonds sold for this
period include:
- 15 stones in the 10-20 carat range
- 6 stones in the 20-30 carat range
- Largest stone was 38.33 carats.
A third of the goods shown in the July (i) sale were marketed through direct
sales and the balance was sold by tender. Fifty-one buyers attended the tender
and 45 buyers bid on parcels. Sales in the 0.5 to 10 carat range showed an
increase of at least 10% above the previous sales. There were also price
increases for cleaner stones. Details by mine are tabulated below:
July (i) Diamond Sales
Mine Carats Revenue Average Value
(US$) (US$/carat)
Holpan 612.39 $332,409.73 $542.81
Klipdam 1,042.36 $599,345.27 $574.99
Saxendrift 831.03 $863,427.58 $1,038.98
Total 2,485.78 $1,795,182.58 $722.18
Late July Diamond sales: Results from the most recent sale for Rockwell
diamonds (table July (ii) below) for which an average price of US$1,224 per
carat was achieved. These goods were mined in late June and July 2009. A
limited amount of direct sales were done and a greater part of the production
was sold via tender. Diamonds included in these sales figures included the
following:
- 7 stones in the 10 - 20 carat range
- 3 stones in the 20 - 30 carat range
- 1 stone in the 30 - 40 carats range
- 1 stone in the 40 - 50 carat range
Two mid-sized stones achieve excellent prices: The largest stone sold in late
July was a 40-carat D-colour flat stone with inclusions in the surface which
achieved a price of US$15,200 per carat. In addition, an excellent 21.69-carat
internally flawless stone of E-colour achieved a price of US$17,400 per carat.
Sales prices for late July showed an approximate 10% increase over the previous
period for small stones (less than 0.75 carats), and approximately 5% increase
for 0.75-2.49 carat stones, whereas 2.50-4.79 carat stones achieved similar
prices to the previous sale for better quality goods. Spotted diamonds (stones
with a large number of inclusions) achieved far lower prices than in the
previous sales period.
July (ii) Diamond Sales
Mine Carats Revenue Value
(US$) US$/carat
Holpan 453.60 $622,554.00 $1,372.47
Klipdam 916.36 $286,318.70 $312.45
Saxendrift 439.42 $1,306,850.90 $2,974.04
Total 1,809.38 $2,215,723.60 $1,224.58
Production and costs: Production statistics for each mine are tabulated below.
The average cash costs of production from March 1 to July 31, 2009 (over the
Company`s 2010 fiscal year) for the group has been approximately US$2.78 per
tonne. A combination of restructuring, efficiency and plant throughput
improvements, cost control measures, and increasing production are successfully
keeping monthly cash costs below the Company`s target range of US$3.00-3.50 per
tonne. This unit cost is expected to remain at the low end of the range as the
Company continues to increase production at existing operations and improve
processing plant efficiencies.
Production March-July 2009
Mine Volume Carats Average Cost
(cubic Grade (US$/tonne)
meters) (carats/100
cubic
meters)
Holpan 338,351 2,330.50 0.69 2.97
Klipdam* 404,108 3,667.90 0.91 2.67
Saxendrift 415,086 2,741.25 0.66 2.68
Total 1,157,545 8,747.93 0.76 2.78
*Included in the Klipdam inventory are 199.89 carats from Windsorton, a
prospecting right
In response to the greater than 50% decrease in diamond prices in the latter
part of 2008, Rockwell suspended diamond sales through late 2008 and early 2009
and resumed sales in late February 2009. Rockwell`s 2009 sales strategy has
achieved some success by a combination of direct sales to select buyers and
manufacturers and sales by tender. Sales during the first three months of 2009
comprised a combination of direct selling to buyers, and limited tenders sales
given overall buying interest was subdued and opportunistic buying patterns were
apparent for about 30% of the buyers. Since June, there has been stronger
buying interest and attendance at diamond tenders has increased with the numbers
of buyers at the latest tenders approaching the levels apparent in 2008.
Equally encouraging, prices have remained firm in spite of a large release of
diamonds by De Beers in June and the recent resumption of Russian diamond sales.
Overall Rockwell has noted good demand in the 2 to 10 carat rough stone range,
with the strongest buying focussed on the 2 to 5 carat market segment. Demand
and prices for 3 carat rough stones have been extremely strong since March 2009
and prices realized have been similar to those for early 2008 for better quality
goods. Demand and prices for plus 10 carat stones, however, have remained
subdued, although top quality white and yellow stones have started to move with
prices at about 60 to 75% of last year.
President and CEO John Bristow commented "Rockwell is encouraged by the
improvement in buying activities by diamantaires and manufacturers along with
the concomitant increase in prices. Based on results to date and our view on
demand, sales, and production trends, we foresee a steady overall improvement in
prices, albeit staying well below the highs of 2008, for our production going
forward through the remainder of the 2009 calendar year. We believe that our
swift response to cut costs and production in late 2008 and early 2009 has
allowed the Company, largely, to weather the worst of the market conditions. At
prices of about US$1,000 per carat and monthly production of 2,400 carats, the
Company is cash flow positive, and as prices improve further Rockwell will
return to profitability. Rockwell is ideally placed to resume operations at
Wouterspan as the market strengthens and thereafter resume its growth and
consolidation plans in the medium term."
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 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.
Canada
18 August 2009
Sponsor
Sasfin Capital
(A division of Sasfin Bank Limited)
Date: 18/08/2009 14:30:01 Produced by the JSE SENS Department.
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