| Mon 5 Oct 2009, 14:30 | | RDI - Rockwell Diamonds Incorporated - Rockwell operational update |
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RDI
RDI
RDI - Rockwell Diamonds Incorporated - Rockwell operational update
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 OPERATIONAL UPDATE
RECOVERS 122, 120 AND 105 CARAT STONES FROM SAXENDRIFT
MONTHLY PRODUCTION EXCEEDS 2500 CARATS
October 2, 2009, Vancouver, B.C. - Rockwell Diamonds Inc. ("Rockwell" or the
"Company") (TSX: RDI; JSE: RDI; OTCBB: RDIAF) provides an update on its
operations for the period March 1, 2009 to October 2, 2009.
As a consequence of the international economic crisis and precipitous decline in
rough diamond prices, Rockwell restructured its business and operations in
January and February 2009 to ensure it could manage the challenges presented by
this situation. The Company placed its Wouterspan operation on care and
maintenance, reduced its employee complement by a total of 180 personnel, and
implemented initiatives to increase production and reduce operating costs.
These initiatives included a review of all contracts and out-sourcing
arrangements, further refinement of mine plans, stringent grade control, smarter
earth moving procedures, re-engineering initiatives to improve production
throughput at Saxendrift, Holpan and Klipdam, and rigorous planned maintenance
and repair programmes at all processing and recovery plants. The Company
contracted an experienced engineer with extensive diamond plant (dense media
cyclone and rotary pan plant) experience, and capital expenditure programmes
were cutback to conserve cash.
Plant throughput and diamond recoveries - The initiatives implemented by the
Rockwell Board and Management have shown systematic benefit at all operations
and resulted in better mining efficiency, increased production, higher diamond
recoveries, lower operating costs, and improved operating efficiencies. As a
consequence of these initiatives the Company has exceeded its target of 2500
carats per month from its three operating mines during the period June to
September 2009. Previously the Company was achieving similar production from
four mines. Diamond production data for Rockwell`s three active mine sites is
summarized in the table below:
Carat Production 2009
Holpan Klipdam Saxendrift Total
February 258.80 521.74 165.72 946.26
March 150.00 498.99 492.40 1,141.42
April 322.94 529.30 294.77 1,147.01
May 513.45 579.55 639.79 1732.80
June 512.10 1,029.16 748.73 2,289.99
July 831.99 1,431.09 565.56 2,828.64
August 815.59 1,201.01 792.13 2,809.23
September 869.13 1,073.42 1,068.16 3,010.71
Operating costs - Since March 2009, the Company has achieved reductions in its
operating costs and has achieved costs at the lower end of its target range of
US$3 - $3.50 per tonne since this time. Though not yet operating at full design
capacity, the Saxendrift mine, as estimated, has shown encouragingly low
operating costs (less than US$3 per tonne). Further cost reductions are
expected as plant operations continue to ramp-up.
Production and cost figures for the current financial year to August 31, 2009
are shown in the table below:
FINANCIAL SUMMARY
2009 Production Carats Cash Costs Unit Unit Total Unit Cash
Tonnes Costs Costs Cost
(R/Tonne) (US$/Tonne) (US$/Tonne)
R
March 370,509 1,141 R R 47.67 $4.77 $2.86
17,662,469
April 407,159 1,147 R R 42.50 $4.72 $2.57
17,303,092
May 462,488 1,733 R17,687,509 R 38.24 $4.23 $2.34
June 441,031 2,290 R R 43.23 $5.84 $3.22
19,064,819
July 564,041 2,829 R R 27.74 $3.57 $2.77
15,649,075
August 515,365 2,809 R12,520,304 R 24.29 $4.25 $3.04
* July and August numbers include the Westbank payment holiday. Financial data
are unaudited.
Diamond recovery plant - The Company implemented reviews of all final recovery
facilities and systems, and made progressive enhancements to tracer test
procedures, sorting systems, and security monitoring. These reviews and
improvements have been aimed at ensuring sustainable high levels of plant
efficiency and optimal security of product. Size frequency plots are conducted
routinely to monitor production characteristics. Aside from improved production
at Rockwell operations, diamond production profiles at all operating mines have
for the six month period ended August 31, 2009 shown systematic trends in line
with historical control data and are compatible with modeled or predicted
population characteristics. In particular, the Saxendrift mine has met profile
expectations with regular recovery of large stones (larger than 10 carats),
including the most recent recoveries of stones of 122, 120, and 105 carats in
late September/early October 2009.
A brief operational summary is provided for each of the Company`s operating
mines below:
Saxendrift mine - The new Saxendrift wet Rotary pan plant underwent pre-
commissioning in October 2008 and subsequent commissioning in the period
February to April 2009. Following improvements to the configuration and
retention times of the scrubber units, progress has been made with the
performance of the processing plant. This operation is achieving budgeted
throughput of approximately 200,000 tonnes per month from the first phase of
plant commissioning and operation. Re-engineering and enhancement of this plant
is ongoing to further improve throughput and lower operating costs in phase two
of the planned plant ramp-up. Mining and operating cash costs achieved at
Saxendrift have been lower than originally budgeted, while recovered grades have
been in line with estimated grades.
Exceptional stones have been recovered from Saxendrift, including a 40 carat
clean white stone in July 2009, and 122, 120, and 105 carat stones during late
September/early October 2009. The 122 carat stone is a rounded Octahedra of
light yellow ("Cape") colour with a number of inclusions. The 120 carat stone is
an irregular rounded and frosted stone which appears to be of good white colour
and good clarity. The 105 carat stone is a high quality rounded top white stone
of excellent clarity. These stones are currently undergoing cleaning and
appraisal.
The 122 carat stone was recovered from basal gravel deposits being mined in the
south west portion of Rockwell`s mining right, whereas the 120 and 105 carat
stones have red oxide coatings indicating recovery from Rooi Koppie (surface
deflation) deposits that are currently being mined and processed. These
recoveries are in-line with predictions made from size frequency plots for this
deposit. This deposit also yields regular stones in the range of plus 10 to 40
carats, and has yielded two high quality intense yellow stones since July 2009.
Klipdam mine - This operation continues to meet production targets on a regular
basis and remains the flagship operation. Progressive enhancements have been
made to mining procedures and the processing plant. Operating cash costs are
below US$3 per tonne and ongoing refinements to material handling and efficient
scheduling of mining and rehabilitation schedules will likely result in further
improvements.
Holpan mine - Since March 2009, considerable effort has been devoted to re-
engineering of the Holpan dense media separation ("DMS"). A programme which has
included replacing cyclones in each of the four 50-tonne-per-hour cyclone units,
improving vibrating screens and water jet flow for the recovery of ferrous
silicon used to control the density medium, swapping out old de-sanding units
with two new modified dewatering units to improve water reticulation and save
costs, has led to an overall 65% increase in the throughput of the plant and
concomitant lowering of costs. This is critical as the DMS plant is a higher
cost operating unit than the Company`s other rotary pan plants and hence greater
throughput and lower operating costs are essential for the sustainability of
this plant in a depressed price environment.
Wouterspan mine - In February 2009, this mine was placed on care and
maintenance. Since then, all facilities and equipment on this site are being
fully maintained and serviced such that this operation could be rapidly re-
commissioned when diamond prices have improved to a level where re-opening is
justified. The Flow-sort recovery unit and Bateman grease plant have been run
intermittently on day shift to maintain this equipment in good standing and to
reprocess old tailings which may still contain diamonds that have been recovered
from all previous mining ventures on the Saxendrift and Wouterspan terrace.
Regular audits of tailings from the Saxendrift mine are also completed at the
Wouterspan recovery plant.
The Company has initiated the design and refurbishment of the existing owned
plant (including two large scrubbers with throughput in excess of 200 tonnes per
hour each, two 18-foot pans, and two 16-foot pans) as a prelude to erecting a
completely modernized wet Rotary pan plant at Wouterspan similar to the modular
design commissioned at Saxendrift. This low cost operating plant would replace
the old Wouterspan plant and in Phase 1 of commissioning would have a throughput
of about 200,000 tonnes per month. The modular design configuration would allow
for installation of at least two additional double 18-foot pan plants. This
addition could significantly enhance the throughput and carat production at
Wouterspan and reduce the operating costs as part of a Phase 2 expansion plan.
President and CEO John Bristow stated, "In spite of the world economic
recession, precipitous decline in diamond prices, and costly unforeseen
corporate activity, Rockwell has demonstrated its ability to rapidly adapt to
these challenges. The Company has survived the storm, significantly improved
its operating skills and abilities, increased production through smart mining
and clever plant improvements, and lowered its operating cost structure. The
improvements set in place have ensured that the Company is operating at a break-
even point and is well placed to return to profit and grow as diamond prices
improve further."
For further details on Rockwell Diamonds Inc., please visit the Company`s
website at ww.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. 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 40-
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
5 October 2009
Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
Date: 05/10/2009 14:30:01 Produced by the JSE SENS Department.
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