| Thu 21 Jul 2011, 8:15 | | RDI - Rockwell Diamonds Incorporated - Independent Valuation and Update on |
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RDI
RDI
RDI - Rockwell Diamonds Incorporated - Independent Valuation and Update on
Private Placing
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: CA77434W2022
Share code on the TSX: RDI CUSIP Number: 77434W103
Share code on the OTCBB: RDIAF
INDEPENDENT VALUATION OF ROCKWELL DIAMONDS CONFIRMS SIGNIFICANT UPSIDE POTENTIAL
FOR SHARES AND PROVIDES UPDATE ON PRIVATE PLACEMENT
July 21 2011 Vancouver, BC - Rockwell Diamonds Inc. ("Rockwell" or the
"Company") (TSX: RDI; JSE: RDI; OTCBB: RDIAF) announces the results of an
independent valuation of the Company and the support of a key strategic
shareholder in the current private placement. The valuation, dated February 28,
2011, was conducted by Jennifer Lucas, MBA, CBV, ASA, of Evans & Evans Inc.
following an in depth review of the Company`s publicly available information and
filings in addition to interviews with management from which it gained an
understanding of the history, background and future growth plans.
Results of Independent Valuation:
"We have a sound understanding of our resources and have published a technical
report for each of our properties," said James Campbell, CEO, Rockwell. "Having
completed a strategic review of the business at the beginning of this year, we
have a full understanding of what we need to do to improve our financial
performance. We are totally committed to sustainably improving our diamond
recovery and thus accreting revenue and profitability in order to close the
value gap."
Rockwell was valued on a going concern basis using a weighted average of three
valuation techniques at February 28, 2011 ("valuation date"):
- A trading price method utilizing the average trading price of Rockwell for the
10 and 90 days preceding the valuation date;
- A guideline public company method comparing Rockwell`s average dollar value
per enterprise value of reserves and resources to a peer group of eight listed
diamond mining companies; and
- An adjusted book value method using discounted cashflow of the underlying
operations.
The underlying discount rates and fair market value of Rockwell`s operations and
development properties based on the discounted cash flow method are as follows:
Operation Discount rate (%) Value range
Fair Wouterspan 25.36 to 28.96 $47.4 million to
Market $54.8 million
Value*
Tirisano 25.36 to 28.96 $17.6 million to
$20.0 million
Klipdam 22.36 to 24.96 $3.6 million
Holpan 22.36 to 24.96 $281,000
Niewejaarskraal 25.36 to 28.96 $37.4 million to
$42.5 million
Saxendrift 22.36 to 24.96 $15.5 million to
$16.1 million
Resource $121.9 million to
properties $137.3 million
Adjusted book value** $149.5 million to
$165.0 million
* 74% of mine
** Adjustments to balance sheet of Rockwell to evaluate fair value of net assets
at February 28, 2011
The range of fair market value for Rockwell was determined to be $62.0 million
to $69.1 million, based on a weighted combination of the three valuation methods
described above:
Valuatio Midpoint of Weighting Value Weighting Value
n method fair market
value
Trading $25,280,000 40% $10,112,000 40% $10,112,000
price
method
Guidelin $15,800,000 30% $4,740,000 25% $3,950,000
e public
company
method
Adjusted $157,250,00 30% $47,175,000 35% $55,037,500
book 0
value
method
Total $62,000,000 $69,100,000
Update on private placement:
Rockwell`s strategic partnership with Daboll Consultants Ltd, an affiliate of
the Steinmetz Diamond Group continues to strengthen. Steinmetz has recognized
the inherent value in Rockwell with a subscription amounting to $5 million in
the current private placement at a price of $0.75 per share (or 5 cents per
share prior to the 15:1 consolidation).
"Our strategic partnership with Rockwell continues to grow from strength to
strength. We have committed significant capital to the current capital raising
initiatives which clearly demonstrates that we have complete confidence in their
investment plans to improve the production profile," explains Ori Temkin, CEO of
Steinmetz Diamond Group.
"Our long standing strategic partner has identified that Rockwell presents an
excellent investment opportunity as our stock is currently trading at a fraction
of the value of its underlying assets, based on the Company`s future cash
generation potential", stated Campbell. "The significant capital that Daboll has
committed to Rockwell`s private placement, together with the funds being raised
from institutional and private investors as well as directors of the Company,
will enable us to continue with our investment plans so that Rockwell can
deliver on its potential."
Subscriptions for the private placement are expected to close by July 22, 2011
with a special shareholders` meeting to approve the transaction scheduled for
August 25, 2011. Further announcements will made in due course.
For further information on Rockwell and its operations in South Africa, please
contact
James Campbell
CEO
+27 (0)83 457 3724
Stephanie Leclercq
nvestor Relations
+27 (0)83 307 7587
About Rockwell Diamonds:
Rockwell is engaged in the business of operating and developing alluvial diamond
deposits, with a goal to become a mid-tier diamond mining company. The Company
has three existing operations, which it is progressively optimizing, two
development projects and a pipeline of earlier stage properties with future
development potential. Rockwell is also at an advanced stage of completing the
acquisition of the Tirisano property.
Rockwell also evaluates merger and acquisition opportunities which have the
potential to expand its mineral resources and production profile and would
provide accretive value to the Company.
About Steinmetz Diamond Group:
`Creators of the world finest diamonds`, With seven decades of expertise and
heritage in the diamond industry, the company has a diversified interest in the
diamond business - providing rough and polished diamonds to our customers around
the world, cutting and polishing rough diamonds in Botswana, South Africa,
Namibia and New York.
Steinmetz is known for its leadership in rare and exceptional diamonds as well
as creation of unique high-end jewelry.
Some of the famous diamonds crafted by Steinmetz are the 203.04 carats, De Beers
Millennium Star and the magnificent Steinmetz Pink - 59.60 carats, flawless
fancy vivid pink diamond.
The group marketing arm has been innovative and creative through special
exhibitions at the Smithsonian in Washington as well as `Diamonds` at the
Natural History museum in London. Steinmetz is a proud sponsor of Formula 1 team
Vodafone McLaren Mercedes and holds annually the Monaco GP Flawless Engineering
Weekend.
The main administrative offices are based in Geneva, Switzerland with a global
presence in Antwerp, Tel Aviv, London, New York, Chicago, Dubai, Mumbai, Hong
Kong, Johannesburg, Gaborone and Windhoek.
For more information, visit www.steinmetzdiamonds.com
Evans & Evans valuation parameters
The summary of the Comprehensive Valuation Report ("Valuation`) is qualified in
its entirety by the full text of the Valuation. The analyses conducted by Evans
& Evans, as described in the Valuation, should be considered as a whole. To
focus on specific portions of each analysis and of the factors considered,
without considering all analyses and factors, could create an incomplete and
misleading view of the processes underlying the Valuation.
In connection with the preparation of the Valuation, Evans & Evans relied upon
financial and other information, data, advice, opinions and representations
obtained by Evans & Evans from public sources or provided to Evans & Evans by
Rockwell or otherwise pursuant to the engagement of Evans & Evans. The
Valuation is conditional upon the facts or representations that were relied
upon. Subject to the exercise of their professional judgment and except as
expressly described in the Valuation, Evans & Evans did not attempt to verify
independently the accuracy or completeness of any such information, data,
advice, opinions or representations.
The Valuation has been prepared on the basis of securities markets as well as
economic and general business and financial conditions prevailing as at June 30,
2011 and on the condition and prospects, financial or otherwise, of Rockwell as
reflected in the information and documents reviewed by Evans & Evans and as
represented by executive officers and operating management of Rockwell.
No regulatory authority has approved or disapproved the information contained in
this news release.
Forward Looking Statements
Except for statements of historical fact, this news release contains certain
"forward-looking information" within the meaning of applicable securities law.
Forward-looking information is frequently characterized by words such as "plan",
"expect", "project", "intend", "believe", "anticipate", "estimate" and other
similar words, or statements that certain events or conditions "may" or "will"
occur. 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 uncertainties and costs related to
exploration and development activities, such as those related to determining
whether mineral resources exist on a property; uncertainties related to expected
production rates, timing of production and cash and total costs of production;
uncertainties related to the ability to obtain necessary licenses, permits,
electricity, surface rights and title for development projects; operating and
technical difficulties in connection with mining development activities;
uncertainties related to the accuracy of our mineral resource estimates and our
estimates of future production and future cash and total costs of production.
In particular there can be no assurance that refinancing funds will be available
to Rockwell on acceptable terms or any terms at all.
For further 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
21 July 2011
Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
Date: 21/07/2011 08:15:01 Produced by the JSE SENS Department.
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