| Mon 19 Mar 2012, 14:40 | | RDI - Rockwell Diamonds Incorporated - Restructure of BEE transaction with |
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RDI
RDI
RDI - Rockwell Diamonds Incorporated - Restructure of BEE transaction with
AVR and acquires new mine as part of the agreement
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
("Rockwell")
ROCKWELL RESTRUCTURES ITS BEE TRANSACTION WITH AVR AND ACQUIRES NEW MINE AS
PART OF THE AGREEMENT
March 19, 2012 Vancouver, BC - Rockwell Diamonds Inc. ("Rockwell" or the
"Company") (TSX: RDI; JSE: RDI; OTCBB: RDIAF) is pleased to announce that it
has reached an agreement with Africa Vanguard Resources ("AVR") on a way
forward with respect to the Company`s Northern Cape operations which
includes an agreement to acquire AVR`s Jasper Mine property. The Jasper Mine
property is contiguous to Rockwell`s Saxendrift Mine and has the potential
to extend the life of Saxendrift with limited new investment.
As required by South African law, Rockwell entered into an arrangement with
AVR to permit them to purchase a 26% interest in the Company under the Black
Economic Empowerment (`BEE`) legislative provisions. The management of
Rockwell has been in recent ongoing discussions with AVR regarding the
replacement of the vendor funding provided by Rockwell to AVR relating to
the acquisition by AVR of 26% of HC Van Wyk Diamond Group ("VWDG") and
Saxendrift Mine (Pty) Ltd in 2008, the Rockwell subsidiaries which hold the
Company`s Northern Cape operations and projects. As part of the agreements,
AVR paid an amount of $2.9 million (ZAR22.5 million) with the balance of
$7.9 million (ZAR61.6 million) still owing to Rockwell.
The restructured agreement includes a payment to AVR by Rockwell of $1.9
million (ZAR15 million). This payment will be in the form of Rockwell
shares, listed on the JSE Limited. AVR has undertaken not to trade these
shares for a period of one year. Incorporated into the settlement
arrangements is the acquisition by Rockwell of the Jasper Mine property from
AVR ("the transactions"). The completion of these transactions is subject to
various conditions precedent, including the completion by Rockwell of a due
diligence investigation, regulatory approvals and obtaining approval from
the DMR with respect to certain parts of the transaction. The deadline for
the fulfillment of the conditions precedent is December 31, 2013, extendable
by mutual agreement between the parties.
Preliminary estimates indicate that the past producing Jasper Mine, which is
a brownfield opportunity, has remaining diamond-bearing deposits that are
easily accessible to the infrastructure at the Saxendrift Mine and could
extend the life of Saxendrift Mine mine, which is currently three years.
The restructure and unwinding of the AVR transaction on an asset level will,
subject to the conditions precedent being fulfilled, provide Rockwell with
the opportunity to enter into a new BEE partnership and will also retain AVR
as a meaningful shareholder in Rockwell. The Company is actively pursuing
discussions with several BEE entities, who have indicated their interest to
partner with Rockwell in a value creating transaction. In compliance with
the requirements of the Mining Charter, AVR`s shares will be transferred to
the new BEE partner once a suitable transaction is concluded.
Commenting on the settlement with AVR, Mark Bristow, Chairman of Rockwell
said that: "the Rockwell management team has negotiated a settlement which
provides for both parties to deal with their own short term challenges
whilst simultaneously giving Rockwell the ability to comply with its BEE
objectives and growth plans on a commercial basis. Having resolved one of
the last remaining legacy issues impacting the Company the management team
will be able to spend more time on its diamond value management strategy
which is a key driver to delivering on its short and medium plans to create
value for all its stakeholders."
"This is another step in our journey to create an intermediate value driven
diamond business. Our ongoing engagement with several potential BEE partners
who share our vision and strategic objectives give us confidence that we
will be able to forge a partnership that will add value to our business
going forward," said James Campbell, CEO, Rockwell.
For further information on Rockwell and its operations in South Africa,
please contact
James Campbell
CEO
+27 (0)83 457 3724
Stephanie Leclercq
Investor Relations
+27 (0)83 307 7587
Legal Advisor to Rockwell
Falcon & Hume Inc
7 Eaton Road
Sandhurst
Tel +27 11 669 7670
Corporate Advisor to Rockwell
Allan Hochreiter (Pty) Ltd
4 Fricker Road
Illovo
Tel +27 11 268 5847
Sponsor to Rockwell
Sasfin Capital (a division of Sasfin Bank Limited)
Johannesburg
20 March 2012
Date: 19/03/2012 14:40:40 Produced by the JSE SENS Department.
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