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 TSXV: RDI
CUSIP Number: 7743W103
(“Rockwell”)
Rockwell’s fourth quarter performance shows positive progress on the back of recent strategic and operational review and subquent restructuring哪个国家人口最多
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May 30, 2016, Vancouver, BC -- Rockwell Diamonds Inc. ("Rockwell" or the "Company") (TSX:RDI; JSE:RDI) announces results for the three and twelve months ended February 29, 2016.
Currency values are prented in Canadian dollars, unless otherwi indicated.
Salient features
During the quarter, Rockwell continued to implement key decisions flowing from the recent strategic and operational review. The new, de-layered reporting structure has already reduced ongoing overhead costs. The deferred closure of Saxendrift is delivering substantial savings on the initially estimated closure costs.
Rockwell’s financial results reflect a reduction in operational loss in the quarter trending to cash breakeven following the annual Christmas operations shutdown.
The Group has repaid $6.1 million of long-term debt (relating to the Bondeo acquisition) over fiscal 2016.
C onsolidated average cash operating costs for the Middle Orange River (“MOR”) operations stood at US$9.1
per m3, down 18% year-on-year and 12% on the previous quarter of fiscal 2016.
Construction work on the WPC processing plant is in progress to deliver a plant and in-field screening capable of processing 200,000m3 per month during the third quarter of fiscal 2017; ramp-up will commence towards the end of June.
FINANCIAL HIGHLIGHTS
Average MOR grades were up 76% on Q4 F2015, and 25% on Q3 F2016 to 0.60 carats per 100m3 of gravel procesd, reflecting the expected results of the Remhoogte –Holsloot (“RHC”) acquisition. MOR revenues were up 40% quarter-on-quarter.
Exploration work continued on properties adjacent to Wouterspan. Detailed rever circulation drilling and bulk sampling also commenced at RHC to define the economic potential of Palaeo gravels on the property. A continued focus on safety has led to Saxendrift and RHC achieving over 600,000 lost time injury free hours
to date.
Commenting on the fourth quarter financial performance, James Campbell, CEO and President said:
“This quarter concluded a year that saw Rockwell repositioning itlf fundamentally by reducing overhead cost, lling the non-core Tirisano ast outright, completing the closure of NJK, bringing Saxendrift clor to closure and acquiring two new mines with a third in construction.二月初二是什么日子
The results of the NJK closure, the reducing economics of Saxendrift and the underperformance of RHC impacted our working capital negatively during the year. A more favourable debt repayment me
chanism negotiated for the RHC acquisition will improve our liquidity and allow us to invest in exploration and development projects in the months ahead.
Looking at the year and the quarter, we recorded a significant improvement at a trading level. Our average cash operating cost continued to trend down by 18% to US$9.1 per m3 and improved carat recoveries over Q3 with better prices, coupled with the benefit of a weaker Rand, resulted in a reduction in operating loss in the quarter.
In the months ahead, as construction progress at Wouterspan and the additional in-field screening capacity at RHC stabilis, we will continue to scrutini our mining efficiencies and address any residual process deficiencies and bottlenecks. Although we have not yet been able to achieve our strategic goal to process 500,000m3 of gravels per month from our MOR operations, we expect to be back at 350,000 m3 per month before the end of fiscal 2017. The diamond market is beginning to show signs of recovery thanks to a combination of midstream restructuring and supply constraints and it is our objective to be able to capitali on the improvements as we deliver on our revid strategic objectives.”
Financial review
Revenue:The Group reported a 35% drop in rough diamond revenues at $10.2 million (Q4 F2015: $15.6 million) and beneficiation revenue of $0.2 million (Q4 F2015: $1.5 million). Total revenues decread 39% to $10.4 (Q4 F2015: $17.1 million), due to the exclusion of goods sourced from Tirisano contract miners, and a decline in the per carat value of goods from Saxendrift as this operation comes to the end of its economic life.
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Production Costs: The Group’s consolidated average cash operating costs for the fourth quarter at its MOR operations was US$9.13 (Q4 F2015: US$11.2) per cubic metre procesd. The average total cash cost
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(including royalty payments) for all the operations for Q4 F2016, amounted to US$12.83 per cubic metre procesd (Q4 F2015: US$13.21).
Cost of sales before amortization and depreciation decread to $10.7 million (Q4 F2015: $20.2 million), mainly due to the impact of no further goods being sourced from Tirisano contract mining, and operational efficiencies resulting from the closure of NJK and Saxendrift Hill Complex at the end of the last financial year. Gross (loss) profit before amortization and depreciation: A loss of $236,000 was reported by the Group for Q4 F2016, which compares to a loss of $5.1 million for Q4 F2015. Wh
ilst MOR carats sold were up 10% on the previous year, revenue per carat decread to US$1,468 (Q4 F2015: US$2,461) mainly due to lower value diamond recoveries at Saxendrift.
Loss attributable to owners of the parent of $17.4 million (2015: $8.2 million) was driven mainly by the impact of non-cash charges such as impairments and accelerated depreciation relating to certain unusable plant and equipment at NJK.
Net cash position: At February 29, 2016 the Group had net cash and cash equivalents of ($1.3) million overdraft (Q4 F2015: $0.6 million in cash), having recorded a net reduction of $1.9 million associated with the rvicing and repayment of long-term debt. The Group has repaid $6.1 million of long-term debt over fiscal 2016. It has also reduced its overdraft limit by $1.0 million over the same period.
Middle Orange River (“MOR”) operating performance:Volumes mined from Rockwell’s MOR operations during the quarter totalled 0.8 million m3 (Q4 F2015: 1.2 million m3); this is down 32% year-on-year, due to the reduction of operations at Saxendrift and the shutdown of NJK. Gravel procesd was 40% down year-on-year at 0.8 million m3 (Q4 F2015: 1.3 million m3), owing to the diminished operational profile following the sale of Tirisano, the suspension of activities at Niewejaar
skraal and the winding down of Saxendrift operations. The effect of the closure of NJK was largely offt by new volumes procesd at Remhoogte - Holsloot Complex
Current uncertainties: The auditor’s unqualified opinion includes a reference to Note 1.2 in the audited financial statements which outlines the company’s basis of prentation as a going concern. The Note disclos two uncertainties, namely the completion of the new mining strategy and the timely ramp-up of Wouterspan, either of which may have a material impact. The mining strategy is expected to be put into effect with an executed contract in the next four weeks, while the Wouterspan plant ramp-up is expected to commence shortly thereafter. At prent, the Company expects the uncertainties to clear as they are both under the control of management, and will provide further disclosure on the developments as events warrant.
Market update
The diamond market stabilid during the fourth quarter of fiscal 2016, after a challenging year that saw De Beers’ sales 45% down and prices for De Beers’ and Alrosa’s goods reduced by 15%, whilst in the open market up to 30% reductions were en in rough diamond prices.
US festive ason sales were up in low percentage terms, which assisted greatly with reducing inve
ntories of polished diamonds in the pipeline. Retailers restocked in limited quantities and preferred to take goods on memo from industry rather than stress their cash flows by purchasing polished. Chine New Year sales were disappointing and overall stock levels of Chine retailers remain high. Polished prices stabilid during the quarter with some
increas being en in the prices of goods in short supply.
The rough diamond market has started 2016 on a more optimistic note, helped by smaller supply and price reductions by De Beers and Alrosa, which returned Sightholders to profitability for the first time after a long period. Factories that had reduced production by up to 50% during 2015 have recommenced manufacturing and this has created healthy demand for rough. Prices of diamonds under 10cts incread a few percent points during January and February 2016 due to pipeline restocking.
There is concern that this restocking might compound the existing oversupply of polished, which may place pressure on rough prices during the cond half of 2016.
Outlook and priorities
The re-commissioning of Wouterspan and increa of throughput at RHC remain key priorities for the Company in the short term, as it continues to pursue its strategic processing target of 500,000m3 of gravel per month.
A decision has been taken to outsource mining on a fixed pay-per-volume delivered basis. The new arrangement, which reprents a fundamental change in Rockwell’s business and operations model, will transfer the volume risks related to EMV availability to the mining rvice provider.
With screening constraints addresd, and a new mining arrangement soon to be implemented, RHC will be on track to deliver incread processing capacity of up to 180,000m3 of gravel per month shortly.
Rockwell remains focud on rebuilding its MOR production profile and delivering new growth opportunities. The Company continues to evaluate new projects and value accretive consolidation opportunities.
Exploration efforts to identify new value opportunities with potential to add to the Company’s resources will continue on the properties surrounding Wouterspan.
Rockwell’s focus will remain firmly on safety, and particularly on avoiding the risk of complacency as significant safety milestones are achieved.
Priorities for fiscal 2017 include:
Ramp-up of production at Remhoogte - Holsloot
Construction and commissioning of the processing plant at Wouterspan
Conclusion of a new mining contract怎样和孩子沟通
Closure of Saxendrift and redeployment of staff and equipment to Wouterspan
Realisation of further cost-savings flowing from recent restructuring
做月饼的过程Conference Call:
Rockwell will host a telephone conference call on Friday, June 3, 2016 at 09: Eastern Time (15: Johannesburg / 14: London) to discuss the results. The conference call may be accesd as follows:
Country Access Number
Canada and USA (Toll-Free) 185****5362
South Africa (Toll-Free) 0 800 200 648
South Africa – Johannesburg 011 535 3600
South Africa – Cape Town 021 819 0900
UK (Toll-Free) ***********
Other Countries (Intl Toll) +27 11 535 3600对父亲说出我爱你
Other countries – Alternate +27 10 201 6800
A transcript of the audio webcast will be available on the Company's website: The conference call will be archived for later playback until midnight (ET) June 7, 2016 and can be accesd by dialling the relevant number in the table below and using the pass code 49744#.
Country Access Number
South Africa (Telkom) 011 305 2030
Canada and USA (Toll Free) 185****5363
Other Countries (Intl Toll) +27 11 305 2030
UK (Toll-Free) ***********
For further details, e Rockwell’s complete financial results and Management Discussion and Analysis posted on the website and on the Company's profile at The include additional details on production, sales and revenues for the quarter, as well as comparative results for fiscal 2015.
For further information on Rockwell and its operations in South Africa, plea contact
James Campbell CEO+27 (0)83 457 3724
David Tosi PSG Capital – JSE Sponsor+27 (0)21 887 9602
About Rockwell Diamonds:
Rockwell is engaged in the business of operating and developing alluvial diamond deposits. The Company also evaluates consolidation opportunities that have the potential to expand its mineral resources and production profile and provide accretive value to the Company.
Rockwell is known for producing large, high quality gemstones comprising a major portion of its diamond recoveries. This is enhanced through a beneficiation joint venture that enables Rockwell to participate in the profits on the sale of the polished and certain re-traded diamonds, which are not beneficiated.
Rockwell has t a strategic goal to become a mid-tier rough diamond production company. In pursuit of this goal the Company has embarked on a strategy to grow its Middle Orange River (MOR) operational ba and minimi production and recovery volatility by tting a medium term target to process 500,000m3 of gravels per month from its MOR operations.
