Rockwell recovers 100+ct. diamonds

Shares of Rockwell Diamonds (TSX: RDI; US-OTC: RDIAF) climbed after the company found four diamonds weighing more than 100 carats each from its Middle Orange River projects in South Africa’s Northern Cape province.

After announcing the discoveries on Sept. 17, Rockwell jumped 45% to close at 42¢. It added another 15% a day later to end at 48.5¢.

Of the four, Rockwell unearthed two stones weighing 126 carats and 169 carats from a new mining area at its Saxendrift Hill complex. The other two — 116 and 138 carats — were recovered from gravels at the Saxendrift extension pit.

The Vancouver-based producer said it retrieved more than the usual number of smaller diamonds, validating its strategy to refocus on  Middle Orange River and adopt new processing methods. The recently commissioned Saxendrift processing plant uses X-ray technology in the concentration and recovery area.

London-based analyst Ryan Long at Northland Capital Partners writes that “the company would normally only recover a stone of this size once or perhaps twice every year — so to have recovered four in just three weeks is an excellent result.”

Rockwell has retrieved more stones weighing between 20 and 100 carats since commissioning Saxendrift Hill and the Niewejaarskraal project, along with including the Saxendrift extension into Saxendrift’s mine plan.

Recently installed bulk X-ray sorters at its Middle Orange River projects have also helped, Long says, adding that the company expects a  “positive impact on the average price per carat and revenue for the rest of the financial year.”

Rockwell is growing production from the region to 500,000 cubic metres a month to improve quarterly earnings.

All the stones exceeding 2.8 carats would be sold into the beneficiation joint venture with the Steinmetz Diamond Group at market value, after which Rockwell would participate equally in the profits of the polished diamonds.