After surviving a hostile bid by Pala Investments in 2008 and then a recession that forced it to put one of its operations on care and maintenance, Rockwell Diamonds (RDI-T) signalled last March that it was no longer in survival mode with the acquisition of Etruscan Resources’ Tirisano (Blue Gum) project in South Africa.
There was more change on the agenda for the alluvial diamond producer in December, when company CEO John Bristow resigned as part of a restructuring at the management level.
Jeffrey Brenner, manager, diamond marketing and sales for Rockwell, says the change was a long time coming and that he anticipated a new chief executive would be named by the end of April.
“Within the board, we realized we needed a new CEO to move Rockwell into the next stage of our existence,” Brenner says.
“Within the next five years, we want to get to producing up to 10,000 carats a month. To take us from 2,500 carats a month to 10,000, we need some real technical skills and some corporate leadership.”
Brenner added that the company’s focus is on extracting the value from its operations for Rockwell shareholders.
Rockwell’s current production comes from three alluvial operations in South Africa’s North Cape Province: Holpan, Klipdam and Saxendrift.
Work is already under way to bring Tirisano, which was put on care and maintenance in late 2008 because of plunging diamond prices, online by the end of the year.
Brenner says the operation, which is roughly double the grade of Rockwell’s other operations, will probably double the company’s production. The company is commissioning a new, four-stream plant at the project. Tirisano, which is located in the Ventersdorp region, holds indicated resources of 25 million cubic metres grading 2.37 carats per 100 cubic metres.
Rockwell will be looking to raise roughly $35 million before the end of June, Brenner says, likely through a private placement. About $4.5 million will go towards mine planning and other work at Tirisano, with some of it also going to pay down some of the company’s debt. But the biggest chunk of the funds (around $17.5 million) would go toward building a new plant at the company’s Wouterspan operation in South Africa, put on care and maintenance in early 2009. Brenner says the plant at the low-grade operation didn’t get even throughput. Rockwell is aiming for a 2012 restart at Wouterspan.
In its latest financial results for the quarter ending November 2010, Rockwell announced revenues were up 44% from the previous quarter to $16.4 million. The average price per carat sold also increased to US$1,566 from US$1,048 in the previous quarter. Prices for the nine months ending in November averaged US$1,345 per carat, up from US$969 for the same period of the previous year.
The company also increased production to 22,519 carats for the nine-month period from 19,920 carats in the previous comparable period.
From March to November, Rockwell recovered 19 diamonds weighing 50 carats or more.
The company posted a loss of $1.4 million for the quarter and $2.4 million for the nine months ending Nov. 30, 2010.
Heavy rain and flooding at Holpan and Klipdam shut down production for five days in January, and caused minor infrastructure damage. Production at Saxendrift, in the Middle Orange River region, also saw a temporary drop because of heavy rain, although there was no damage to the operation.
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