Mr. James Campbell reports

ROCKWELL PROVIDES PRODUCTION UPDATE FOR FIRST QUARTER OF FISCAL 2012 ENDING MAY 31, 2012

Rockwell Diamonds Inc.'s volumes of gravel processed in the first quarter increased 56 per cent year on year, with a 74-per-cent improvement in carat production from the three operational mines over the same period to 6,116 carats. Overall volumes processed continued to track closer to the company's internal targets while budgeted carat recoveries were exceeded as the bulk X-ray proof of concept plant introduced earlier in the year contributed 1,118 carats in the last six weeks of the quarter.

First quarter operational update

The volume and carat production for the company's operational mines for the quarter ended May 31, 2012, is in the attached table.

                     Volumes of gravel processed (m3)    Carats produced    

                         Q1 2012   Q1 2013   % change Q1 2012 Q1 2013 % change

Saxendrift               325,076   453,204        39%   1,693   2,126    26%
Saxendrift bulk X-ray          -         -          -       -   1,118   100%
Tirisano                       -   123,048       100%       -   1,222   100%
Klipdam                  194,192   232,216        20%   1,832   2,768    51%
Total                    519,268   808,468        56%   3,525   6,116   105%

Saxendrift complex

Saxendrift achieved a 39-per-cent year-on-year increase in volumes processed to 453,204 cubic metres for the first quarter, in line with its targets, while carats produced increased 26 per cent to 2,126 carats.

The bulk X-ray plant was commissioned in April, 2012, below budget and on schedule. A total of 1,118 carats were extracted from recovery tailings during the first six weeks of operation of this proof of concept project with the largest stone recovered weighing 74 carats. The next phase of testing is progressing with the processing of additional recovery tailings.

The in field screen, commissioned in November, 2011, increased plant throughput during the first quarter. In addition, it went some way to mitigate the impact of increased sand content of the orebodies being mined.

Improving production from Rockwell's properties that are located adjacent to the Saxendrift mine is now the company's focus. This includes the additional resources acquired as part of the Jasper project purchase, which became unconditional at the end of May, 2012. Plans are also in progress to evaluate the potential of extending mining operations to other parts of the Saxendrift mine property with the objective of extending the life of this operational footprint.

The prefeasibility study for Wouterspan, scheduled for completion by the end of 2012, has commenced and is scheduled for completion by year-end.

Tirisano

Ramp up in production continues, with plant throughput volumes increasing by 30 per cent to 123,048 cubic metres in the first quarter, from 94,643 cubic metres in the fourth quarter of fiscal 2012.

Carat production more than doubled in the three months to May 31, 2012, yielding 1,222 carats compared with 557 carats in the previous three-month period. This was as a result of grade increases to 0.99 carat per 100 cubic metres, from 0.59 carat per 100 cubic metres in the quarter ended Feb. 29, 2012.

Construction of the wet front end facility which has the capability to process gravels with high clay content was completed on schedule at the end of May, 2012, and is expected to provide additional flexibility in the mine plan that was previously lacking.

Maintenance and rationalization of the earthmoving fleet have been a key focus this past quarter.

Klipdam

A year-on-year increase of 20 per cent in plant throughput to 232,216 cubic metres was due to the conversion to continuous operations, installing a new barrel screen and the removal of five conveyor belts in the front end of the production plant.

Carat production increased 51 per cent with improved grades as a result of the focus on processing the Rooikoppie gravels. The value per carat was in line with the previous quarter due to current world markets.

The appointment of a mine manager and mining manager has significantly improved the overall operation of the mine.

Commenting on Rockwell's progress in relation to its focus on diamond value management, James Campbell, chief executive officer, stated that: "In 2011, our executive management and board put in place two simultaneous strategies for enhancing shareholder value, namely to execute on our plans to optimize production at each of our operational mines and to rebuild the mine life profile of the company's assets. The results to date are showing the first positive impacts of these strategies."

We seek Safe Harbor.