Mr. James Campbell reports

ROCKWELL ANNOUNCES AN ACQUISITION WHICH WILL EXPAND ITS OPERATING AND RESOURCE FOOTPRINT IN THE MIDDLE ORANGE RIVER REGION OF SOUTH AFRICA

Rockwell Diamonds Inc. has entered into a conditional agreement to acquire certain alluvial diamond properties, and associated plant and equipment, from Bondeo 140 CC and its affiliates, which own and operate alluvial diamond properties, for a total consideration of $28.5-million (284.2 million rand). The assets are contiguous to Rockwell's existing properties, and will significantly enlarge its operating and resource base, thus leveraging the company's growth in the Middle Orange River (MOR) region.

The total acquisition consideration comprises $12.0-million (120 million rand) for the mineral rights and three fit-for-purpose processing plants, with such consideration payable on the closing date. The remaining $16.5-million (164 million rand), allocated to earthmoving fleet and other associated equipment, is made up of $3.9-million (38.6 million rand) to be paid to the sellers over a period of 10 months in equal instalments, and the balance relating to equipment leases and hire purchases, intended to be refinanced on similar terms with South African financial institutions, and/or current mobile fleet and equipment supply partners.

The transaction is subject to conditions precedent, including customary regulatory approvals, and the company completing a financing on or before March 31, 2015, in order to raise the $12.0-million (120 million rand) payable on the closing date. Rockwell expects that the closing will occur in second quarter 2015, subject to the satisfaction of all conditions precedent.

Rockwell has engaged Dundee Capital Markets to assist it in connection with its expected financing for part of the purchase price payable by Rockwell pursuant to the transaction.

A further detailed announcement will be provided in due course.

Commenting on the transaction, James Campbell, chief executive officer and president, said:

"We are delighted to have concluded this agreement, as it represents an exciting growth platform for Rockwell. Our executive and operational management have demonstrated their alluvial diamond production expertise during Rockwell's corporate turnaround and have the capacity to take on these additional assets. We have reviewed a number of consolidation opportunities, and the transaction met all our strategic criteria. Its assets are contiguous to our existing MOR operations, which are known for their gem-quality diamonds. We know the geology of the area. So these new assets offer economies of scale, with the potential to reduce the volatility of our quarterly production results and take us above our target of processing 500,000 cubic metres per month. It will also give us the opportunity to allocate our financial, human and intellectual capital more efficiently across a broader resource base. Furthermore, we have a long-standing working relationship with the sellers of the assets which we are acquiring, who initially brought this opportunity to the table, and we have agreed to work together in order to find additional opportunities that might benefit both parties."

All dollar figures stated herein are expressed in Canadian dollars, unless otherwise specified.

Conference call

Rockwell will host a telephone conference call on Wednesday, Jan. 7, 2015, at 10:30 a.m. Eastern Time (5:30 p.m. Johannesburg time) to discuss these results. The conference call may be accessed as follows:

             CONFERENCE CALL
Country                         Access number

Canada and Canada (toll-free)  1-855-481-5362
South Africa (toll-free)        0-800-200-648
South Africa -- Johannesburg     011-535-3600
South Africa -- Cape Town        021-819-0900
United Kingdom (toll-free)      0808-162-4061
Other countries
(international toll)           27-11-535-3600
Other countries
-- alternative                 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) on Jan. 12, 2015, and can be accessed by dialling the relevant number in an attached table and using the passcode 33798 followed by the number sign.

          CONFERENCE CALL PLAYBACK

Country                      Access number

South Africa (Telkom)         011-305-2030
United States and Canada
(toll-free)                 1-855-481-5363
Other countries
(international toll)        27-11-305-2030
United Kingdom (toll-free)  0-808-234-6771

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