Mr. James Campbell reports

ROCKWELL ANNOUNCES FILING OF PRELIMINARY SHORT FORM PROSPECTUS

Rockwell Diamonds Inc. has filed a preliminary short-form prospectus in all provinces of Canada other than the province of Quebec in connection with a proposed offering of subscription receipts of the company for minimum gross proceeds of $15-million and maximum gross proceeds of up to $20-million, to be priced in the context of the market. Each subscription receipt will entitle the holder thereof to receive one unit of the company, without payment of additional consideration or further action, upon satisfaction of certain release conditions set out in the preliminary short-form prospectus. Each unit will comprise one common share of the company and a portion of a common share purchase warrant on terms to be determined in the context of the market.

Dundee Securities Ltd. will act as the lead underwriter in respect of the offering.

The company has also granted the underwriter an overallotment option to purchase such number of subscription receipts as is equal to an additional 15 per cent of the subscription receipts purchased under the offering, or if the acquisition (as defined below) has been completed at the time of the exercise, an equal number of units, exercisable in whole or in part at any time not later than the earlier of (i) the 30th day following the closing date for the offering, and (ii) the occurrence of a termination event (as defined below).

On each of Jan. 6, 2015, and Feb. 5, 2015, the company issued a press release relating to its conditional agreement to acquire certain alluvial diamond properties, and associated plants and equipment from Bondeo 140 CC and its affiliates for an aggregate purchase price of 284.2 million South African rand (approximately $30.9-million). The purchase price consists of: (i) 120 million South African rand (approximately $13-million) for certain mineral property rights and three processing plants, payable on the closing date of the acquisition, which will be paid using a portion of the net proceeds of the offering; and (ii) the remaining 164 million South African rand (approximately $17.8-million) for the earth-moving fleet and other associated equipment, will, in the event the maximum offering is not achieved or pursued, be satisfied as follows: (a) 125.4 million South African rand (approximately $13.6-million), which is payable on the acquisition closing date, is expected to be financed by the company by additional financing options, including additional debt instruments to be entered into on or prior to the acquisition closing date; and (b) the company will pay the remaining 38.6 million South African rand (approximately $4.2-million) plus interest accruing at 6 per cent (nominal annual interest compounded monthly) in equal monthly instalments over a 10-month period after the acquisition closing date.

The company will use a portion of the net proceeds of the minimum offering toward financing the 120-million-South-African-rand (approximately $13-million) portion of the purchase price. The remaining net proceeds of the minimum offering will be used by the company to cover additional costs related to the acquisition and for general working capital purposes.

The assets being acquired pursuant to the acquisition are contiguous to Rockwell's existing properties, and will enlarge its operating and resource footprint in the Middle Orange River region. The company believes that the acquisition will contribute to its growth strategy in the MOR region, increase its scale, cash flow and earnings per share, and improve the company's long-term cash position.

Upon closing of the offering, the gross proceeds from the sale of the subscription receipts (including the exercise of the overallotment option, if any) less the expenses of the underwriter in connection with the offering and one-third of the commission to be paid to the underwriter, will be deposited with and held by Computershare Trust Company of Canada, as escrow agent, and invested in short-term obligations of, or guaranteed by, the government of Canada (and other approved investments), pending satisfaction of the release conditions. Upon satisfaction of the release conditions, the subscription receipts will automatically be converted into units, without payment of additional consideration or further action on the part of the holders.

In the event that: (i) the release conditions are not satisfied on or prior to a date to be determined by the company and the underwriter; or (ii) prior to the release deadline the company advises the underwriter or announces to the public that (a) it does not intend to satisfy the release conditions or (b) the release conditions are incapable of being satisfied by the release deadline, then the escrow agent shall return to the holders of the subscription receipts an amount equal to the escrowed proceeds held by them and their pro rata share of interest earned on the escrowed proceeds. The company shall be responsible and liable to such holders of the subscription receipts for the amount that is equal to the expenses of the underwriter in connection with the offering, and one-third of the commission paid to the underwriter, including interest thereon.

We seek Safe Harbor.