Rockwell provides feedback from second quarter diamond sales

VANCOUVER, Sept. 17, 2012 /CNW/ - Rockwell Diamonds Inc. ("Rockwell" or the "Company") (TSX: RDI; JSE: RDI;) announces second quarter fiscal 2013 revenues from diamond sales before beneficiation which were down 3% compared to the same period last year but that increased by 16% from the previous quarter.

Total proceeds of US$6.8 million were generated from the sale of 5,147 carats at an average price per carat for the quarter of US$1,322 compared to US$7.0 million for the same period last year and US$5.9 million for the previous quarter. The quarterly increase is underpinned by the jump in carats that was led by the Company's diamond value management, reflecting a quarter-on-quarter increase of 30%.

Diamond sales and revenue for the Company's operational mines for the quarter ended August 31, 2012 was as follows:

** Comprising 839 carats from Saxendrift and 860 carats from Jasper

The salient features of the second quarter diamond sales are as follows:

• The Klipdam Mine achieved a 72% increase in carats sold, averaging revenue per carat of US$869. This compares favorably to the average carat value of US$550 in the previous three months and is the result of recent mining in the paleaochannel unit that yields larger, higher quality diamonds.
• Carats sold from the Saxendrift Complex, comprising Saxendrift, the Bulk X-ray plant and the newly acquired Jasper Project, increased by 7% to 1,869 carats at an average price of US$2,326 per carat. The average carat value for Saxendrift, while down on the same period last year, increased 40% from the previous quarter to US$2,419, largely due to the sale of several high quality diamonds.
• A total of 27 stones exceeding 9.80 carats in size, recovered from Saxendrift and Jasper, were sold into the beneficiation joint venture with Steinmetz Diamond Group during the quarter. This includes:
• A clean 70.55-carat white, makeable rough diamond recovered in August 2012 from the Jasper Project that fetched a price of $18,000 per carat. This diamond was sold into the Steinmetz beneficiation joint venture, under the terms of which Rockwell participates equally in the profits from the sale of the polished diamonds.
• Diamond sales from Tirisano totaled 776 carats as the mine was put on hold from July 2012 in order to right size the operation.

"Our second quarter diamond sales improved, reflecting further delivery on our strategic objectives which include optimizing our productive mines and leveraging our production profile by developing new assets," said James Campbell, CEO, Rockwell. "Klipdam showed a 72% year-on-year increase in carats sold during the second quarter, translating into a 45% increase in revenue from diamond sales. The quality and average diamond value of the stones that we recovered in August from the newly acquired Jasper Project matched Saxendrift's typical production profile. This encouraging result expands our options for the Saxendrift Complex, indicating potential to increase its economic life. We are also in the final stages of right sizing Tirisano. The rationalized processing plant at Tirisano has now been integrated into the new wet front end, in order that the mine can recover higher quality stones and make a positive contribution to our bottom line."

Regarding the diamond market, Campbell commented: "Rough and polished diamond prices corrected to more realistic levels during the quarter under review, and market activity was much healthier, compared to the same period in 2011 where trading was muted. We believe that the overall market fundamentals are more positive than they have been since 2008, which will be beneficial for diamond prices."

Notable Stones

The Company continued to produce large stones at all its operations during the second quarter with the recovery of 50 stones exceeding 10 carats:

• Klipdam produced 20 stones exceeding 10 carats, including three stones exceeding 20 carats;
• Saxendrift produced 11 stones that were larger than 10 carats, including two from the Bulk X-ray plant, with four stones exceeding 20 carats, including a 96.56-carat fancy yellow clean sawable rough diamond;
• The Jasper Project produced 18 stones exceeding 10 carats during preliminary bulk sampling in August 2012 with seven stones exceeding 20 carats, including the 70-carat rough diamond referred to above as well as a 60.15-carat mackle; and
• Tirisano produced one plus 10-carat stone.

These stones were channelled into the Company's beneficiation joint venture with Steinmetz Diamond Group, which delivers value added revenues for Rockwell's stones that are larger than 2.8 carats.

About Rockwell Diamonds:

Rockwell is engaged in the business of operating and developing alluvial diamond deposits, with a goal to become a mid-tier diamond production company.  The Company has three existing operations, which it is progressively optimizing, two development projects and a pipeline of earlier stage properties with future development potential.

Rockwell also evaluates merger and acquisition opportunities which have the potential to expand its mineral resources and production profile and would provide accretive value to the Company.

No regulatory authority has approved or disapproved the information contained in this news release.

Forward Looking Statements
Except for statements of historical fact, this news release contains certain "forward-looking information" within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements.

Factors that could cause actual results to differ materially from those in forward-looking statements include uncertainties and costs related to exploration and development activities, such as those related to determining whether mineral resources exist on a property; uncertainties related to expected production rates, timing of production and cash and total costs of production and milling; uncertainties related to the ability to obtain necessary licenses, permits, electricity, surface rights and title for development projects; operating and technical difficulties in connection with mining development activities; uncertainties related to the accuracy of our mineral resource estimates and our estimates of future production and future cash and total costs of production and diminishing quantities or grades of mineral resources; uncertainties related to unexpected judicial or regulatory procedures or changes in, and the effects of, the laws, regulations and government policies affecting our mining operations; changes in general economic conditions, the financial markets and the demand and market price for mineral commodities such and diesel fuel, steel, concrete, electricity, and other forms of energy, mining equipment, and fluctuations in exchange rates, particularly with respect to the value of the US dollar, Canadian dollar and South African Rand; changes in accounting policies and methods that we use to report our financial condition, including uncertainties associated with critical accounting assumptions and estimates; environmental issues and liabilities associated with mining and processing; geopolitical uncertainty and political and economic instability in countries in which we operate; and labour strikes, work stoppages, or other interruptions to, or difficulties in, the employment of labour in markets in which we operate our mines, or environmental hazards, industrial accidents or other events or occurrences, including third party interference that interrupt operation of our mines or development projects.

For further information on Rockwell, Investors should review Rockwell's home jurisdiction filings that are available at www.sedar.com.

SOURCE: Rockwell Diamonds Inc.