Rockwell Diamonds' revenues increase in third fiscal quarter

Junior mining firm Rockwell Diamonds has posted increased revenues from diamond sales for the fourth consecutive quarter in the third quarter of fiscal 2013.

The firm, with operations in South Africa, posted diamond sales of$7.4 million, up 23 percent from the third quarter of the previous year.

Including beneficiation revenues of $1.6 million in the third quarter, the company reported total revenue of $8.8 million.

The miner said that beneficiation revenues recovered well after a slow second quarter that had been characterized by particularly slow trading in the northern hemisphere summer.

The firm says it has carried over an inventory of 2,704 carats into the fourth quarter to "take advantage of any possible restocking trend".

It adds that the beneficiation pipeline, comprising some 5,500 carats "provides further potential for valued added downstream revenues".

Total cash costs increased 37 percent from the second quarter to $9.6 million. This led the company to optimize Klipdam, including the introduction of a contract miner at a fixed unit cost, and to place the operations of Tirisano on care and maintenance after the management team had explored all possible avenues to operate the mine profitably using the existing infrastructure.

The firm reported a 10-percent rise in sales volume from the Saxendrift operation to 1,931 carats at a significantly improved average price of $3,082 per carat versus $1,892 per carat a year ago.

Of significant benefit was the sale of a 145-carat rough diamond recovered from old Saxendrift recovery tailings which sale increased the average price per carat from the Bulk X-ray plant to $10,704.

Carats sold from Klipdam declined 25 percent for the quarter to 1,490 carats with a slightly lower average value of $660 per carat.

The grade was down 25 percent on the quarter as mining moved out of the high-grade portion of the channel.

Diamond sales from Tirisano totaled 214 carats, significantly under budget.

Outlook for 2013

The company said it is optimistic that with improving diamond prices since the beginning of November 2012 after prices declined by 15-20 percent in the first half of the 2012 calendar year, the market is positioned to increase by a few percent in 2013.

"This view is supported by good interest at the Hong Kong show in November 2012 and increased attendance at open market tenders," the firm says in a statement. "Reflecting this trend, Rockwell also experienced higher attendance at its closing tenders for 2012 supporting higher prices and providing some evidence of a more stable market than in previous years."

The company started the fourth quarter with 2,704 carats in inventory, positioning it to take advantage of any possible restocking trend. In addition, inventory in the beneficiation joint venture with Steinmetz Diamond Group of more than 5,500 carats, creates upside potential for further value-added revenue for Rockwell.

The miner has developed a blueprint for the construction of new processing plants at its high potential projects in the Middle Orange River region, based on the success of the fit-for-purpose technologies, including the in-field screen, Bulk X-ray and single particle sorter plant implemented at Saxendrift.

Initiatives to increase and extend the mine life of Rockwell’s Middle Orange River properties include the construction of a new mine at the Saxendrift Hill complex, utilizing Bulk X-ray technology with a monthly processing capability of 100,000 m3 and the pre-feasibility study for Wouterspan is progressing on schedule.

Possible developments during calendar 2013 include installing an in-field screen at the Saxendrift Extension project and assessing the development of a mine similar to the Saxendrift Hill complex at the company’s Niewejaarskraal project.