TORONTO (miningweekly.com) – South Africa-focused alluvial diamond miner Rockwell Diamonds has lifted its first-quarter output by 90% to 9 162 ct, boosted in part by the over-recovery of small diamonds from old recovery tailings at the Saxondrift Hill Complex (SHC) and rising output from royalty mining contractors operating on the Tirisano property.

At 4 362 ct of precious gems, the Toronto- and Johannesburg-listed company produced 54% more precious gems from its own operations, while royalty mining contractors accounted for 4 800 ct, up 142%.

Rockwell is currently focused on operating exclusively in the Middle Orange River (MOR) region of South Africa, where the company’s three producing mines reported a 26% rise in volumes of gravel processed to 1.13-million cubic metres, of which 703 837 m³ was mined from its own MOR operations and the balance from its royalty mining contractors operating at Tirisano and a new joint venture mining agreement at Kwartelspan.

Rockwell has agreements with independent royalty contractors processing gravel for their own risk and reward. Carats recovered are sold through the company's tender process and the company retains the responsibility for diamond security and sales and receives royalty income of 12.5% on these diamonds sold, with the balance of the revenue being paid out to the contractors.

During the three months ended May 31, Rockwell's MOR operations reported a 30% rise in carat sales and a 5% increase in the value of sales to $6.3-million. The value of sales from royalty mining contractors increased 132%, generating $2.5-million, of which 12.5%, or $312 576, accrued to the company.

Rockwell's MOR volume production increased 19% and overall, the grade was improved 59% from its three producing mines in the region. Carat output rose 89% as volumes processed at Niewejaarskraal gained momentum and provided diversification benefits, mitigating the impact of lower earthmoving availabilities at Saxendrift and a partial screen failure at SHC, which impacted on quarterly volumes at these mines. The problems had subsequently been addressed, the company said.

During the first fiscal quarter, Rockwell had recovered four diamonds larger than 50 ct each, including a high-quality yellow 103.08 ct stone. The miner said it carried forward into the second quarter a substantial inventory of 5 237 ct, including the royalty contract miners’ inventory of 2 271 ct.

“These results are underpinned by our increasingly diversified production profile in the MOR where we now have three producing MOR mines, all of which have multiple mining faces. We saw a progressive improvement in production as a result of sticking to our MOR-focused strategy during the first quarter.

“These culminated in all-time record carat production for the company during the month of May. Contributing to this milestone was the improving performance at Niewejaarskraal where we mined according to the new mine plan and completed the production ramp up,” Rockwell president and CEO James Campbell said.

These significant improvements included a reported grade of 0.57 ct/100 m³ and a first-quarter average carat value of $2 408, both in line with the mine plan.

Saxendrift's results were impacted by lower earthmoving availabilities owing to its ageing fleet, but Campbell assured investors that management was addressing this issue through a fleet renewal programme, which was now well into the implementation phase.

Volumes at SHC were affected by a mechanical breakdown of the front-end screen, which the company mitigated by processing old recovery tailings and bypassing the front end for six weeks while the equipment underwent repairs.

"Having completed the Niewejaarskraal ramp-up, we now have a steady-state monthly production throughput capacity of 340 000 m³ and are now turning our attention to delivering the remaining capacity upgrades to reach our target of 500 000 m³/m,” he said.

Improving earthmoving availabilities at Saxendrift was also expected to provide more volumes to increase the mine’s throughput by 20 000 m³/m. Management was also considering options to increase capacity at Niewejaarskraal. Operations at Wouterspan were now also on Rockwell’s radar screen.

Meanwhile, John Shelton had been appointed as the company’s new CFO, replacing Gerhard Jacobs.

Rockwell’s positive first quarter boosted its TSX-listed stock, which on Wednesday rose 14% in early trading to C$0.34 apiece.