JOHANNESBURG (miningweekly.com) – South Africa-focused miner Rockwell Diamonds had all the necessary permits and resources in place to achieve its eventual target of processing 500 000 m³ of quality gravels a month, with production expected to rise to 360 000 m³ a month at the end of the current calendar quarter, Rockwell CEO James Campbell said on Friday.

The company saw expansion potential at its Niewejaarskraal and Saxendrift operations, while the preliminary economic assessment for its Wouterspan project had been completed last year, indicating production potential of up to 350 000 m³ a month, he explained, adding, however, that this project would require further funding.

Campbell further told Mining Weekly Online that the company’s results for the three months ended November 30, had been in line with achieving the targeted production, adding that the success that had been achieved was owing to the company exiting its lossmaking Tirisano and Klipdam properties, while focusing strongly on the Middle Orange River (MOR) region.

During the quarter, Rockwell had narrowed its net losses and increased its revenue by 35% year-on-year.

Rockwell recorded a net loss of C$400 000 during the third quarter of the 2014 financial year, a significant improvement on the loss of C$4.7-million recorded during the prior corresponding period, while the company’s revenue had increased to C$11.9-million for the quarter under review.

Diamond sales accounted for C$11.2-million and beneficiation for C$600 000 of the overall revenue.

“When we started our MOR strategy at the beginning of last year, aimed at achieving production of 500 000 m³ a month, it was designed around achieving quarterly earnings stability, and [that has now] flowed through to the bottom line with six consecutive quarters of revenue growth and our second consecutive quarter of an operating profit.

“There is still some way to go in terms of the turnaround, but I am fairly satisfied with the progress we are making,” he said.

Campbell further pointed out that volumes processed from Rockwell’s three MOR mines increased by 65% from a year ago, with carat recoveries more than doubling as the average grade increased by 27%, all of which were a direct result of the MOR focus.

The company’s Saxendrift operation continued to perform well during the quarter under review and was benefitting from the acquisition of the Saxendrift extension property, with its longer mine life and higher grades.

The project’s processing plant recovered 3 164 ct during the quarter under review – a 29% increase on that recovered during the prior corresponding period.

“At Saxendrift Hill Complex (SHC), our new internally funded mine in the MOR, the bulk X-ray plant is now in full production at a rate of 80 000 m³ a month. It recovered 1 579 ct, with sales of 1 106 ct of consistently high-valued carats at an average value of C$3 354/ct for total proceeds of C$3.7-million,” Campbell said.

Further, the first phase newly commissioned Niewejaarskraal plant was handed over to operations on September 1, with production ramp-up continuing.

“Achieved grade at the start-up was lower [than expected] owing to mining being restricted to an adjacent property while renegotiating the surface rental agreement covering the principle reserves. Nevertheless, four diamonds exceeding 10 ct were recovered and mining has now moved on to the main section of the property," he said.

FUTURE PLANS
During the fourth quarter of the 2014 financial year, Rockwell would specifically be focusing on ramping up the Niewejaarskraal operation, Campbell indicated.

“We have delivered Phase 1, taking the project up to 60 000 m³ a month in production, with the construction for Phase 2, which would take production up to 100 000 m³ a month to be completed by the end of February, after which we have to [en]sure that it is rapidly handed over to operations,” he said.

Meanwhile, at Saxendrift, the company was undertaking a detailed earthmoving vehicle fleet optimisation exercise to improve earthmoving availability, while also evaluating ways to increase the plant's capacity.

“In order to extend the life of our MOR properties, we are conducting contiguous exploration at Saxendrift and SHC, which is aimed at both extending and enhancing the quality of the resource.”

Rockwell was also considering market consolidation opportunities.