TORONTO (miningweekly.com) – South Africa-focused Rockwell Diamonds is ready to deliver on its medium-term goals of building a sustainably profitable and integrated diamond business.

This after the JSE- and TSX-listed miner on Tuesday reported that it had emerged from a tough first quarter ended May 31, which saw it record a net loss of C$5.18-million, including nonrecurring items totalling C$4.9-million, compared with a C$345 000 profit in the first quarter of the prior financial year.

The company noted that its operating results for the three months had reflected the transition of the business.

Rockwell, which was focused on several alluvial diamond-producing operations in South Africa’s Middle Orange River (MOR) region, had entered a transition phase in the first quarter, taking the decision to suspend operations at Niewejaarskraal pending a review of the geological model and plant, sell its interest in Tirisano and buy the Remhoogte project, all of which had been completed.

"Rockwell has come through a challenging first quarter as we dealt with some final legacy issues and rationalised our own operations, which have been struggling with declining grades,” president and CEO James Campbell said.

Having sold Tirisano, suspended operations at Niewejaarskraal, closed the Saxendrift Hill Complex (SHC) and completed the Bondeo acquisition, Rockwell now boasted a suite of longer-life operations, including the flagship Remhoogte/Holsloot operations.

“With these assets and our own Wouterspan and Lanyonvale feasibility and exploration projects, we are now able to look to the future and deliver on our medium-term objectives of building a sustainably profitable and integrated diamond business,” Campbell said.

Revenue of C$9.2-million for the quarter ended May was down 39% year-on-year, as diamond sales were impacted by lower output at Niewejaarskraal and SHC and the Tirisano disposal. Beneficiation revenues decreased by 83% year-on-year, as the revenue for the first quarter of the prior year had included the sale of an exceptional 109 ct polished diamond.

Production costs decreased from C$11.3-million in the first quarter of the prior year to C$10.9-million in the period under review, reflecting lower costs, owing to suspending activities at Niewejaarskraal and SHC. The impact of these suspensions was a reduction in costs of C$3.2-million, compared with the first quarter of the prior year, net of nonrecurring closure costs of C$900 000. Costs at Saxendrift rose by C$3.5-million, however, owing to increased mining activity brought on by higher levels of waste stripping.

A 9% increase in the average price per carat sold to $1 432 provided little respite for the company. Rockwell said there was no expectation of price increases in the short term.

The company’s TSX-listed stock on Tuesday edged higher to close at C$0.24 apiece, having shed 18% in value since the start of the year.