Rockwell provides production update for first quarter of fiscal 2014 ending May 31, 2013

VANCOUVER, July 4, 2013 /CNW/ - Rockwell Diamonds Inc. ("Rockwell" or the "Company") (TSX: RDI; JSE: RDI) today presents a quarterly operational update in line with the Group's strategy. On a consolidated basis, first quarter processed gravel volumes increased by 11% to 893,833m³ year-on-year while diamond production was 33% lower at 4,824 carats, both results inclusive of contractors. The reduction in carat production is mainly the result of the operations at Tirisano being placed on care and maintenance in December 2012 and the sale of Klipdam at the end of March 2013. The production and carat recovery of Saxendrift was consistent, including the recovery of nine stones exceeding 20 carats. The royalty mining contractors operating at the Tirisano property gained momentum with the production of 1,984 carats and the first diamonds were also recovered from the newly commissioned Saxendrift Hill Complex Mine during the quarter.

First quarter operational update:

Volume and carat production for the Company's operational mines for the quarter ended May 31, 2013 was as follows:

Saxendrift operations and Middle Orange River Prospects:

• Quarterly volumes of gravel processed at the Saxendrift Mine, all mined at the traditional mining area (Brakfontein), showed a marginal increase of 2% to 461,184m³. The recorded grade of 0.44 carats / 100m³, down from 0.47carats / 100m³ in the prior year, was within the anticipated range for the mine. Carat recoveries for the quarter totaled 2,036 carats, compared to 2,126 carats in the quarter ended May 31, 2012. The mine's production in April 2013 was particularly good, with the recovery of nine stones exceeding 20 carats, of which four exceeded 50 carats.
• Production ramp up of the Saxendrift Hill Complex mine, based on two Bourevestnik X-ray bulk sorters and two single particle sorters, continued. During this ramp up phase, 269 carats were recovered from 129,427m³ of gravel processed. This is in line with Rockwell's strategy to mine the two-year resource on a block basis, with mining in the first quarter being predominantly in a lower grade block. Several high quality diamonds were recovered.
• The Company continues to make good progress with its other development projects in the Middle Orange River region as follows:
  • Construction of the new processing plant at Niewejaarskraal Mine is on track and wet commissioning took place early in the second quarter. Management anticipates that the mine will be ramped up to full production within three months.
  • The results of the preliminary economic assessment for Wouterspan showed viable economics and the Company is currently reviewing options to bring this asset to account.
    
    

Klipdam:

• Production at Klipdam amounted to 535 carats from 65,702m³ of gravel processed until the sale agreement for the mine was concluded at the end of March 2013. This represents a grade of 0.81 carats per 100m³, down 32% from the comparable quarter in fiscal 2012.
• In March 2013, the Company accepted an unsolicited cash offer to sell Klipdam for $2.6 million based on the rationale that the mine was considered non-core and the sale proceeds could be better applied to increase production from Rockwell's Middle Orange River properties.
  
  

Royalty Mining

• Three royalty mining contracts were in effect on the Tirisano property during the first quarter, worked by two privately owned alluvial diamond mining operators.
• A total of 1,984 carats were recovered from 237,520m³ of gravel processed.
• With two additional contracts awarded, monthly production volumes from the Tirisano royalty mining contracts are set to increase to 150,000m³ by the end of calendar 2013.
• A further contract for Rockwell's Zwemkuil property, in the Middle Orange River region, has been finalized and projected monthly volumes of 50,000m³ will commence in the second quarter.
  
  

"Rockwell's operational performance for the first quarter of fiscal 2014 reflects the transition of the Company as we have narrowed our focus on growing the production profile, from specific footprints that deliver better efficiencies and greater economies of scale. Our first such footprint is the Middle Orange River region," explains James Campbell, CEO and President of Rockwell Diamond. "We have a track record of profitably operating mines in this region which traditionally yields high value gem quality diamonds. The operations at Saxendrift Hill Complex are gaining traction while the Niewejaarskraal operations are being commissioned within three months of presenting the project proposal to the board, a performance milestone for the Company. We are positioned to have three producing mines in the Middle Orange River region by the end of the calendar year. These operations will have a total monthly processing capacity of 370,000m³ against our mid-term objective of 500,000m³. Meanwhile, we are pleased that our three royalty mining contracts at Tirisano delivered the anticipated production during the quarter and we look forward to a positive financial contribution as the two additional contracts come on stream with a total monthly production target of 150,000m³."

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's flagship mine is the Saxendrift Mine, in the Middle Orange River and the Saxendrift Hill Complex, which will come into production in the first quarter of fiscal 2014. Rockwell also has two development projects and a pipeline of earlier stage properties with future development potential. The operations are based on high throughput processing capability and Saxendrift has among the lowest unit costs in the industry as a result of implementing fit for purpose technologies.

The Company is known for producing large, high quality gemstone comprising a major portion of its diamond recoveries that is enhanced through a beneficiation joint venture that enables it to participate in the profits on the sale of the polished diamonds.

Rockwell also evaluates merger and acquisition opportunities which have the potential to expand its mineral resources and production profile and to 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 if 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 as 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.

For further information on Rockwell and its operations in South Africa, please contact

James Campbell 
CEO  
+27 (0)83 457 3724

Stéphanie Leclercq 
Investor Relations  
+27 (0)83 307 7587