JOHANNESBURG (miningweekly.com) – Dual-listed alluvial diamond miner Rockwell Diamonds has filed for business rescue, which will ensure any liquidation order is automatically stayed.
This follows after a judge in Kimberley on March 23 issued an interim liquidation order against subsidiaries Rockwell Resources RSA, HC van Wyk Diamonds and Saxendrift Mine Limited after former Rockwell contractor C-Rock Mining launched a liquidation application against the subsidiaries.
Interim liquidators have also been appointed by the Master of the High Court, in accordance with requisitions by the major creditors; however, because of the further filing by Rockwell, the interim liquidators will not take control of the three subsidiaries, which remain in operation by company personnel.
If successful in its application for business rescue, a business rescue practitioner will be appointed to work with company management to restructure the affairs of the company, seeking input and consent from creditors, as well as considering strategic alternatives.
“As 96% of the dollar value of company creditors support Rockwell’s plans, the company now believes this support should be a significant factor in likely restructuring options,” the company noted in a statement released on Tuesday.
The business plan includes the provision of $8-million in loan capital, completing the Wouterspan plant with such proceeds, a focus on cost reduction, efficiency improvements, the sale of certain redundant assets, the pay down of all creditors under R50 000, as well as the purchase of all recent plant and mine supplies on a cash-only basis.
“The implementation of this business plan is well advanced, despite the frustrating intervention by C-Rock Mining,” Rockwell stated.
The remaining task is to complete the commissioning and ramp up the production rate of the processing plant at Wouterspan and relocate the Holsloot plant to Stofdraai (at the northern edge of Wouterspan).
The Wouterspan plant is nearing completion, with ore being processed through lines one and two and commissioning of line three now complete, to be followed by the ramp-up in processing rate, the company noted in the statement.
Rockwell “remains persuaded that its case for dismissal of the liquidation application is sound, and after a full hearing it believes it should prevail and C-Rock Mining’s actions will be shown to be spurious and without foundation”, the company reported.