JOHANNESBURG (miningweekly.com) – TSX- and JSE-listed Rockwell Diamonds seemed positive that it would be able to ramp-up its production profile, as its new CEO James Campbell stepped into office a day early on Tuesday.

Campbell said that the company, which owns operations in South Africa, had already kick-started initiatives to ensure that it delivered sustainable production month in, and month out.

Rockwell produced 26 165 ct in the 2011 financial year, but hoped to boost production to about 50 000 ct/y-plus, when its Tirisano operation near Ventersdorp became operational in the next year.

The company planned to grow production to 120 000 ct/y within six years.

Rockwell is buying the Tirisano operation from Etruscan Resources for R33,5-million and was currently waiting for the mineral rights transfer from South Africa’s Mineral Resources Department.

Rockwell is rebuilding a high-volume 180 000-m³-a-month four-stream production facility at the mine, which would be completed by the end of the second quarter in 2011.

The start of commercial production at the plant would add as much as 3 000 ct/m to 3 500 t/m to Rockwell’s production profile.

Rockwell mineral resource manager Glenn Norton said that a similar project was also envisaged at the company’s Wouterspan operation, which had been on care-and-maintenance since early 2009.

At the site, a high-volume low-cost production plant with a capacity of 340 000 m³ a month was currently envisaged. Norton said that once construction had been approved and started, it would take about 12 months to complete.

The plant and the second phase expansion at Tirisano would be funded through the capital markets. Rockwell CFO Gerhard Jacobs said that initial discussions with shareholders indicated that they were keen to come on board, while the company was also in discussions with new, potential shareholders on the matter.

“It is important to optimise all our operations, and to start new projects on properties where we already own the mining rights,” said chairperson David Copeland.

The plans for Wouterspan would not form part of the initial ramp-up in production from 2 500 ct/m to between 4 000 ct/m and 4 500 ct/m.

Norton said that Rockwell would have to cut about 40 jobs at its Holpan operation, as the mine went onto care-and-maintenance earlier this month.

Rockwell and the National Union of Mineworkers had been in discussions to convert its Holpan and Klipdam projects into continuous, or full-calendar operations, after they became unprofitable owing to the challenges resulting from the heavy rains.

However, an agreement between the two parties could not be reached, resulting in the closure at Holpan. “If a positive agreement could have been reached earlier, 80 new jobs could have been created instead of the other way around,” said Norton.

Klipdam would now become a continuous operation with remaining ore from Holpan being processed at the Klipdam plant. “Going forward, we will be reviewing all options in determining the future of these two operations,” said Norton.

Campbell emphasised that his initial focus as new CEO would be to ensure Rockwell could report sustainable and consistent production every quarter.

“If potential acquisitions come across our table we will have a hard look at them, but it is very important for Rockwell’s reputation and its shareholders that we start delivering on our potential.”

Campbell replaced Mark Bristow, who had been leading the company on an interim basis. Mark Bristow replaced his brother, John, who resigned in December after having struggled to return the company to profitability in the wake of the 2008 market rout.

Rockwell reported an operating profit of C$4-million, which is a turnaround of C$7,5-million, from its C$3,6-million operating loss in 2010.

The miner increased its revenue by 43% year-on-year to C$42,5-million, as the average price per carat increased by 35% to $1 365/ct. Sales rose 2% to 27 017 ct in the year under review.
 

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