JOHANNESBURG (miningweekly.com) – JSE- and TSX-listed Rockwell said on Wednesday that the company was encouraged by the strength of the rough diamond market in the first six months of the year, but anticipated a slight slowdown in sales during the forthcoming Europe and North American summer vacations.

The miner also announced separately that it had acquired a 20% stake in Flawless Diamond Trading House (FDTH), which was established in 2006 to market and sell its diamond production, for R700 000.

Rockwell president and CEO John Bristow said that the company was encouraged by the resilience of the rough diamond market to date and added that the company had experienced improvement in prices in almost all categories of its production.

"Although we anticipate a normal seasonal slowdown in sales during the forthcoming European and North American summer vacations, we expect the market to show some further strengthening in the later part of the year in the lead-up to the Thanksgiving and Christmas holidays in 2010," he added.

Rockwell currently operates the Holpan, Klipdam, and Saxendrift mines in South Africa's Northern Cape province.

During the year to date, Rockwell had recovered 125 stones of larger than 10 ct in size. This included the 66-ct stone from Holpan, and two gemstones of over 100 ct from Saxendrift. It also recovered a 100-ct industrial stone at Klipdam.

In the company's most recent diamond sale, it achieved an average of $1 735/ct, and reported a yearly average of $1 216/ct, which was about 19% below its long-term average of $1 500/ct.

Rockwell sold 13 222,69 ct for the year, resulting in a revenue stream of just over $16-million to date.

The company had also received about $1,27-million as its portion of profit share from stones that have been beneficiated in terms of Rockwell's agreement with the Steinmetz Diamond Group (SDG).

This profit share had been derived from stones sold into the SDG beneficiation agreement in November 2009 and February 2010. Bristow said that the company currently had a number of stones larger than 10 ct undergoing beneficiation and that it expected to achieve a regular income flow from SDG during the 2011 financial year.

The company had carried out three tender sales so far in calendar 2010 during the months of February, April and May.

In February, Rockwell sold some 5 887,57 ct at an average price of $1 154/ct. In April, the company undertook a sale of 3 592,40 ct, and in May, Rockwell sold a parcel of 3 034,30 ct, including a stone of 66 ct from its Holpan mine and two stones larger than 100 ct from its Saxendrift mine. An average price of $1 735/ct was achieved during the May sale.

FLAWLESS ACQUISITION

Meanwhile, Rockwell said that the 20% stake in FDTH, which it bought from Hennie van Wyk, would provide it with access to additional revenue, allowing it to gain insight into diamond sales trends, which would assist its production and growth plans.

"Our investment in FDTH provides us with additional revenue flow and will assist the company to better understand the demand from, and penetration into, an international diamond market which is undergoing progressive change with the emergence of strong new players in India and China," commented Bristow.

FDTH was established in the premises of South Africa's high-security diamond trading and manufacturing hub known as Jewel City, located on Commissioner Street in Johannesburg. FDTH was established and is still run by diamantaire Jeffry Brenner.

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