‘New’ Rockwell sells noncore Saxendrift assets as CEO Willemse cracks whip

23rd December 2016 By: Henry Lazenby - Creamer Media Deputy Editor: North America

VANCOUVER (miningweekly.com) – Dual-listed precious gem producer Rockwell Diamonds has agreed to sell its noncore Saxendrift alluvial diamond assets in South Africa’s Middle Orange River region to private firm Nelesco 318 for C$4.3-million (R45-million).

“This transaction represents a significant milestone in our repositioning plans for the ‘new Rockwell’. It not only brings in cash in addition to the recently announced funding by two of the key shareholders and a third party, but also disposes of non-core assets and associated liabilities,” stated CEO Tjaart Willemse.

This will enable the company to focus on completing the next phase and ramp up of the Wouterspan mine and processing plant and advance its portfolio of development and exploration properties, Willemse said.

The deal includes Nelesco assuming C$6.7-million (R70-million) in rehabilitation liabilities, and the transfer of 98 employees.

Payment will be in three tranches, the first being C$1.9-million (R20-million) by January 31; 2017, the second being C$1.4-million (R15-million) owing on completion of the registration of the Saxendrift farm in Nelesco’s name; and the balance of C$950 000 (R10-million) upon the Section 11 transfer approval of the mineral properties to Nelesco, including getting the approval of the Takeover Regulation Panel of South Africa.

Nelesco will operate Saxendrift on a contract mining basis, paying Rockwell a royalty of 2.5% of revenue from diamonds recovered from properties under contract and be responsible for any related rehabilitation liabilities.

Rockwell also advised that C$2.8-million (R29-million) in deferred taxes arising from the 2015 purchase of Pioneer Minerals, being an accounting entry under International Financial Reporting Standards, will be reversed, reducing consolidated liabilities by a total of C$9.5-million (R99-million). The company expects to book a C$1.25-million impairment on the transaction in the current quarter.

“With this transaction now well advanced to completion stage, and our plant expansion and  commissioning in progress, we are excited by what the new Rockwell will deliver,” Willemse said.