Rockwell reports Q1 gem sales of $5.9m

27th June 2012 By: Idéle Esterhuizen

JOHANNESBURG ( – Alluvial diamond mining company Rockwell Diamonds reported on Wednesday that its diamond sales for the first quarter of its 2013 financial year reached 6 234 ct and generated $5.9-million.

The average price a carat for the quarter was $944 and sales included 1 005 ct from the proof-of-concept bulk X-ray plant, located at the company’s Saxendrift mine, which were sold at an average price of $853/ct.

CEO James Campbell said Rockwell planned to incorporate the technology into future mining developments, as the results gave it confidence that it could unlock further sales revenues.

The Klipdam mine, in the Northern Cape, achieved a 20% increase in carats sold, as a result of mining of the Rooikoppie unit. The average revenue a carat of $550 was in line with the previous quarter and resulted from the finer diamond distribution in Rooikoppie, which also had a lower cost of mining.

Although carats sold from the Saxendrift mine, near the Middle Orange river, increased 12% year-on-year, a lower average price of $1 727/ct was recorded.

The year-on-year increase was owing to the sale of several high-valued stones in the comparative quarter of the 2012 financial year.

A total of 1 007 ct recovered from the Tirisano mine, in the North West province, were sold during the first quarter at an average price of $311/ct. Rockwell attributed the decrease in average carat value to mining a less clay-rich unit and the processing of tailings overlying the above unit during the rainy season, which had a smaller average diamond size.

This was necessitated by the mine’s reliance, in the interim, on a dry front-end processing capability. However, Rockwell said the effect would be mitigated by the installation of a wet front-end processing system, which was currently being commissioned.

“Tangible benefits of our diamond value management initiatives are starting to flow through, with a 44% increase in carats sold in the first quarter from our three operational mines,” Campbell said.

Diamond prices during the reporting period had been stable year-on-year, but there had been pricing pressure in the polished market, owing to the prevailing global economic uncertainties.

Nevertheless, there had been growth in demand from India and China, while retail sales in the US were showing signs of recovery.

“We have seen the biggest drop in prices for smaller polished diamonds, while prices for plus 2 ct stone sizes, which represent more than 80% of Rockwell’s production, have been constant. It is our expectation that rough prices will remain stable for the remainder of the calendar year,” Campbell stated.

Further, Rockwell continued to produce large stones at all its operations during the fourth quarter of its 2012 financial year with the recovery of 69 stones exceeding 10 ct.

Klipdam produced 18 stones exceeding 10 ct, including four stones beyond 20 ct. Saxendrift delivered 32 stones that were larger than 10 ct, with four stones weighing more than 50 ct, including a 92 ct rough diamond.

Meanwhile, Tirisano produced three plus 10 ct stones; and the pilot bulk X-ray system produced 16 stones exceeding 10 ct from Saxendrift tailings, with the largest stones weighing 53 ct and 74 ct respectively.

The stones were channelled into Rockwell’s beneficiation joint venture with Steinmetz Diamond Group, which delivered value-added revenues for the company’s stones that are larger than 2.8 ct.