RAPAPORT... Rockwell Diamonds reported that its first quarter revenue fell 17 percent year on year to $7.1 million for the three months that ended on May 31, while production costs rose 16 percent to $6.9 million. The junior miner recorded a loss of just more than $3 million, up from $1.2 million one year ago. The company produced 7,234 carats of rough diamonds and sold 6,234 carats at an average price of $944.
Rockwell's overall financial performance continued to be affected by start-up costs for its Tirisano diamond property and the unprofitable Holpan mine and the loss of its production. Tirisano generated new revenue of $313,712 from the sale of 1,007 carats produced during the quarter. Beneficiation revenue from the Steinmetz Diamond Group totaled $1 million.
Although the market has experienced price declines of some 20 percent for diamonds weighing less than 1.50 carats, according to Rockwell, the 2-carat-plus sizes remain stable. The mining company's joint venture with Steinmetz Diamond Group provides it with the ongoing opportunity to participate in pricing movements in both rough and polished diamonds, especially for larger, gem-quality diamonds.
Looking ahead, Rockwell contended that its Saxendrift project will continue to meet production targets as processing is increased; Tirisano will be focused on implementing the mine plan adjustment strategy, and the Klipdam project will focus on mining the palaeo channel unit to increase average carat value.
Improving production from Rockwell's properties that are located adjacent to Saxendrift is also a priority this year. This includes the additional resources acquired as part of the Jasper project purchase, which became unconditional at the end of May 2012. Plans are also in progress to evaluate the potential of extending mining operations to other parts of the Saxendrift property with the objective of extending the life of this operational footprint. The pre-feasibility study for Wouterspan has commenced and is scheduled for completion by year end.
James Campbell, the president of Rockwell, said, ''During the first quarter of fiscal 2013, we continued to entrench our diamond value management principles into our operations and the performance of Saxendrift and Klipdam is tracking much closer to our expectations now. Accordingly, Saxendrift delivered a much improved performance with a 39 percent increase in volume production and 26 percent increase in carats.
''Klipdam is showing early signs that it is benefiting from the appointment of a full time mine manager, with a 20 percent increase in production and its carat production up 51 percent from a year ago,'' Campbell said. ''These assets, however, will be reaching the end of their mine lives soon and we are actively pursuing strategies to extend the economic life of Saxendrift, with the acquisition of Jasper and by developing other parts of the properties. We are also looking to maximize the value of the asset at Klipdam by investigating our options.''