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Rockwell's Three Acquired Alluvial Properties to Enhance Production

Feb 6, 2015 10:10 AM   By Jeff Miller
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RAPAPORT... Rockwell Diamonds Inc. conditionally agreed to  acquire three alluvial diamond properties, and an associated plant and equipment, from Bondeo 140 CC and its affiliates in an effort to extend its footprint across the Middle Orange River region of South Africa.  The projects, Remhoogte, Holsloot and Bo-Karoo, are contiguous to Rockwell's existing properties and have already produced more than 7,300 carats of high-quality diamonds that were valued between $3,000 and $4,000 per carat.

Rockwell told investors that these additional properties have the potential to increase its portfolio by 11 million to 12 million cubic meters of gravel at target grades of 0.40-carat to 1.50-carats per 100 cubic meters. In addition, Rockwell believes that its existing processing capacity across the Middle Orange Region will improve by approximately 200,000 cubic meters per month.

The transaction is expected to close during the second quarter, subject to the satisfaction of certain regulatory conditions.  James Campbell, the CEO of Rockwell, said, "We are confident that we have delivered a value-accretive acquisition with Remhoogte, Holsloot and Bo Karoo, which will be a foundation to further Rockwell's Middle Orange Region growth strategy. Furthermore, they are early-life mines with exploration upside potential comprised of three recently commissioned processing plants that include some state-of-the-art bulk X-ray technology. Recent production has confirmed the high-value-per-stone potential of the properties and the transaction also includes the brownfields Bo Karoo project, where bulk sampling has produced typical Middle Orange Region-style stones in the past."

Remhoogte, a 1,585-hectare property,  is contiguous to Holsloot, a 1,050-hectare property, as well as to Rockwell's current operations. The properties have three fit-for-purpose processing plants with total monthly processing capacity of approximately 200,000 cubic meters. Early diamond recovery indicated that the stones produced were better colors than Rockwell's current Middle Orange Region assortment, with the largest stone weighing 178 carats. There has been insufficient exploration in these areas to define a mineral resource and it is uncertain if further exploration will result in the targets being delineated as a mineral resource, the company explained.

Bondeo has processed approximately 900,000 cubic meters of gravel since  May 2014, producing 7,307 carats with an estimated sample grade of 0.80 carat per 100 cubic meters. Rockwell will undertake detailed surveying and infill drilling during 2015 in order to define a mineral resource and it expects to report results during the first quarter of fiscal 2017.

The Bo-Karoo is a diamond mining right that is situated on a farm in the Hopetown district of the Northern Cape, measuring 3,508 hectares and located 20 kilometers northeast of Saxendrift. This property has previously been sampled, but data is limited regarding the potential volume of its gravels. Bo-Karoo is a brownfields project with many areas at the same elevation as Rockwell's Saxendrift and Niewejaarskraal properties and it has extensive exploration targets with historical sample grades of 0.20 carat to 0.40 carat per 100 cubic meters and diamond values ranging between $3,000 and $4,000 per carat.


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Tags: diamonds, Jeff Miller, middle orange, mining, Rockwell, South Africa
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