Rockwell Diamonds: looking to a profitable 2012 year-end

The use of four geological metrics, for example, allows the TSX- and JSE-listed Rockwell Diamonds to exceed its carat targets consistently, and it is hoped that the alluvial diamond miner will enter a sustained phase of profitable steady state from the latter part of 2012.

Rockwell's quarter-on-quarter carat output was up in the latest quarter, even after the closure of the Holpan mine, and the company stresses that the continually strengthening performance should be reflected in the income statement. While a minimal gross third-quarter profit of C$0.6-million was achieved in the latest quarter, the books reflect a $2.1-million loss, due to the impact of full capitalisation of the Tirisano project absorption and the vagaries of modern-day exchange rate volatility.

As Rockwell looks to average diamond values continuing above $800/ct, growth options are based on the possible development of either Wouterspan, Nuwejaarskraal or Saxendrift Extension, or a doubling of Tirisano. "Those four present a wealth of opportunity for a tiny company like Rockwell," CEO James Campbell told Mining Weekly. The best of the four will be presented to the board for approval, with much depending on the success of the bulk X-ray machine, to be used in feasibility studies for Wouterspan and Nuwejaarskraal. The chosen project will then be financed internally or by going to the market. "We're very mindful that Rockwell shareholders have been through a very tough time and I am reluctant to dilute them further just to expand the company," Campbell said.

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