Rockwell progresses towards strategy to grow production in Middle Orange River region

VANCOUVER, Aug. 29, 2013 /CNW/ - Rockwell Diamonds Inc. ("Rockwell" or the "Company") (TSX: RDI; JSE: RDI; OTCBB: RDIAF) is pleased to provide an update on its core strategy to increase monthly production volumes in the Middle Orange River region to 500,000m³ per month. The objective of the strategy is to improve quarterly earnings through the increased recovery of large, high value diamonds. The construction of two new mines, namely Saxendrift Hill Complex (in production) and Niewejaarskraal (in production ramp up) is a key part of the new plan. Total capital investment of $3.6 million for the development of these two mines was internally funded. As part of the strategy Rockwell has also successfully commissioned and operated the more efficient Bulk X-ray technology in both a concentration and recovery mode thus obviating the need for lesser efficient and more costly pans or DMS technology, making it one of the first South African diamond mining companies to do so.

Commenting on the Company's progress in the Middle Orange River region, James Campbell, CEO and President said:

"Rockwell has recently delivered on several notable milestones towards our medium term core business strategy to increase alluvial production volumes in the Middle Orange River region to 500,000m³ per month. We have developed two new, internally funded mines, demonstrating our capability to bring new production capacity on line by making use of fit-for-purpose technology that is suited to each deposit's specific geology and by chiefly re-using existing assets. These will bring our average monthly production volumes on the Middle Orange to 360,000m³, putting us on track towards our medium term target and also leading to improved quarterly earnings."

"Saxendrift Hill Complex is an expansion of the operations at our flagship Saxendrift Mine, where we continue to deliver a strong performance. At this new mine, which is now in production, we pioneered the implementation of the Bulk X-ray technology in the full production environment, where we are using it in both a concentration and recovery mode. We are delighted with these results, which showed a 40% increase in grade when we processed Saxendrift Extension gravels in parallel through the Bulk X-ray and the pan plant system at Saxendrift during the month of July 2013."

"We have commissioned the DMS plant at Niewejaarskraal and are ramping up production, which we started within ten weeks of receiving board approval for this project. While Bulk X-ray technology will be considered for future upgrades at Niewejaarskraal, we based the first phase on DMS technology. This was due to the long lead-time associated with implementing Bulk X-Ray technology there, which could not be considered for the current phase. As such, we have developed proven blue prints for processing plants that can be deployed as we grow our production profile across our existing inventory of properties in the Middle Orange River region or through acquisition."

"Our investments to grow Middle Orange production also have socio-economic benefits for this region which is impacted by high unemployment. All but eight of the workforce from Klipdam accepted to transfer to Niewejaarskraal, enabling us not only to preserve 220 jobs, including the CML Operations staff complement, but also retaining key skills to quickly bring the new mine on stream. Starting the new mine at the Saxendrift Hill Complex led to the creation of 85 new jobs. Our future growth plans include options to further increase the production capacity at Niewejaarskraal and we are also evaluating the next steps at Wouterspan, both of which would have flow through benefits for employment in the region."

Saxendrift Hill Complex

Production ramp up at the new Saxendrift Hill Complex mine is practically complete with the plant now running at close to nameplate capacity. The processing plant is based on two Bourevestnik X-Ray bulk sorters and two single particle sorters with a monthly processing capacity of 100,000m³.

In order to more fully evaluate the effectiveness of the Bulk X-ray technology compared to traditional DMS and pan plants, gravels from the Saxendrift Extension project were processed in parallel through the Bulk X-ray system as well as Saxendrift's traditional pan plant (with Flowsort X-ray machines) for the month of July 2013. Results for July showed that the Bulk X-ray plant achieved a grade that was at least 40% higher than the conventional plant, including two rough diamonds exceeding 30 carats.

The Saxendrift Hill Complex plant is projected to have 30% lower unit processing costs than the pan plant, providing further commercial benefits. The Bulk X-Ray plant also has a lower environmental footprint with lower water consumption and power requirements than the traditional processing plants. The capital investment in the project was paid back with gross revenue generated from the sales of diamonds recovered during the first two months of production.

Niewejaarskraal

At Niewejaarskraal, production commissioning of the first phase of the new plant started during July 2013 within ten weeks of the project being approved. The first diamonds were recovered, including two stones exceeding 20 carats. High diamond values have compensated for slightly lower than anticipated grades for the initial gravels that have been processed during commissioning, due to a greater variability in the Rooikoppie particle size distribution than was outlined in the previous operators' sampling reports. However, the plant efficiency was confirmed by reprocessing plant tailings through the Bulk X-ray system, with no diamonds being recovered.

The plant is constructed using elements of the existing DMS plant that had been on care and maintenance at Niewejaarskraal since 2007. The next phase of commissioning entails processing a mix of Palaeo and Rooikoppie gravels which commenced during the third week of August when the first blast was carried out to access the main Palaeo deposit that is expected to be the mainstay of operations at Niewejaarskraal. The Company has standardised a BCOS (Bottom Cutoff Size) of 5 mm for the Middle Orange resources, as disclosed in an updated NI 43-101 Technical Statement that has been filled on SEDAR.

About Rockwell Diamonds:

Rockwell is engaged in the business of operating and developing alluvial diamond deposits, with a goal to become a mid-tier diamond production company. The Company has three existing operations, which it is progressively optimizing, two development projects and a pipeline of earlier stage properties with future development potential.

Rockwell also evaluates merger and acquisition opportunities which have the potential to expand its mineral resources and production profile and would provide accretive value to the Company.

No regulatory authority has approved or disapproved the information contained in this news release.

Forward Looking Statements

Except for statements of historical fact, this news release contains certain "forward-looking information" within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements.
Factors that could cause actual results to differ materially from those in forward-looking statements include uncertainties and costs related to exploration and development activities, such as those related to determining whether mineral resources exist on a property; uncertainties related to expected production rates, timing of production and cash and total costs of production and milling; uncertainties related to the ability to obtain necessary licenses, permits, electricity, surface rights and title for development projects; operating and technical difficulties in connection with mining development activities; uncertainties related to the accuracy of our mineral resource estimates and our estimates of future production and future cash and total costs of production and diminishing quantities or grades if mineral resources; uncertainties related to unexpected judicial or regulatory procedures or changes in, and the effects of, the laws, regulations and government policies affecting our mining operations; changes in general economic conditions, the financial markets and the demand and market price for mineral commodities such and diesel fuel, steel, concrete, electricity, and other forms of energy, mining equipment, and fluctuations in exchange rates, particularly with respect to the value of the US dollar, Canadian dollar and South African Rand; changes in accounting policies and methods that we use to report our financial condition, including uncertainties associated with critical accounting assumptions and estimates; environmental issues and liabilities associated with mining and processing; geopolitical uncertainty and political and economic instability in countries in which we operate; and labour strikes, work stoppages, or other interruptions to, or difficulties in, the employment of labour in markets in which we operate our mines, or environmental hazards, industrial accidents or other events or occurrences, including third party interference that interrupt operation of our mines or development projects.
For further information on Rockwell, Investors should review Rockwell's home jurisdiction filings that are available at www.sedar.com.

Information Concerning Estimates of Measured, Indicated and Inferred Resources

This news release uses the terms "measured resources", "indicated resources" and "inferred resources". Northern Dynasty Minerals Ltd. advises investors that although these terms are recognized and required by Canadian regulations (under National Instrument 43-101 Standards of Disclosure for Mineral Projects), the U.S. Securities and Exchange Commission does not recognize them. Investors are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted into reserves. In addition, "inferred resources" have a great amount of uncertainty as to their existence, and economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or pre-feasibility studies, or economic studies except for Preliminary Assessment as defined under 43-101. Investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legally mineable.

SOURCE Rockwell Diamonds Inc.