Independent valuation of Rockwell Diamonds confirms significant upside potential for shares and provides update on private placement

VANCOUVER, July 20, 2011 /CNW/ --
VANCOUVER, July 20, 2011 /CNW/ - Rockwell Diamonds Inc. ('Rockwell' or
the 'Company') (TSX: RDI) (JSE: RDI) (OTCBB: RDIAF) announces the
results of an independent valuation of the Company and the support of a
key strategic shareholder in the current private placement. The
valuation, dated February 28, 2011, was conducted by Jennifer Lucas,
MBA, CBV, ASA, of Evans & Evans Inc. following an in depth review of
the Company's publicly available information and filings in addition to
interviews with management from which it gained an understanding of the
history, background and future growth plans.

Results of Independent Valuation:

'We have a sound understanding of our resources and have published a
technical report for each of our properties,' said James Campbell, CEO,
Rockwell. 'Having completed a strategic review of the business at the
beginning of this year, we have a full understanding of what we need to
do to improve our financial performance. We are totally committed to
sustainably improving our diamond recovery and thus accreting revenue
and profitability in order to close the value gap.'

Rockwell was valued on a going concern basis using a weighted average of
three valuation techniques at February 28, 2011 ('valuation date'):

    --  A trading price method utilizing the average trading price of
        Rockwell for the 10 and 90 days preceding the valuation date;
    --  A guideline public company method comparing Rockwell's average
        dollar value per enterprise value of reserves and resources to
        a peer group of eight listed diamond mining companies; and
    --  An adjusted book value method using discounted cashflow of the
        underlying operations.

The underlying discount rates and fair market value of Rockwell's
operations and development properties based on the discounted cash flow
method are as follows:

 _______________________________________________________________
|             Operation     |Discount rate (%)|    Value range  |
|___________________________|_________________|_________________|
|Fair Market|Wouterspan     |25.36 to 28.96   |$47.4 million to |
|Value*     |               |                 |$54.8 million    |
|           |_______________|_________________|_________________|
|           |Tirisano       |25.36 to 28.96   |$17.6 million to |
|           |               |                 |$20.0 million    |
|           |_______________|_________________|_________________|
|           |Klipdam        |22.36 to 24.96   |$3.6 million     |
|           |_______________|_________________|_________________|
|           |Holpan         |22.36 to 24.96   |$281,000         |
|           |_______________|_________________|_________________|
|           |Niewejaarskraal|25.36 to 28.96   |$37.4 million to |
|           |               |                 |$42.5 million    |
|           |_______________|_________________|_________________|
|           |Saxendrift     |22.36 to 24.96   |$15.5 million to |
|           |               |                 |$16.1 million    |
|           |_______________|_________________|_________________|
|           |Resource       |                 |$121.9 million to|
|           |properties     |                 |$137.3 million   |
|___________|_______________|_________________|_________________|
|Adjusted book value**      |                 |$149.5 million to|
|                           |                 |   $165.0 million|
|___________________________|_________________|_________________|

* 74% of mine

** Adjustments to balance sheet of Rockwell to evaluate fair value of
net assets at February 28, 2011

The range of fair market value for Rockwell was determined to be $62.0
million to $69.1 million, based on a weighted combination of the three
valuation methods described above:

 _____________________________________________________________________
|Valuation   |Midpoint of |Weighting|Value      |Weighting|Value      |
|method      |fair market |         |           |         |           |
|            |value       |         |           |         |           |
|____________|____________|_________|___________|_________|___________|
|Trading     |$25,280,000 |40%      |$10,112,000|40%      |$10,112,000|
|price method|            |         |           |         |           |
|____________|____________|_________|___________|_________|___________|
|Guideline   |$15,800,000 |30%      |$4,740,000 |25%      |$3,950,000 |
|public      |            |         |           |         |           |
|company     |            |         |           |         |           |
|method      |            |         |           |         |           |
|____________|____________|_________|___________|_________|___________|
|Adjusted    |$157,250,000|30%      |$47,175,000|35%      |$55,037,500|
|book value  |            |         |           |         |           |
|method      |            |         |           |         |           |
|____________|____________|_________|___________|_________|___________|
|Total       |            |         |$62,000,000|         |$69,100,000|
|____________|____________|_________|___________|_________|___________|

Update on private placement:

Rockwell's strategic partnership with Daboll Consultants Ltd, an
affiliate of the Steinmetz Diamond Group continues to strengthen.
Steinmetz has recognized the inherent value in Rockwell with a
subscription amounting to $5 million in the current private placement
at a price of $0.75 per share (or 5 cents per share prior to the 15:1
consolidation).

'Our strategic partnership with Rockwell continues to grow from strength
to strength. We have committed significant capital to the current
capital raising initiatives which clearly demonstrates that we have
complete confidence in their investment plans to improve the production
profile,' explains Ori Temkin, CEO of Steinmetz Diamond Group.

'Our long standing strategic partner has identified that Rockwell
presents an excellent investment opportunity as our stock is currently
trading at a fraction of the value of its underlying assets, based on
the Company's future cash generation potential', stated Campbell. 'The
significant capital that Daboll has committed to Rockwell's private
placement, together with the funds being raised from institutional and
private investors as well as directors of the Company, will enable us
to continue with our investment plans so that Rockwell can deliver on
its potential.'

Subscriptions for the private placement are expected to close by July
22, 2011 with a special shareholders' meeting to approve the
transaction scheduled for August 25, 2011. Further announcements will
made in due course.

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 mining
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 is
also at an advanced stage of completing the acquisition of the Tirisano
property.

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.

About Steinmetz Diamond Group:

'Creators of the world finest diamonds', With seven decades of expertise
and heritage in the diamond industry, the company has a diversified
interest in the diamond business - providing rough and polished
diamonds to our customers around the world, cutting and polishing rough
diamonds in Botswana, South Africa, Namibia and New York.

Steinmetz is known for its leadership in rare and exceptional diamonds
as well as creation of unique high-end jewelry.

Some of the famous diamonds crafted by Steinmetz are the 203.04 carats,
De Beers Millennium Star and the magnificent Steinmetz Pink - 59.60
carats, flawless fancy vivid pink diamond.

The group marketing arm has been innovative and creative through special
exhibitions at the Smithsonian in Washington as well as 'Diamonds' at
the Natural History museum in London. Steinmetz is a proud sponsor of
Formula 1 team Vodafone McLaren Mercedes and holds annually the Monaco
GP Flawless Engineering Weekend.

The main administrative offices are based in Geneva, Switzerland with a
global presence in Antwerp, Tel Aviv, London, New York, Chicago, Dubai,
Mumbai, Hong Kong, Johannesburg, Gaborone and Windhoek.

For more information, visit www.steinmetzdiamonds.com

Evans & Evans valuation parameters

The summary of the Comprehensive Valuation Report ('Valuation')  is
qualified in its entirety by the full text of the Valuation.  The
analyses conducted by Evans & Evans, as described in the Valuation,
should be considered as a whole.  To focus on specific portions of each
analysis and of the factors considered, without considering all
analyses and factors, could create an incomplete and misleading view of
the processes underlying the Valuation.

In connection with the preparation of the Valuation, Evans & Evans
relied upon financial and other information, data, advice, opinions and
representations obtained by Evans & Evans from public sources or
provided to Evans & Evans by Rockwell  or otherwise pursuant to the
engagement of Evans & Evans.  The Valuation is conditional upon the
facts or representations that were relied upon.  Subject to the
exercise of their professional judgment and except as expressly
described in the Valuation, Evans & Evans did not attempt to verify
independently the accuracy or completeness of any such information,
data, advice, opinions or representations.

The Valuation has been prepared on the basis of securities markets as
well as economic and general business and financial conditions
prevailing as at June 30, 2011 and on the condition and prospects,
financial or otherwise, of Rockwell as reflected in the information and
documents reviewed by Evans & Evans and as represented by executive
officers and operating management of Rockwell.

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; 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.  In particular there can be
no assurance that refinancing funds will be available to Rockwell on
acceptable terms or any terms at all.

For further information on Rockwell, Investors should review Rockwell's
annual Form 20-F filing with the United States Securities and Exchange
Commission www.sec.com and the Company's home jurisdiction filings that are available at www.sedar.com.

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For further information on Rockwell and its operations in South Africa, please contact