Rockwell Diamonds' sale of unproductive assets generates C$6.5 million to be used to fund capital growth projects

VANCOUVER, July 26, 2011 /CNW/ --
VANCOUVER, July 26, 2011 /CNW/ - Rockwell Diamonds Inc. ('Rockwell' or
the 'Company') (TSX: RDI; JSE: RDI; OTCBB: RDIAF) is pleased to
announce further progress in its turnaround strategy, with the sale of
three non core assets which generated total proceeds of C$6.5 million.

'The strategic review which was conducted in the first quarter of 2011,
included an investigation of our asset allocation processes to ensure
that all equipment and properties were being fully utilized,' explains
James Campbell, CEO Rockwell. 'This analysis of the Company's asset
register helped us to identify three assets that were not generating
adequate returns and the decision was taken to sell these to generate
funds for our capital investment programme. We will continue with this
evaluation process to ensure that we optimally use all the assets on
our balance sheet.'

The assets which have been disposed of are as follows:

    --  The sale of Makoenskloof property, located in the Northern
        Cape, was concluded in mid July 2011 for C$0.9m, which will be
        settled by the end of August 2011. The decision to sell this
        property was taken after the exploration and evaluation results
        showed that it did not fit Rockwell's investment criteria and
        that it might prove attractive to a third party with a
        different set of skills.
    --  The PC3000 excavator located at the Wouterspan mine which is on
        care and maintenance has been sold. The sale was completed in
        the third week of July 2011 and the full sale consideration of
        C$3.0 million has been received.
    --  A sale agreement for the Holpan DMS plant has been concluded
        for a total consideration of C$2.6 million which is payable in
        two equal tranches. The first payment of C$1.3 million has been
        received with the balance payable within 30 days. The mine was
        put on care and maintenance in May 2011 and is adjacent to
        Klipdam, which has a plant with the capacity to process any
        gravels extracted from Holpan in the future.

Campbell highlighted this as 'a positive move forward for Rockwell and
just one of many proactive steps being taken to ensure that the Company
delivers on its potential. The funds amounting to C$6.5 million will be
allocated towards our new capital project budget. This includes putting
in place a new in-field screen at Saxendrift, and completing the
Tirisano construction project. These funds will supplement our current
capital raising activities, reducing the total quantity of funds which
we are targeting as well as dilution to the immediate benefit of all
shareholders.'

Campbell explained that the team 'was looking at every aspect of the
business with the objective of ensuring that our focus turned to
creating value and sweating the assets' and did not discount further
sales as he cleaned up things across the Company's operations.

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.

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