Rockwell Diamonds Inc. ("Rockwell" or the "Company") (TSX: RDI; JSE: RDI) is pleased to announce that it has, consequent upon the Old Order Mining Rights held by Jasper having been converted into New Order Mining Rights, completed its acquisition of the Jasper Mine by settling the purchase consideration through the issue of shares.
The agreement to acquire the Jasper Mine project, which is contiguous to Rockwell's Saxendrift Mine, formed part of the transaction to unwind the Company's Black Economic Empowerment ("BEE") partnership with Africa Vanguard Resources ("AVR") (as announced on March 19, 2012):
- Jasper acquisition: Rockwell's application for the New Order Mining Right at Jasper has recently been approved, triggering the payment by the Company of R2.0 million (C$221,484) in Rockwell shares listed on the JSE Limited, to the Jasper shareholders. A total of 533,332 shares were issued at R3.75 (C$0.41) per share, which represents the 5-day volume weighted moving average price at the time that the agreements were signed in March 2012. The Jasper shareholders have undertaken not to trade these shares for a period of one year.
- Unwinding of AVR BEE shareholding: A new black economic empowerment partner, which shares the Company's vision and is committed to adding value to Rockwell has been identified. Good progress has been made in terms of securing external funding to cover purchase consideration by the new BEE shareholder in order to finalize the unbundling of the transaction with AVR.
The Company has outlined the way forward for this newly acquired property. Geological studies to estimate the resources at the Jasper Mine are well advanced and the Company is on track to release a NI 43-101 compliant technical statement before the end of May 2013. Initial assessments of the alluvial Jasper deposit suggest that its production profile may be similar to Saxendrift in terms of quality, size and value. Accordingly, by processing materials mined from Jasper at the Company's Saxendrift Mine, there is the potential to extend the life of the Saxendrift operation with limited new investment. The Company is also reviewing the possible construction of an in field screen at Jasper with projected efficiency benefits for the overall operating cost structure of the mine.
"The Middle Orange River region, which is known for its large and high-valued gem-quality diamonds, is a key area of focus for Rockwell, with the Company targeting a processing capacity of 500,000 m3 per month of quality gravels. The Jasper Mine project is an important component of this strategy as it provides the potential to extend the mine life of the contiguous Saxendrift Mine," explains James Campbell, CEO, Rockwell Diamonds. "Jasper increases our options within the Saxendrift Complex to grow our production profile, and deliver on our forecast recoveries."