Canadian junior miner Rockwell Diamonds, which focuses on developing alluvial diamond deposits in South Africa and is currently in business rescue avoid liquidation, is struggling to stay afloat and to bring its new Wouterspan WPC) project into full production, all the while bleeding cash. And its CEO, Tjaart Willemse, brought in to turn the company around, has resigned.
South African junior miner Rockwell Diamonds yesterday published its fourth quarter and annual results for FY 2017, with rough diamond revenues declining by 31% to $26.1million for FY2017, compared to FY2016 ($37.7 million), due chiefly to a 33% decrease in carat sales (18,976 carats to 12,789 carats).
South African junior miner Rockwell Diamonds has managed to temporarily stay an interim liquidation by applying for business rescue while it waits for a hearing in the Kimberley High Court regarding the order, currently scheduled for April 19.
As announced in December 2016, junior miner Rockwell Diamonds signed an agreement to sell "none-core assets" - the Remhoogte and Saxendrift mines - to Nelesco Proprietary 318 for US$3.48 million (ZAR45m); it has now been completed. The sale and purchase agreement also releases Rockwell from environmental and tax liabilities (rehabilitation liabilities) totalling US$5.40 million (R70m) as well as the transfer of 100 employees.
Rockwell Diamonds may have set an all-time record for the length of a press release title - "Rockwell’s third quarter results impacted by malicious litigation, however the strategic repositioning programme makes progress as new leadership is appointed and non-core assets along with related liabilities rationalized" - but this might be an intentional ploy to discourage readers from reading any further.
Rockwell Diamonds, the troubled South African junior miner in need of a comprehensive operational turnaround, has stated in an interim update that a sale process in respect of Remhoogte/Holsloot and Saxendrift mines is now well underway.
The troubled South African junior miner Rockwell Diamonds disclosed that a mid-October a strategic review of its assets and business options has led to today's confirmation it has received offers for certain assets and is considering its options and the possibility of transacting on one or more of the assets. iShould a transaction be concluded it is anticipated that it would improve liquidity and the company’s working capital position.
Alluvial diamond miner Rockwell Diamonds, with operations in South Africa, is in a “state of despair”, its incoming chief executive Tjaart Willemse said last week in the release of quarterly results to end-August., adding that the company will implement a comprehensive operational turnaround. The statement from Willemse reads: “From my observations to date on the general health of the business and understanding of the main contributors to its current position, it is clear that the business finds itself in a state of despair for a number of reasons.
Rockwell Diamonds Inc. said that James Campbell, the Chief Executive Officer, has tendered his resignation and in an unrelated development, that Stephen Dietrich and Rick Menell have also tendered their resignations as directors. A special board committee undertook a strategic review on August 28 with the aim of evaluating the positioning of Rockwell as well as the effectiveness of defined strategies that were recently implemented by the company.
Canadian junior minor Rockwell Diamonds, which operate and develops alluvial diamond deposits in South Africa, reported a return to profit its rough diamond revenues leaped 41% to $9.3 million (C$12.1 million), and it reported an after-tax profit of $438,000 (C$570,000) during the first quarter of the fiscal year 2017.
"Some of Rockwell Diamonds diamonds recovered during the last quarter as reported in our production update of this morning."
James AH Campbell - Chief Executive Officer at Rockwell Diamonds on LinkedIn
As a result of continuous improvement of mining throughput, Rockwell Diamonds has reported improved production and sales performance after a tumultuous quarter of the last financial period, with the volume of diamonds produced in Q1 (the three months ended May 31, 2016) up 32% compared to the first quarter of 2016 and up 7% on Q4 2016, "chiefly due to substantially higher volumes mined and processed at Remhoogte (RHC)." During the first quarter, Rockwell sold 4,880 carats of diamonds, up 3% from last quarter, at an average price of $1,864.