Rocky results for diamond miner

The quarterly results of Rockwell Diamonds, which is in business rescue, show how distressed the alluvial diamond miner is and the difficulties it faces in bringing its new Wouterspan mining project into full production.

In its May quarter, Rockwell, which is listed in Johannesburg and Toronto, showed current liabilities of C$19m against current assets of C$4.26m.

The company’s cash dwindled to C$285,000 from C$1.7m in the May quarter a year earlier.

Rockwell has fully drawn down on its expensive bank overdraft of C$1.24m in SA, which carries interest of prime at 10.5% plus 5%.

The company did not report revenue during the quarter.

“Rockwell experienced a total comprehensive loss of C$2.7m for the quarter, which was primarily driven by no completed operations being conducted during the period, resulting in very few diamonds recovered to cover operational costs and overheads,” departing CEO Tjaart Willemse said.

Rockwell recovered 359 carats from its Wouterspan project during the quarter, with eight diamonds larger than 10 carats, after processing 166,328 cubic metres of alluvial gravels through its newly commissioned processing plant.

“However, some bottlenecks and design shortcomings have been identified and work is ongoing to address these,” Willemse said.

Management placed Rockwell’s three South African subsidiaries in business rescue to protect them from a liquidation process brought by contractor C-Rock Mining and to give the Wouterspan project a chance to ramp up and change the fortunes of the company. Willemse, who has resigned, will be replaced by Stephen le Roux.