Rockwell plans to up its technical game

Brendan Ryan | Fri, 12 Aug 2011 10:28

[miningmx.com] -- NEWLY-appointed Rockwell Diamonds CEO James Campbell has embarked on a mission to improve the technical processing abilities of the group ahead of further major expansions in production capacity.

That strategy lies behind Rockwell’s review of its investment priorities in terms of which the company intends completing the implementation of new in-field screens at the Saxendrift and Tirisano mines before developing the proposed Wouterspan and Niewejaarskraal projects.

Campbell told Miningmx "after I took over it became clear that Rockwell had very high quality geological resource statements but the recovery performances on the plants left a huge amount to be desired.

"There was an absence of measures around our diamond recovery efficiencies. That’s why I made the staff changes at the top and brought in people with the right experience and diamond metallurgy skills.

"What I want is to install a lot more discipline in the diamond recovery plants. This will be a process but we have now started it and I would hope to see the benefits coming through by the third quarter of our current financial year."

Campbell said he was also looking at the introduction of the latest recovery technologies - specifically bulk X-ray recovery machines – but this would depend on availability of funding.

Bulk X-ray machines are capable of operating at far greater volumes than the current x-ray recovery machines being used and are also capable of recovering Type 2 diamonds which the present machines tend to miss.

Type 2 diamonds are nitrogen free with very low luminescence properties which is why current X-ray machines often miss them.

Campbell said that, while such diamonds are rare, they occur in the kimberlite pipes of Lesotho where Gem Diamonds has just ordered these plants for installation at Letseng mine.

Rockwell recovers alluvial diamonds along the middle Orange River, but one of the sources from which these diamonds have been eroded and transported down the river is Lesotho.

Commenting on the decision to cut back on Rockwell’s previously stated aim of raising C$35m to recapitalise the company, Campbell said that was the result of a number of factors.

"There was a clear view from our shareholders that they wanted to see lower dilution and from the market that that we needed to demonstrate results from what we were already doing.

"We also raised $6.5m through selling three major assets that were not generating adequate returns and there’s an ongoing review underway of our remaining assets."

Those assets included the Makoenskloof property, the PC3000 excavator at Wouterspan and the dense media separation (DMS) plant at Holpan.

Rockwell continued to battle during the quarter to end-May as production dropped 40% to 4,428 carats (May quarter 2010: 7,368 carats) and the company reported an operating loss of C$1.2m.

Reasons included the abnormally heavy rainy season which extended into the May quarter and continuing production problems at the Saxendrift mine.

Campbell said: "The results demonstrate that although production was under pressure, the underlying health of Rockwell continued to improve.

"This is evidenced by the 19% reduction in overhead costs, the positive cash inflows from operations and the fact that we maintained our net cash balances at $3m after making further investments to increase our future production.

"Although carat production in June and July 2011 was disappointing, the strong production of diamonds in the last two weeks should enable the company’s performance for the second quarter to at least match the results for the same period in fiscal 2010.

"We have the makings of a successful mid-tier diamond mining company. Our first priority will be to commission the Tirisano mine and implement an effective front-end screen at Saxendrift.

"Once these have been bedded down we will turn our attention to securing the capital resources and constructing the processing plants at Wouterspan and Niewejaarskraal."