[miningmx.com] — ROCKWELL Diamonds’ shares took a smack on Friday
as the mining junior reported a $13m annual loss, with CEO James Campbell
admitting that the company’s turnaround was still very much “a work in progress’.
The loss came courtesy of an asset impairment to the tune of $4.9m, as well as
Rockwell’s recently acquired Tirisano mine gobbling up $6.7m in operating costs
during the ramp-up phase of its recovery plant. The same mine accounted for an
additional provision towards rehabilitation of $1.3m, while Rockwell settled the
Midamines legal dispute for $1.5m.
At the close of trading on Friday, the company’s JSE-listed shares were down 9.3%, at
R3.80, on thin volumes.
Campbell joined Rockwell in June 2011, followed soon by the appointment of COO
Michael Hunt, as part of a repositioning of the business to become a 120,000 carats-
per-annum producer within five years. A major part of the new strategy was to
improve the metallurgical processes at the group’s mines.
“The bleed essentially was Tirisano,’ Campbell commented on the group’s financials
to end-February, adding that if he had his way the plant would’ve been rebuilt from
scratch again.
Since Campbell’s appointment, the group has twice replaced Tirisano’s mine manager.
He said the construction of a wet front-end system at the plant has contributed to
Tirisano achieving its throughput levels of late, but that the mine would still require
working capital for the next three months.
Campbell was also critical of the previous management’s assesments on the value of
Rockwell’s assets, saying the impairments were necessary and “the right thing to do’;
applying the same principle to the R1.3m increase in Tirisano’s rehabilitation
obligation.
“The loss for the year of $13.7m reflects the impact of the strategic decisions that
were taken during the year to place Rockwell on a solid footing,’ the company said.
“These will flow through to the financials as its mines’ operational transformation
continues to yield improved production and lower unit costs.’
The company still had $9.9m cash in the bank at the end of the period. Apart from the
working capital that Tirisano would need, Rockwell plans to spend some money on the
exploration of Jasper mines – the property it acquired as part of a settlement
agreement with BEE partner African Vanguard Resources. Jasper is adjacent to
Rockwell’s flagship Saxendrift property.
Campbell said the cash sources would be more than adequate for the group’s
obligations, adding the caveat that “the world must continue as it is’.
Pointing to the group’s priorities fo the year ahead, Campbell said it included the
planning and feasibility stages of the Wouterspan project, completing the ramp-up at
Tirisano and extending the bulk x-ray pilot project which had proven successful at
Saxendrift.
