Rockwell Q1 revenue up 118pct to C$8.5m

[] — Mid-tier diamond producer Rockwell Diamonds on Friday reported a 118% increase in first quarter revenue from rough diamond sales to C$8.5m from C$3.9m previously.

The company produced 7,316 carats of diamonds during the quarter to end May, which was an increase of 83% from one year ago.

In the three-month period 4,927 carats were sold at an average price of
US$1,611.11 per carat.

An operating profit of C$2.5m was realised for the period while a loss of
C$0.03m or C$0.00 per share was realised for the period.

Rockwell continued to operate three mines – Holpan, Klipdam and Saxendrift –
during its first fiscal quarter of 2011 financial year, and has initiated a bulk sampling programme on the Klipdam Extension property to evaluate this property, which is near to the Klipdam operation.

All of these operations are located in the Northern Cape Province area of South

The company said the prices received for the rough diamonds at its recent tender were comparable to those achieved during calendar 2008, indicating the diamond business has improved over the past eighteen months.

Other evidence of this recovery includes an increasing demand for larger stones.

“In addition, polished diamond prices have also improved in calendar 2010,
although the increase in price of polished stones on a percentage basis is still less than for rough diamonds,” Rockwell said.

It added that the retail sector had shown a year-on-year increase in trade but has not yet fully recovered while margins on polished stones are still small because of high rough diamond prices.

Yet credit terms have improved from the exceptionally high terms offered to the industry prior to the credit crisis in late 2008, and this should increase the purchasing power of the retail sector, it noted.