[miningmx.com] – ASSET restructuring continued apace at Rockwell Diamonds, a Toronto- and Johannesburg-listed diamond business which mines in the Northern Cape of South Africa.
The company announced it had suspended operations at Niewejaarkraal, the sustainability of which would now be assessed amid high stripping costs – a decision that follows the closure of its Saxendrift Hill Complex.
Rockwell Diamonds had also recently sold its Tirisano mine but had replaced diamond production from its restructuring with Remhoogte and Holsloot, two operations bought in the C$21.9m acquisition of Bondeo.
Rockwell reported a hefty $65.1m attributable loss in the first quarter of its 2016 financial year following a C$8m loss in the previous quarter and a near breakeven in the comparable period of the previous financial year.
Shares in the R131m company were unmoved today but have fallen 9% in the last 30 days and a fifth in the last three months of trade.
Commenting on the second quarter, James Campbell, CEO of Rockwell Diamonds, said the company would raise equity and asset funding in to repay bridging loans of R16m and US$16.5m from shareholders Mark Bristow, Rockwell’s chairman, and Ascot Diamonds respectively.
“Rockwell has come through a challenging first quarter as we dealt with some final legacy issues and rationalised our own operations which have been struggling with declining grades,” said Campbell.
“Having sold Tirisano, suspended operations at Niewejaarskraal and closed Saxendrift Hill Complex, the completion of the Bondeo acquisition delivers a suite of longer life options including the flagship Remhoogte/Holsloot operations,” he said.
“With these assets and our own Wouterspan and Lanyonvale feasibility and exploration projects we are now able to look to the future and deliver on our medium term objectives of building a sustainably profitable and integrated diamond business.”
Campbell said the diamond market had been difficult but “… a continued reduction in rough supply and lower prices could sustain polished prices and stabilise the disparity between rough and polished prices”.
