RDI sees diamond strengtheningRockwell sees rough diamond market strengthening
JOHANNESBURG (miningweekly.com) – JSE- and TSX-listed Rockwell saidon Wednesday that the company was encouraged by the strength of therough diamond market in the first six months of the year, butanticipated a slight slowdown in sales during the forthcoming Europe andNorth American summer vacations.
The miner also announced separately that it had acquired a 20% stakein Flawless Diamond Trading House (FDTH), which was established in 2006to market and sell its diamond production, for R700 000.
Rockwell president and CEO John Bristow said thatthe company was encouraged by the resilience of the rough diamond marketto date and added that the company had experienced improvement inprices in almost all categories of its production.
"Although we anticipate a normal seasonal slowdown in sales duringthe forthcoming European and North American summer vacations, we expectthe market to show some further strengthening in the later part of theyear in the lead-up to the Thanksgiving and Christmas holidays in 2010,"he added.
Rockwell currently operates the Holpan, Klipdam, and Saxendrift minesin South Africa's Northern Cape province.
During the year to date, Rockwell had recovered 125 stones of largerthan 10 ct in size. This included the 66-ct stone from Holpan, and twogemstones of over 100 ct from Saxendrift. It also recovered a 100-ctindustrial stone at Klipdam.
In the company's most recent diamond sale, it achieved an average of$1 735/ct, and reported a yearly average of $1 216/ct, which was about19% below its long-term average of $1 500/ct.
Rockwell sold 13 222,69 ct for the year, resulting in a revenuestream of just over $16-million to date.
The company had also received about $1,27-million as its portion ofprofit share from stones that have been beneficiated in terms ofRockwell's agreement with the Steinmetz Diamond Group (SDG).
This profit share had been derived from stones sold into the SDGbeneficiation agreement in November 2009 and February 2010. Bristow saidthat the company currently had a number of stones larger than 10 ctundergoing beneficiation and that it expected to achieve a regularincome flow from SDG during the 2011 financial year.
The company had carried out three tender sales so far in calendar2010 during the months of February, April and May.
In February, Rockwell sold some 5 887,57 ct at an average price of $1154/ct. In April, the company undertook a sale of 3 592,40 ct, and inMay, Rockwell sold a parcel of 3 034,30 ct, including a stone of 66 ctfrom its Holpan mine and two stones larger than 100 ct from itsSaxendrift mine. An average price of $1 735/ct was achieved during theMay sale.
FLAWLESS ACQUISITION
Meanwhile, Rockwell said that the 20% stake in FDTH, which it boughtfrom Hennie van Wyk, would provide it with access to additional revenue,allowing it to gain insight into diamond sales trends, which wouldassist its production and growth plans.
"Our investment in FDTH provides us with additional revenue flow andwill assist the company to better understand the demand from, andpenetration into, an international diamond market which is undergoingprogressive change with the emergence of strong new players in India andChina," commented Bristow.
FDTH was established in the premises of South Africa's high-securitydiamond trading and manufacturing hub known as Jewel City, located onCommissioner Street in Johannesburg. FDTH was established and is stillrun by diamantaire Jeffry Brenner.
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