VANCOUVER, April 17, 2017 /CNW/ - Rockwell Diamonds Inc.
("Rockwell" or the "Company") (TSX:RDI; JSE:RDI) provides an update to the interim liquidation order against three
subsidiaries of the Company issued by a judge in Kimberley, South
Africa, on March 23, 2017. The interim orders, which have yet to be confirmed in a final
hearing, include Rockwell Resources RSA (Pty) Ltd (Rockwell RSA), HC van Wyk Diamonds Ltd (HC van Wyk) and Saxendrift Mine (Pty)
Ltd (Saxendrift). Interim liquidators have been appointed by the Master of the High Court, in accordance with requisitions by the
major creditors. However, in view of further filings by the Company, the interim liquidators will not take control of the three
companies, which remain in operation by Company personnel. The Wouterspan plant is nearing completion, with ore being processed
through lines 1 and 2 and commissioning of line 3 now complete, to be followed by the ramp-up in processing rate.
On March 31, 2017 the Company filed a motion with the court in Kimberley, South Africa, on an urgent basis to bring the date forward to
consider the merits of the liquidation case brought by C-Rock Mining on which an interim liquidation order was issued on
23 March 2017. The interim order was issued after a short hearing where none of the Company's
rebuttal evidence was considered by the court. The date for the final hearing was originally scheduled for June 22, 2017, however based on an application for the matter to be brought forward on an urgent basis, a
motion was set down for a hearing on April 12, 2017. The hearing, however, was postponed to
April 19, 2017 due to the fact that the Kimberley High Court is currently in recess and the Acting
Judge on duty on April 12, 2017 was conflicted and therefore recused herself.
The Company has subsequently filed for business rescue. The effect of a business rescue filing is that any liquidation order
is automatically stayed. If successful in its application for business rescue, a business rescue practitioner will be appointed
to work with Company management to restructure the affairs of the Company, seeking input and consent from creditors and well as
considering strategic alternatives. The business rescue regime does not have a directly analogous structure in Canadian
restructuring practice, and is primarily aimed at enabling a company to continue trading on a solvent basis after conclusion of
the business rescue process.
In view of the fact that 96% of the dollar value of Company creditors support the Company's plans, the Company now believes
that this support should be a significant factor in likely restructuring options. In particular, the business plan comprised the
provision of a USD $8M in loan capital, completing the Wouterspan plant with such proceeds, a
focus on cost reduction, efficiency improvements, the sale of certain redundant assets, the pay down of all creditors under
ZAR50,000, and the purchase of all recent plant and mine supplies on a cash only basis. The
implementation of this business plan is well advanced despite the frustrating intervention by C-Rock Mining.
The remaining task is to complete the commissioning and ramp-up the production rate of the processing plant at Wouterspan and
relocate the Holsloot plant to Stofdraai (the northern edge of Wouterspan).
The Company remains persuaded that its case for dismissal of the liquidation application is sound, and after a full hearing it
believes it should prevail and C-Rock Mining's actions will be shown to be spurious and without foundation.
About Rockwell Diamonds:
Rockwell is engaged in the business of operating and developing alluvial diamond deposits. The Company also evaluates
consolidation opportunities that have the potential to expand its mineral resources and production profile and provide accretive
value to the Company.
Rockwell is known for producing large, high quality gemstones comprising a major portion of its diamond recoveries. This is
enhanced through a beneficiation joint venture that enables Rockwell to participate in the profits on the sale of the polished
and certain re-traded diamonds, which are not beneficiated.
Rockwell has set a strategic goal to become a mid-tier diamond production company. In pursuit of this goal the Company has
embarked on a strategy to grow its Middle Orange River ("MOR") operational base and minimise production and recovery volatility
by setting a medium term target to process 500,000m3 of gravels per month from its MOR operations.
Rockwell's common shares trade on the Toronto Stock Exchange and the JSE Limited under the symbol "RDI".
No regulatory authority has approved or disapproved the information contained in this news release.
Forward Looking Statements
Except for statements of historical fact, this news release contains certain "forward-looking information" within the
meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "plan", "expect",
"project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions
"may" or "will" occur. Although the Company believes the expectations expressed in such forward-looking statements are based on
reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ
materially from those in the forward-looking statements.
Factors that could cause actual results to differ materially from those in forward-looking statements include uncertainties
and costs related to the transaction and the ability of each party to satisfy the conditions precedent in a timely manner or at
all, exploration and development activities, such as those related to determining whether mineral resources exist on a property;
uncertainties related to expected production rates, timing of production and cash and total costs of production and milling;
uncertainties related to the ability to obtain necessary licenses, permits, electricity, surface rights and title for development
projects; operating and technical difficulties in connection with mining development activities; uncertainties related to the
accuracy of our mineral resource estimates and our estimates of future production and future cash and total
costs of production and diminishing quantities or grades of mineral resources; uncertainties related to unexpected judicial
or regulatory procedures or changes in, and the effects of, the laws, regulations and government policies affecting our mining
operations; changes in general economic conditions, the financial markets and the demand and market price for mineral
commodities such as diesel fuel, steel, concrete, electricity, and other forms of energy, mining equipment, and
fluctuations in exchange rates, particularly with respect to the value of the US dollar, Canadian dollar and South
African Rand; changes in accounting policies and methods that we use to report our financial condition, including uncertainties
associated with critical accounting assumptions and estimates; environmental issues and liabilities associated with mining and
processing; geopolitical uncertainty and political and economic instability in countries in which we operate; and labour
strikes, work stoppages, or other interruptions to, or difficulties in, the employment of labour in markets in which we operate
our mines, or environmental hazards, industrial accidents or other events or occurrences, including third party
interference that interrupt operation of our mines or development projects.
For further information on Rockwell, Investors should review Rockwell's home jurisdiction filings that are available at
www.sedar.com.
SOURCE Rockwell Diamonds Inc.
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