RDI diamond revenue up 23 percent

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Reuters

File photo.

Johannesburg‚ Jan 2 (I-Net Bridge) - Canadian miner Rockwell Diamonds (RDI) which has interests in South Africa‚ on Wednesday announced a 23% improved revenue from diamond sales‚ before any sales from beneficiation‚ for the third quarter fiscal 2013 compared to the same period last year.

Total proceeds of US$7.4 million were generated compared to US$6.0 million for the same period a year ago and US$ 6.8 million for the second quarter.

A total of 4‚043 carats were sold at average price of US$1‚821 per carat; and although the number of carats sold was 25% lower‚ the sale of several high quality stones underpinned the 64% increase in the average price per carat over a year ago.

Carats sold from the Saxendrift Complex‚ comprising the Saxendrift Mine‚ the Saxendrift Extension and the Bulk X-ray plant increased by 10% to 1‚931 carats at an average price of US$3‚082 per carat. The average carat value of US$1‚768 for Saxendrift was down 7% on the same period last year‚ largely‚ because of the third quarter product mix. This price drop compared well to the 15% decline in the global market price for rough diamond prices in the +2 carat category that comprises most of the mine's production.

Sales of diamonds recovered from the Bulk X-ray plant‚ also at Saxendrift‚ generated total proceeds of $3.0 million from the sale of 284 carats‚ including a 145-carat rough diamond whose sale increased the average price per carat from the plant to US$10‚704.

Diamond sales from Tirisano totaled 214 carats; mining operations of Tirisano were placed on care and maintenance in the first week of December 2012‚ due primarily to persistent industrial relations issues.

Carats sold from Klipdam declined 25% for the quarter to 1‚490 carats while the average value declined only marginally to US$660 per carat.

In line with expectations‚ the grade was down 25% quarter on quarter as mining migrated out of the high-grade portion of the channel.

The company continued to produce large stones at all its operations‚ with 51 stones exceeding 10 carats recovered during the third quarter.

These diamonds were channelled into the company's beneficiation joint venture with Steinmetz Diamond Group (SDG)‚ which delivers value added future revenues for Rockwell's stones that are larger than 2.8 carats‚ once they have been polished and sold by SDG. Rockwell now has over 5‚500 carats in the beneficiation pipeline.

"The 23% year-on-year increase in diamond sales for the third quarter is a step in the right direction‚ reflecting improved operational efficiency and enhanced by several rare and high quality stones that were recovered. In particular‚ our operations in the Middle Orange‚ which are the engine of Rockwell's future growth‚ produced a number of diamonds exceeding 50 carats in size; there was a 64% increase in average price over a year ago to US$1‚821 per carat‚ in part because of that.

"The first cash flows from our royalty mining contracts were also realized‚" said Rockwell President and CEO James Campbell.

Commenting the diamond market‚ Campbell said: "Following weakness during the first part of the year‚ the diamond market started the third quarter on a cautious note. However‚ Rockwell experienced high level of interest at final tenders for the year‚ underpinning a willingness to pay slightly higher prices for our product. We are optimistic for next year‚ although the momentum of the market will be largely dependent on strong Christmas sales and further restocking of inventories. With an inventory of 2‚704 carats carried forward into the fourth quarter‚ we are well placed to take advantage of any possible restocking trend."

- I-Net Bridge


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