Business rescue process is expected to be completed before the end of September
THE BUSINESS rescue process of alluvial diamond miner Rockwell Diamonds is expected to be completed before the end of September.
The company said in a statement issued this week that the business rescue of its three Northern Cape mines, Rockwell Resources, HC van Wyk Diamonds and Saxendrift, was ongoing, with the objective to return the companies to solvency.
“The appointed business rescue practitioners are actively working alongside the companies’ management to prepare a business rescue plan which will deal with all claims against the subsidiaries, to be published on or before September 30, 2017.”
Announcing its results for the three months ended May 31, the company said that a total of 359 carats were recovered with eight stones larger than 10 carats, for an average price of $ 2 599 per carat.
“All phases of the Wouterspan Processing Plant have now been commissioned; however, some bottlenecks and design shortcomings have been identified and work is ongoing to address these,” Rockwell said.
The plant can now be run at a throughput rate that varies between 100 t/* and 150 t/* , depending on the type of gravel being treated, which, despite improvements, remains low.
In terms of operating results, Rockwell experienced a total comprehensive loss of $2.7 million for the quarter, which, according to the company, was primarily driven by no completed operations being conducted during the period, resulting in very few diamonds recovered to cover operational costs and overheads.
“The diamond market for the months March to May 2017 was active with a steady demand. The Hong Kong Jewellery show at the beginning of March had steady demand and prices remained stable. Sellers tried to achieve higher prices, but there was resistance from buyers. The Basel show towards the end of March – which is known for high-end watch and jewellery sales – had a slower than usual demand for larger diamonds. This was also evident in auctions during this period where prices of larger diamonds were relatively soft compared to the previous year,” the company said.
“De Beers had two sights during this quarter, occurring at the end of March and beginning of May, with sales of $580m and $520m respectively. Alrosa had increased sales over this period with no increases in prices. The demand for rough diamonds during this period was strong, and particularly in the secondary market, partly due to the reduced supply by DTC. The prices of rough compared to polished prices remain relatively high with profitability under pressure.”