Mining Review Rockwell Diamonds Wouterspan Project

1. • INDUSTRY REPORT | DIAMONDS IN SOUTHERN AFRICA
When the going gets tough
Rockwell Diamonds
gets going
TSX/JSE-listed alluvial diamond
miner Rockwell Diamonds has
become known for its resilience,
tenacity and determination to
achieve its production target
– mining 500 000 m³/month
from its Middle Orange River
(MOR) project portfolio –
regardless of market conditions
or operational challenges. The
imminent re-introduction of
Wouterspan, last mined in
2009, sees the company take
another positive step closer
towards realising this goal,
writes LAURA CORNISH.
period for the alluvial diamond
specialist over the last 12 months. In
spite of this, the company has risen to
and embraced these difficulties and,
in typical Rockwell Diamonds style,
implemented a number of changes
which has repositioned it more
comfortably for the immediate and
long-term future.
This more specifically includes
the acquisition of the Remhoogte
Holsloot Complex (RHC) in May 2015,
the security of additional resources to
extend the mining life of Saxendrift,
general processing improvements
and most importantly, the speedy
redevelopment of its large-scale
Wouterspan operation.
The company also closed its head
office in Johannesburg in January
this year and relocated key staff (including
CEO and president James Campbell) to site
where a more hands-on approach in just a
few short months has delivered immediate
improvements at both a corporate and
operational level.
Wouterspan – the emerging crown
jewel
Located near Douglas in in the Northern
Cape, the R125 million Wouterspan project
is on the brink of being commissioned and
brought into production – around August
T
he combination of weak
diamond prices, pending
closure of Saxendrift and
underperformance of
Niewejaarskraal which led to its closure in
July last year has resulted in a challenging
40 MINING REVIEW AFRICA | JULY 2016
Wouterspan represents a modern day
equivalent of the Saxendrift plant but
with superior engineering standards
Rockwell Diamonds has incorporated five Bourevestnik
machines into Wouterspan’s plant footprint to process both
fine and medium faction material

2. MINING REVIEW AFRICA | JULY 2016 41
INDUSTRY REPORT | DIAMONDS IN SOUTHERN AFRICA
•
this year – just five months after the board
gave the project the go ahead (on the
provision that it could be delivered as cost
effectively as possible).
“And we did so, without raising
equity or taking on too much debt,”says
Campbell. Wouterspan has been built
using components from the dormant
Niewejaarskraal and Saxendrift Hill
Complex (SHC) plants. Mining partner CML
also supplied necessary conveyors, bins
and screens from the previously Exxaro-
owned Tshikondeni coal operation which it
bought out of liquidation.
Although designed to deliver the exact
same run-of-mine (ROM) throughput as
Saxendrift – 200 000 m3/month (m3/m),
Wouterspan represents a modern day
equivalent plant with superior engineering
standards Rockwell Diamonds has never
seen or implemented before.“It comprises
significantly wider conveyor belts, has
greater redundancy and comprises feed
bins for storage capacity between sections
for example.”
A true advocate of the Russian-
developed Bourevestnik diamond sorting
technology, Rockwell Diamonds has
incorporated five of these machines into
the plant’s footprint to process both fine
and medium faction material. XRT (X-Ray
transmission) sorters will process the
coarser stones – in place of a DMS circuit or
pan feeders,”Campbell outlines.
While the plant itself represents a new
modern mining era for Rockwell Diamonds,
so does the company’s planned production
start-up.“Our business is driven by volumes
and the recovery of +-100 carat stones
which has traditionally taken a number
of months to achieve with our previous
operation start-ups. Our approach to
Wouterspan is to commission the plant
by August and ramp-up to nameplate
capacity as quickly as possible thereafter
to provide us with the necessary economy
of scale and access to the larger stones as
quickly as possible,”Campbell explains.
imminent closure of the main Saxendrift
operation.
The 2 634 ha property, including
two operational plants (out of three), is
producing about 0.85 carats for every
100 m3 mined and averages about
US$1 600/carat although this number was
significantly higher for its Q1, 2017 results.
RHC averaged $1 944/carat in this period
owing to the recovery and incidence of
larger stones which generally occurs after
increasing processing volumes.
A new in-field screening capability
installed late in FY 2016 together with
an improvement in earthmoving vehicle
availability was reflected in the notable
increase in volumes mined and processed
(up 30% and 42% respectively in Q1, 2017
compared to Q4, 2016).
While Campbell notes that the project
has another three years of operational
lifespan, he notes that the company is
currently determining if/how this can be
extended.
Saxendrift delivers to the very end
Saxendrift, Rockwell Diamonds’bread-and-
butter cash flow for such a considerable
portion of its history, continues to represent
the company’s unique determination
to extract maximum value beyond any
shareholder or stakeholder’s expectation
from a single asset – even as it approaches
the end of its life.
The operation has been under review
for closure since the middle of 2015 but
Rockwell Diamonds has continued to push
Holsloot 91 carat Remhoogte 67 carat Saxendrift 57 carat Saxendrift 60 carat
Middle Orange River Diamonds (+50 carats): April – May 2016
“Wouterspan
represents our chance
to start afresh and
we have built the
plant and positioned
the operation
to last,” James
Campbell
This timing is also well aligned to
Saxendrift’s operational status – which
should start ramping down in August
as well. This will enable the company to
relocate its personnel and earthmoving
equipment between operations seamlessly.
“Wouterspan represents our chance to
start afresh and we have built the plant and
positioned the operation to last.”With a
40 million cubic metre resource spanning
nearly 7 500 ha, the project will produce
diamonds for at least 10 years, which is
above-average for alluvial deposits in the
region.“We also have high expectations for
its high-quality stone output thanks to the
mine’s previous delivery of blue and yellow
diamonds. It will undeniably be the jewel
in our portfolio crown.”
Remhoogte Holsloot
complex (RHC) finds its
comfort zone
The 150 000 m3/m RHC
operation, situated 195 km
south west of Kimberley, could
be considered a blessing for
Rockwell Diamonds and a key
strategic asset in aiding the company
to rebuild its production profile and MOR
footprint after SHC closed in June 2015 –
and even more so when coupled with the
in our p
Re
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c
T
o
so
be
Rockw
strategic
200 000 m³/m
Wouterspan’s nameplate
capacity which it hopes
to reach as quickly
after commissioning
(August 2016) as
possible
A view of the pan feeders at the Saxendrift plant

3. • INDUSTRY REPORT | DIAMONDS IN SOUTHERN AFRICA
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the mine beyond its limits, preventing
retrenchments and building working
capital to help fund the construction of
Wouterspan.
“Having mined all the paleo gravels we
could we needed to find additional and
unaccounted for resource and fortunately,
were able to,”Campbell reveals. The
company successfully found a considerable
volume of buried middlings material
which previous owners Trans Hex and
Gem Diamonds originally chose not to
process. It was used to rehabilitate an old
pit and remained untouched. Situated no
deeper than 10/15 m below surface, the
material is easy to mine and process.“Since
this initiative started in August 2015, the
operation has been cash flow break-even.”
The final stretch to 500 000 m³/m
At 350 000 m3/m, Wouterspan and RHC
already positions Rockwell Diamonds more
than halfway towards its 500 000 m3/m
production target. The company does
however have promising plans in the
pipeline to deliver on this in the medium
term future.
“Late in 2014 we acquired a large land
package in the MOR region with the
necessary prospecting and mining licences
and are confident that the area comprises
a number of potentially valuable properties
which could be developed into mining
operations. We have already started looking
at some exciting areas and hope to start
bulk sampling in 2017. This undoubtedly
provides us with the opportunity to build at
least one more mine and push us towards
or even over our target.”
Campbell is in fact an exploration
specialist and during his time at De Beers
was part of the team that discovered
the Klipspringer and Oaks mines in
Limpopo. He also contributed towards the
development of the AK6 (now Karowe)
mine when also with De Beers and then
African Diamonds. Essentially, this means
he is well positioned to fulfil the final leg
of growing Rockwell Diamonds’growth
strategy through exploration and new mine
development.
Kimberlite opportunities
Campbell is confident that the opportunity
to discover a feasible kimberlite in southern
Africa exists and as such, the CEO and
his team are determined to expand the
Rockwell Diamond portfolio to include a
kimberlite. This will not happen overnight
however and requires a lot of patience
and persistence – two qualities Rockwell
Diamonds also has in abundance.
“The barriers to entry in South Africa
in particular are so high at present that
investors are reluctant to invest and
support the industry – because kimberlite
discoveries are so rare and because there
is such an abundance of in-country
complexity to deal with including black
economic empowerment, uncertain
legislation conditions and overall high
political risk. Rockwell has however proven
that it can overcome such challenges – in
an open and transparent manner – making
us the ideal company to explore for
kimberlites.”
Regardless of circumstances, both those
which can and cannot be controlled,
Rockwell Diamonds continues to break
barriers and learn from its experiences.
Perseverance is critical to its sustainability
and Campbell (together with his team)
continue to display their steadfast
determination to reach 500 000 m3/m and
reap the rewards that will naturally result
from this achievement thereafter. MRA
WHAT HAPPENED AT NIEWERJAARSKRAAL?
The average quality of diamonds recovered from the Greenfields Niewejaarskraal operation,
situated almost adjacent to Saxendrift, was not in line with expectations according to the
information available to Rockwell Diamonds. As a result, the project did not deliver the average
dollar per carat necessary to sustain the operation, which was built in 2014.
“There is an assumption that all the diamonds across our MOR properties have similar
assortments – but Niewejaarskraal proved this is not the case,”says Campbell. For now, it
remains on care and maintenance.
Saxendrift continues to contribute tonnages
to the Rockwell Diamonds production portfolio
Processing diamonds at RHC
RHC is a 150 000 m³m alluvial operation

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