1. 2015
Tania R Marshall
Pr. Sci. Nat.
Explorations Unlimited
Glenn A Norton
Pr. Sci. Nat.
Rockwell Diamonds Inc.
TECHNICAL REPORT
ON THE NIEWEJAARSKRAAL ALLUVIAL DIAMOND PROJECT
(INCORPORATING THE NIEWEJAARSKRAAL AND VIEGULANDS PUTS
PROPERTIES),
HAY DISTRICT, REPUBLIC OF SOUTH AFRICA
FOR
ROCKWELL DIAMONDS INC
Effective Date: 28 February, 2015
Signature Date: 15 May, 2015
2. ROCKWELL DIAMONDS INC., NIEWEJAARSKRAAL PROJECT February 28, 2015
Table of Contents Page
SUMMARY ………………………………………………………………………………………………………………………………………..8
1 INTRODUCTION...........................................................................................................................................13
1.1 TERMS OF REFERENCE AND SCOPE OF WORK.......................................................................................................13
1.2 SOURCES OF INFORMATION..............................................................................................................................16
1.3 UNITS AND CURRENCY ....................................................................................................................................16
1.4 FIELD INVOLVEMENT OF QUALIFIED PERSONS ......................................................................................................16
1.5 USE OF DATA ................................................................................................................................................16
2 RELIANCE ON OTHER EXPERTS.....................................................................................................................18
2.1 LEGAL OPINION .............................................................................................................................................18
2.2 SURVEY........................................................................................................................................................18
2.3 DIAMOND VALUATION ....................................................................................................................................19
2.1 METALLURGY ................................................................................................................................................19
3 PROPERTY DESCRIPTION AND LOCATION ....................................................................................................20
3.1 PROPERTY DESCRIPTION AND LOCATION..............................................................................................................20
3.2 PERMITS CONTRACTS AND AGREEMENTS.............................................................................................................21
3.2.1 The Niewejaarskraal project.................................................................................................................21
3.2.2 Surface ownership / land use rights......................................................................................................23
3.2.3 Mineral rights (Mining/Prospecting Rights, permits, etc.)....................................................................23
3.2.3.1 Mining Rights ................................................................................................................................................23
3.2.3.2 Prospecting Right..........................................................................................................................................23
3.2.3.3 Royalty Payments..........................................................................................................................................25
3.3 BEE COMPLIANCE..........................................................................................................................................25
3.4 ENVIRONMENTAL...........................................................................................................................................25
3.4.1 Rehabilitation........................................................................................................................................26
3.4.2 Water Permits.......................................................................................................................................26
3.4.3 Mine closure..........................................................................................................................................26
3.5 SOCIAL RESPONSIBILITY ...................................................................................................................................26
3.6 ASSOCIATED RISKS..........................................................................................................................................27
4 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY ..............................28
4.1 TOPOGRAPHY, ELEVATION AND VEGETATION........................................................................................................28
4.2 ACCESS ........................................................................................................................................................30
4.3 PROXIMITY TO POPULATION CENTRES AND NATURE OF TRANSPORT ..........................................................................30
4.4 CLIMATE.......................................................................................................................................................30
4.5 INFRASTRUCTURE ...........................................................................................................................................31
4.5.1 Roads ....................................................................................................................................................31
4.5.2 Water....................................................................................................................................................32
4.5.3 Power....................................................................................................................................................33
4.5.4 Communication.....................................................................................................................................33
4.5.5 Mine Residue Deposits..........................................................................................................................33
4.5.6 Coarse Dumps .......................................................................................................................................35
4.5.7 Waste Disposal .....................................................................................................................................35
4.5.8 Fuel storage and supply........................................................................................................................35
4.5.9 Staff/Labour..........................................................................................................................................35
4.5.10 Accommodation and offices.............................................................................................................35
4.5.11 Security.............................................................................................................................................36
4.5.12 Essential services ..............................................................................................................................36
5 HISTORY ......................................................................................................................................................37
5.1 PREVIOUS OWNERSHIP....................................................................................................................................38
5.2 PREVIOUS EXPLORATION/DEVELOPMENT............................................................................................................38
5.2.1 Historical...............................................................................................................................................38
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4. ROCKWELL DIAMONDS INC., NIEWEJAARSKRAAL PROJECT February 28, 2015
13.3.3 Diamond Size Frequency Distribution (“SFD”) ..................................................................................98
13.3.3.1 Occurrence of Large Stones ........................................................................................................................102
13.3.4 Cut-off Screen Sizes.........................................................................................................................102
13.3.5 Diamond Value...............................................................................................................................103
13.3.6 Mineral Resource Statement..........................................................................................................104
13.4 PROSPECTING AND MINING RISKS....................................................................................................................104
13.4.1.1 In South Africa.............................................................................................................................................108
14 ADJACENT PROPERTIES .............................................................................................................................109
14.1 ELSIE’S DRIFT PROSPECT................................................................................................................................110
15 OTHER RELEVANT DATA AND INFORMATION............................................................................................112
15.1 EXPLORATION TARGETS.................................................................................................................................112
15.2 COUNTRY PROFILE........................................................................................................................................113
15.2.1 South African Economy...................................................................................................................113
15.2.2 The Mining Industry........................................................................................................................113
15.2.3 South Africa’s Mineral Legislative Environment.............................................................................114
15.2.3.1 Mineral Policy .............................................................................................................................................114
15.2.3.2 Mineral and Petroleum Resource Development Act 28 of 2002 (“MPRDA”)..............................................115
15.2.3.3 Broad Based Black Economic Empowerment (BBBEE) and the Mining Charter..........................................116
15.2.3.4 The Minerals and Petroleum Resources Royalty Bill...................................................................................117
15.2.3.5 The Diamond Amendment Bill....................................................................................................................118
15.2.3.6 Diamond Export Levy Bill 2007 ...................................................................................................................118
15.2.3.7 Precious Metals Bill and the Beneficiation Strategy ...................................................................................119
15.2.3.8 Kimberley Process.......................................................................................................................................119
16 INTERPRETATION AND CONCLUSIONS.......................................................................................................121
17 RECOMMENDATIONS................................................................................................................................124
17.1 PROPOSED WORK PROGRAMME .....................................................................................................................124
18 REFERENCES ..............................................................................................................................................126
DATE AND SIGNATURE PAGE .............................................................................................................................130
19 CERTIFICATE OF AUTHORS.........................................................................................................................131
19.1 TANIA RUTH MARSHALL................................................................................................................................131
19.2 GLENN ALAN NORTON..................................................................................................................................133
Figures
Figure 1.1 Location of Rockwell owned operations in South Africa.................................................... 14
Figure 1.2 Corporate shareholdings of Rockwell (2015) ..................................................................... 15
Figure 3.1: Location of the Niewejaarskraal project in the Northern Cape Province (the box is the area
shown in Fig. 3.2)................................................................................................................ 20
Figure 3.2 Location of the Niewejaarskraal Project Properties........................................................... 22
Figure 4.1 Average climatic conditions at Kimberley, (www.kimberley.climatemps.com)................. 31
Figure 4.2 Water balance on Niewejaarskraal (Petersen). .................................................................. 32
Figure 5.1 Historical diamond production from the Middle Orange River.......................................... 37
Figure 6.1 The General Geology of South Africa (redrawn from SACS, 1980) ................................... 41
Figure 6.2 Location of known terraces on the Niewejaarskraal project.............................................. 44
Figure 6.3 Schematic view of coarser gravel channel bars in a braided river system......................... 50
Figure 6.4: Fixed and mobile trapsites and their depositional environments (redrawn after Jacobs,
2005)................................................................................................................................... 53
Figure 6.5 Geological model for Niewejaarskraal (courtesy P Mohale, 2015) .................................... 55
Figure 7.1 Formation of eluvial gravels (Marshall, 2004) .................................................................... 60
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5. ROCKWELL DIAMONDS INC., NIEWEJAARSKRAAL PROJECT February 28, 2015
Figure 7.2 Formation of colluvial gravels (Marshall, 2004).................................................................. 61
Figure 8.1 Satellite snapshot, indicating the prevalence of centre-pivot irrigation schemes that limit
the use of satellite images, aerial photographs and geophysical techniques as primary
exploration methods (Source; Google Earth)..................................................................... 63
Figure 8.2 Location of Rockwell bulk-sampling during FY2014 ........................................................... 65
Figure 8.3 Grade variation with geological domain on the A terrace ................................................. 70
Figure 8.4 Grade Size plot for Niewejaarskraal data showing distribution of carats and stones. The Y-
axis is a measure of the stone density, calculated on a log-log scale (above) and average
grade per volume per size interval, calculated on a log-normal scale (below).................. 75
Figure 8.6 Graph of DMS recovery efficiencies ................................................................................... 76
Figure 9.1 Drill locations on Niewejaarskraal (Orange block represents the area in Fig. 9.3) ............. 78
Figure 9.2 Gravel thicknesses of the Rooikoppie and fluvial-alluvial units, derived from the THO
drilling data......................................................................................................................... 79
Figure 9.3 Infill drilling by Rockwell during 2014................................................................................. 80
Figure 9.4 Section through the drilling on Niewjaarskraal A terrace .................................................. 81
Figure 10.1 Schematic distribution of alluvial diamonds within an alluvial deposit – random
distribution of clusters of points (Rombouts, 1987)........................................................... 83
Figure 11.1 Example of carat and volume reconciliation ...................................................................... 88
Figure 13.1 The extremely low concentrations of diamonds, combined with low homogeneity results
insignificant difficulties in the evaluation of alluvial diamond deposits (after Lock, 2003) 96
Figure 13.2 Comparison of average diamond sizes from the Orange and Vaal Rivers and BHC........... 98
Figure 13.3 SFD of the Orange and Vaal River alluvial diamond populations, in comparison with BHC99
Figure 13.5 Grade Size plot for Niewejaarskraal in comparison with all of the Saxendrift terraces data
showing distribution of carats. The Y-axis is a measure of the average stone size per
volume, per size interval, calculated on a log-log scale ................................................... 100
Figure 13.4 SFD of the Niewejaarskraal diamond data, in comparison with recoveries from the other
terraces on Saxendrift mine ............................................................................................. 101
Figure 13.6 Number of large diamonds calculated to occur in MOR deposits.................................... 102
Figure 13.7 Resources identified on the Niewejaarskraal property.................................................... 105
Figure 14.1 Numerous properties around Niewejaarskraal have been prospected for diamonds..... 109
Figure 17.1 Proposed bulk-sampling/trial-mining areas on Niewejaarskraal ..................................... 124
Tables
Table 3.1: Co-ordinates of the Niewejaarskraal properties ................................................................ 21
Table 3.2 Summary of the Niewejaarskraal project landholdings...................................................... 24
Table 8.1 Bulk sampling results for the A terrace on Niewejaarskraal .............................................. 69
Table 8.2 Sales values for diamonds from Niewejaarskraal............................................................... 73
Table 8.3 High value stones recovered from Niewejaarskraal during 2014 ...................................... 74
Table 13.1 Mineral Resource statement for Niewejaarskraal as of March 2007 (Venmyn)................ 92
Table 13.2: Inferred Mineral Resources on Niewejaarskraal Project (as at 28 February 2009)............ 93
Table 13.3 Inferred Mineral Resources on Niewejaarskraal Project (as at 30 November 2010)......... 93
Table 13.4 Inferred Resources on Niewejaarskraal Project (as at 1 July, 2013)................................... 94
Table 13.5 Inferred Mineral Resources on Niewejaarskraal Project (as at 31 May 2014)................... 94
Table 13.6 Relationship between average USD/ct value and bottom cut-off size (“bcos”). ............. 103
Table 13.7 Inferred Mineral Resources on Niewejaarskraal Project (as at 28 Feb 2015) .................. 104
Table 15.1 Economic indicators for South Africa (March, 2015) www.tradingeconomics.com......... 113
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6. ROCKWELL DIAMONDS INC., NIEWEJAARSKRAAL PROJECT February 28, 2015
Plates
Plate 4.1: Landscape typical of the MORO properties........................................................................ 28
Plate 4.2 Grasses, trees and shrubs common to the Nama-Karoo biome ………………………………….....29
Plate 4.3 Mine residue dam on Niewejaarskraal............................................................................... 34
Plate 6.1 Dwyka tillite bedrock on which the alluvial gravels are developed on Niewejaarskraal.... 43
Plate 6.2 Calcrete makondos on the A terrace.................................................................................. 45
Plate 6.3: Boulder beds at the base of an exposed gravel trench on terrace A ................................. 45
Plate 6.5 A trench into Terrace B, showing the ±20m fluvial-alluvial sequence ............................... 46
Plate 6.6: Local structures and regional bedrock fabric contributes to diamond concentration within
the Middle Orange River..................................................................................................... 52
Plate 6.7 Low angle faults developed on the B-terrace..................................................................... 53
Plate 6.4 Reverse faulting associated with increased diamond concentration on the A Terrace..... 56
Plate 7.1 Typical stratigraphy of the fluvial alluvial gravels with a basal gravel overlain by a
“middlings” fluvial unit and separated from it by a widespread sandy unit. Overlying the
fluvial unit are the deflation or Rooikoppie gravels (Saxendrift mine)............................... 58
Plate 7.2 Eluvial gravels overlying the A terrace on Niewejaarskraal................................................ 60
Plate 8.1 Diamond locked up in calcrete that would be lost without proper liberation techniques 66
Plate 8.2 The IFS on Niewejaarskraal................................................................................................. 67
Plate 8.3 Secure, containerised unit containing the BV and VE recovery units ................................ 68
Plate 8.4 BIF-rich Gravels of Block 1 (A terrace)................................................................................ 71
Plate 8.5 Brown (BIF-poor) Gravels of Block 2 (A terrace)................................................................. 72
Plate 8.6 Massive Gravels of Block 3 (A terrace) ............................................................................... 72
Plate 8.7 Rooikoppie gravels overlying the A terrace........................................................................ 73
Plate 8.8 “Channel” type features in the calcreted fluvial-alluvial units, associated with thicker
Rooikoppie gravels (P Mohale) ........................................................................................... 74
Plate 10.1 Example of a secure lock-box in which the diamond concentrates are stored prior to final
hand sorting in a glove-box................................................................................................. 84
Plate 14.1 Reho Mining / Sonop bulk-sampling operation upstream of Niewejaarskraal and adjacent
to Rockwell’s Wouterspan Project.................................................................................... 110
Plate 14.2: Gravels on the C terrace on Elsiesdrift portion of Wouterspan ....................................... 111
Units and Abbreviations
ABBREVIATION DESCRIPTION
amsl Above mean sea level
BBBEE
Broad Based Black Economic Empowerment (the more correct term of the usually
shortened BEE (Black Economic Empowerment)) and used in this report
Bottom cut-off
(“bcos”)
Bottom cut-off refers to the smallest size diamond (in mm) that is recovered in the
sampling and mining process
Cdn$ Canadian Dollar
CIM Canadian Institute of Mining Metallurgy and Petroleum
CP Competent Person, as defined by SAMREC
cpht Carats per 100 Tonnes
ct Carat(s)
ct/100m3
Carats per 100 cubic metres
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7. ROCKWELL DIAMONDS INC., NIEWEJAARSKRAAL PROJECT February 28, 2015
ct/st Carats per Stone
DMR
Department of Mineral Resources (Previously known as Department of Minerals and
Energy (“DME”))
DMS Dense Media Separation plant
DTM Digital Terrain Model
DWS
Department of Water and Sanitation (previously Department of Water and Forestry
“DWAF”)
EMPlan Environmental Management Plan (as required for a prospecting right)
EMPR Environment Management Programme (as required for a mining right)
ESKOM Electricity Supply Commission
farm Surveyed area in South Africa, to which certain mineral rights can be held
GSSA Geological Society of South Africa
JSE Johannesburg Stock Exchange
m Metres
M Million
Ma Millions of Years before Present
MPRDA Mineral and Petroleum Resource Development Act (act 28 of 2002)
NAPEGG
The Association of Professional Engineers, Geologists and Geophysicists of the
Northwest Territories
NI 43-101 National Instrument 43-101
PLATO South African Council for Professional Land Surveyors and Technical Surveyors
Pr. Sci. Nat. Professional Natural Scientist
QP Qualified Person, as defined by National Instrument 43-101
SACNASP South African Council for Natural Scientific Professions
SAIMM South African Institute for Mining and Metallurgy
SAMREC South African Code for Reporting of Mineral Resources and Mineral Reserves
SARS South African Revenue Service
SG Specific Gravity
SLP Social & Labour Plan (as required for a mining right)
tph Tonnes (metric) per hour
TSX Toronto Stock Exchange
USD United States Dollar
ZAR South African Rand
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8. ROCKWELL DIAMONDS INC., NIEWEJAARSKRAAL PROJECT February 28, 2015
EXECUTIVE SUMMARY
Background
Explorations Unlimited (“EU”) was retained by Rockwell Diamonds Inc. (“Rockwell”) to prepare a
Technical Report for the Niewejaarskraal Project which is comprised of portions of the farms
Niewejaarskraal and Viegulands Puts in the Hay District of the Northern Cape Province of South Africa.
This Technical Report, comprising background information and drill and sample data, that includes the
bulk-sampling information derived from the property up to 28 February 2015, has been prepared to
document the results of exploration and the Mineral Resource estimate on the Niewejaarskraal
properties a summarised in the Company’s Annual Information Form for the 2016 fiscal year.
The conclusions expressed in this independent Technical Report are appropriate as at 28 February 2015.
The assessment is, therefore, only valid for this date and may change with time in response to ongoing
exploration and production results as well as with variations in economic, market, legal or political factors.
Rockwell is a company involved in the exploration and mining of alluvial diamond deposits.
• In South Africa, Rockwell and its wholly-owned subsidiary Rockwell Resources RSA (Pty) Ltd
(“Rockwell RSA”) owns 74% of Saxendrift Mine (Pty) Ltd, the vehicle which holds the Saxendrift,
Niewejaarskraal and Zwemkuil projects;
o Rockwell RSA operates Saxendrift Mine (including the Brakfontein Hill Complex and the
Saxendrift Hill Complex) and the Niewejaarskraal Project
• Through a Transaction and Shareholders agreement with Gump Mining cc, Rockwell RSA incorporated
a new company Gumrock Mining (Pty) Ltd (“Gumrock”) to carry out the prospecting and mining
activities on the Kwartelspan Complex project. Both Gump Mining cc and Rockwell RSA own 50% of
the issued shares, with shareholding to be diluted according to funding requirements and abilities.
• Rockwell RSA owns (through the acquisition of Jasper Mines (Pty) Ltd) and operates the Brakfontein
(Saxendrift River Complex) portion of the Saxendrift mining project;
• Rockwell and Rockwell RSA also owns (and Rockwell RSA operates) the Wouterspan Project (Middle
Orange River) through a 74% shareholding in HC Van Wyk Diamonds Limited (“HCVWD”);
• Through an acquisition of Bondeo 144 cc, Rockwell RSA will own and operate1
the Remhoogte and
Reads Drift projects.
Rockwell's 26% BEE partner of choice in these projects is Siyancuma Capital (Pty) Ltd (“Siyancuma”).
The Niewejaarskraal project is located on the south bank of the Orange River in the Herbert district of the
Northern Cape Province, some 57km southwest of Douglas and some 170km from Kimberley. The
following permits are valid for the project:
Property Name
Area
(ha)
Mineral
Right
Permit Number Renewal Date
Niewejaarskraal 40
Ptn (Ptn 6)
1766.390
New Order
Mining
Right
22/2006(MR)
NIEWEJAARSKRAAL
MR
MR Conversion
Granted
12/04/06 - valid
until 11/04/16Niewejaarskraal 40
Ptn (Ptn 4)
1 See Press Release of March 2 and March 9, 2015 for details of this acquisition
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9. ROCKWELL DIAMONDS INC., NIEWEJAARSKRAAL PROJECT February 28, 2015
Niewejaarskraal 40
Ptn (Ptn 2)
Viegulands Puts 39
Ptn Re/farm
Viegulands Puts 39
Ptn Re/farm
324.105
New Order
Prospecting
Right
(NC)30/5/1/1/2/465PR
100/2007 (PR)
Granted for
30/11/06 -
29/11/08
Renewal2
was
submitted
09/09/08
Renewal
accepted
22/09/08
Niewejaarskraal 40
Ptn (Ptn 6)
995.200
New Order
Prospecting
Right
(NC)30/5/1/1/2/209PR
214/2007 (PR)
Granted for
30/11/06-
29/11/08
Renewal 1
Submitted
09/09/08
Renewal
accepted
22/09/08
Geology
The present Orange River between Douglas and Prieska, generally referred to as the Middle Orange River
(MOR), displays a meandering channel morphology, best developed in areas underlain by the Dwyka
Group. Palaeochannel depositional packages of the Orange River are preserved at different elevations
above the present Orange River bed. The ages of the terraces young with decreasing elevation and,
conversely, the probability of preservation decreases with increasing age and elevation. The
Niewejaarskraal deposit comprises an extensive flat-lying alluvial sequence located on terraces developed
on the left bank of the present Orange River, approximately 20-70m above the Orange River. The bedrock
is well exposed in the workings and shale and tillite of the Karoo age Dwyka Group are common. The
fluvial-alluvial gravels comprise a sequence of (basal) gravels 2-4m thick overlain by generally less than
5m of variably calcreted sands and silts and covered by a thin layer of soil and scree. The cobble-sized
clasts within the gravels consist mostly of lava and quartzite with significant, if variable, amounts of
Banded Iron Formation (BIF), and minor amounts of limestone, tillite, and agate. The matrix is sandy to
gritty. As is usual with these types of deposits the degree of calcretisation decreases downwards, from
hardpan or laminar calcrete at the surface to loosely cemented gravels at depth. The gravels, which are
generally known to be diamondiferous, are, typically, not well sorted and are typical of braid bars that
migrate through sections of river channels in response to variable water speed.
Historical Results
2 Although Prospecting Rights are valid for only two years, as long as the renewal application has been submitted and accepted
prior to the lapse date, the Right remains in place until the renewal is granted or refused.
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10. ROCKWELL DIAMONDS INC., NIEWEJAARSKRAAL PROJECT February 28, 2015
Previous owner, Trans Hex Operations (Pty) Ltd (“THO”)3
, began trial-mining at Niewejaarskraal in 2001
and initiated full-scale operations in August 2002. Between 2002 and December 2005 when the operation
was put on Care & Maintenance, a total of 0.76Mm3
of gravel was mined, and 0.8 Mt was processed
through the Niewejaarskraal Dense Media Separation plant at an average recovered grade of
1.26ct/100m3
(Telfer, Stacey, Ecklund, & Bloomer, 2006).
A lack of original data from THO prompted Rockwell to embark upon a programme to confirm the
Diamond Resource estimate. During 2008, Rockwell reprocessed the available drilling data and re-
examined the production database. The entire Mineral Resource estimate was re-classified as “Inferred”
due to the lack of confidence in the original data. The Inferred Resources (volume) present on
Niewejaarskraal (Terraces A and B) were estimated at February 28, 2009 based on Rockwell’s criteria.
As part of their due diligence on Niewejaarskraal, Rockwell embarked on a limited bulk-sampling
programme in 2013 to confirm average grades and also obtain current diamond sales data. The gravel
profile had to be blasted due to the presence of a calcrete carapace. The gravel was excavated and
trucked to the plant site where it was dumped into hoppers and fed into a vibrating grizzly, with a screen
size of 150mm. The gravels was then fed through a double-deck screen. Thereafter, the plant feed was
directed into a Dense Media Separation (“DMS”) plant at 40-50tph. Floats from the DMS were moved by
conveyor to the tailings area and the sinks were sent to the FlowSort for final recovery and hand-sorting.
Four FlowSort units (two double-pass machines) were utilised, recovering in the +3-6mm, +6-12mm, +12-
24mm and +24-32mm fractions. The final diamond recovery was done in a glove box, the hands of the
picker being inserted into gloves attached to the cabinet, avoiding direct contact at all times. All diamonds
picked were dropped into a drop safe at the bottom of the glove box.
Although the original plant specifications called for a 5mm bottom screen size on the double-deck screen,
5x18mm slotted panels were actually fitted, resulting in an effective 6mm bottom cut-off size (“bcos”) –
an equivalent lower bottom average stone size of some 2.5mm. This has had a significant impact on stone
size and grade data, causing a drop of some 45% of number of stones within the resource and a 15%
decrease in carat recovery, but only a 1.5% decrease in revenue because of the higher value of larger
stones.
During FY2015, 913,412m3
of fluvial-alluvial gravel was processed to recover 4,816.28ct for a global
sample grade of 0.53ct/100m3
at an effective bcos of 6mm. Some 4,958.3ct4
were sold for an average of
USD1,706/ct. Although there is a dearth of large stones in the current sample, a number of high value
stones were recovered
A more detailed consideration of the sample variation on the A terrace indicates that grade and diamond
value is very closely associated with geological domains. As a result, the known A terrace has been divided
into three separate resource blocks, each with its own particular grade and value characteristics.
Mineral Resource Estimates
The Mineral Resources as at 28 February 2015 were estimated by Rockwell’s Manager, Resources, G. A.
Norton, (Pr. Sci. Nat.), a Qualified Person who is not independent of the Company and reviewed by Dr.
T.R. Marshall (Pr. Sci. Nat.), a Qualified Person who is independent of the Company and is responsible for
the estimate.
3 THO is a subsidiary of the Trans Hex Group Limited (“TransHex”).
4 This includes some diamonds from the FY2014 inventory
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11. ROCKWELL DIAMONDS INC., NIEWEJAARSKRAAL PROJECT February 28, 2015
Inferred Mineral Resources on Niewejaarskraal Project (as at 28 Feb 2015)
TERRACE
COMPLEX
RESOURCE
BLOCK
GEOLOGICAL
DOMAIN
VOLUME
(M³)
GRADE*
(CT/100M³)
VALUE*
(USD/CT)
A Terrace
Block 1
BIF-rich
brown gravels
6,286,000 0.5 1,850
Block 2
BIF-poor
brown gravels
3,420,000 0.3 1,850
Colluvial gravels 1,820,000 0.5 1,850
TOTAL INFERRED MINERAL RESOURCE 11,524,000 0.4 1,850
∗ Bcos = 6mm
∗ Both grade and diamond value of total Inferred Mineral Resource is a weighted average
∗ The diamond value is a 2-year trailing average
∗ All values/grades are rounded off to reflect the low level of confidence in the estimate.
Comparing the current Resource estimate with the previous year indicates that:
• The decrease in volume for Block 1 is due to depletion through sampling.
• The increase in colluvial gravel volume is a combination of depletion through sampling plus
increase through pitting on the edges of the terrace.
• No gravels from Block 2 have been sampled during this period, so there is no change to the
volume and grade.
• The grade of the colluvial gravels has increased from 0.3ct/100m3
to 0.5 ct/100m3
but the grade
of the BIF-rich gravels of Block 1 has decreased from 0.6ct/100m3
to 0.5 ct/100m3
A number of Exploration Targets have been identified on the Niewejaarskraal project:
1. Some 6-7Mm3
of gravel (both colluvial (Rooikoppie), and fluvial-alluvial gravels) has been identified
on the A5
and B terraces on Niewejaarskraal. Limited sampling indicates that potential grade ranges
on the total gravel package (Rooikoppie and fluvial-alluvial gravels) of 0.3-0.6ct/m3
might be
expected, with diamond values of USD1,800-USD3,000/ct, based on current recoveries from the A
terrace on Niewejaarskraal and from the B terrace on the nearby Saxendrift mine.
2. Approximately 800,000 – 1,000,000m3
of low grade/value fluvial-alluvial gravels located within
geological domain 3 on the A Terrace. Limited sampling of this unit indicates grades of 0.1-
0.3ct/100m3
with low values (USD900-1,400/ct) reflecting the small average diamond sizes
recovered.
3. Around 1-1.5Mm3
of gravel was identified by the THO reconnaissance drilling on the known C
terraces. Little is known regarding potential diamond grades, since no bulk sampling has been
completed on these terraces. However, average grade ranges are expected to be similar to the results
of the terraces on the nearby Saxendrift mine. Previous sampling on the Saxendrift property terraces
reflects grade ranges of 0.3-1.22ct/100m3
(Telfer & Stacey, 2007) and values of USD1,800-3,000/ct.
Similar grade ranges might be expected to occur on the terraces on Niewejaarskraal.
4. Furthermore, some 1,000-1,500ha of terraced areas (potentially terraces A, B, and C) have been
identified as target areas for future geophysical and drilling surveys.
5. Furthermore, some 1,000-1,500ha of terraced areas (potentially terraces A, B, and C) have been
identified as areas for future geophysical and drilling surveys.
It is important to note that these Exploration Targets, or statements of the potential quantity and grade,
are conceptual in nature. There has been insufficient exploration in these areas to define a mineral
resource and it is uncertain if further exploration will results in the targets being delineated as a mineral
resource. Further exploration programmes in these exploration target areas have been deferred until
trial mining re-commences.
5 This is in addition to the colluvial/Rooikoppie gravels included as a Mineral Resource on Terrace A
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12. ROCKWELL DIAMONDS INC., NIEWEJAARSKRAAL PROJECT February 28, 2015
Future (FY2016) Programme & Budget
Current techno-economic models of the Niewejaarskraal project, based on detailed geological and
diamond SFD studies, indicate that potential commercial diamond deposits are linked to specific
environments of deposition. Priority targets in the fluvial-alluvial gravels have been defined as high-
energy deposits such as are found within thalwegs incised into a braided floodplain. Initial sampling has
also indicated that Rooikoppie gravels on the flanks of terraces, where even low-grade gravels may have
been concentrated and upgraded by multiple colluvial processes, may also be of potentially commercial
interest.
In the light of this information, it is recommended that the FY2016 exploration programme be
concentrated in two areas. In the short term, further sampling of the Rooikoppie gravels should assist in
the understanding of the post-depositional events that enhanced the concentration of these deposits and
increase confidence in the grade and SFD models, with a goal (if the results are positive) of up-grading
the mineral resource in these areas to an Indicated category. This programme is expected to be
completed within Q1/2015 at an estimated cost of some ZAR15.8M per month. Diamonds recovered
during this programme are expected to offset the cost of doing the sampling.
The second area of interest relates to the fluvial-alluvial units. The high-speed thalweg deposits on
terrace A have been investigated and found to be of limited spatial extent. The fluvial-alluvial deposits
on terrace B have not yet been investigated in sufficient detail to identify these priority targets. It is
recommended that all of the existing boreholes on Terrace B be re-examined to highlight areas of interest.
Once these areas have been identified, additional boreholes should be drilled, where relevant, and
examined in terms of Rockwell’s gravel classification system to select areas for bulk-sampling.
Some ZAR4M has been budgeted for these geological studies, which will take place once the Rooikoppie
sampling has been completed.
The author believes that, notwithstanding the problems inherent in Mineral Resource and Mineral
Reserve estimations in alluvial diamond deposits, the results to date are sufficiently encouraging that the
Niewejaarskraal project warrants further sampling of the Rooikoppie gravels as well as further geological
investigation of the fluvial-alluvial deposits.
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13. ROCKWELL DIAMONDS INC., NIEWEJAARSKRAAL PROJECT February 28, 2015
1 INTRODUCTION
1.1 Terms of Reference and Scope of Work
Explorations Unlimited (“EU”) was retained by Rockwell Diamonds Inc. (“Rockwell”) to prepare a
Technical Report for the Niewejaarskraal Project which is comprised of portions of the farms
Niewejaarskraal and Viegulands Puts in the Hay District of the Northern Cape Province of South Africa.
This Technical Report comprises background information, drill and sample data, including results from
the bulk-sampling programmes, trial-mining and commercial production derived from the property up to
28 February 2015. It is prepared in order to document the results of exploration work and the Mineral
Resource and Reserve estimates on the properties as summarized in the Company’s Annual Information
Form for the 2015 fiscal year.
A number of documents dealing with the Niewejaarskraal properties have been filed on www.sedar.com
and submitted to the JSE Limited Stock Exchange
• “Independent Techno-Economic Valuation Report In The Form of a Competent Persons Report
on the Trans Hex Group Limited’s (“Trans Hex”) Middle Orange River (“Middle Orange”)
Operations” (2006) by Venmyn Rand
• “Independent Techno-Economic Valuation Report In The Form of a Competent Persons Report
on the Trans Hex Group Limited’s (“Trans Hex”) Middle Orange River (“Middle Orange”)
Operations” (updated 2007) by Venmyn Rand
• “Technical Report on the Niewejaarskraal alluvial diamond project, Hay District, The Republic of
South Africa”, for Rockwell Diamonds Inc. (effective date 28 February 2009), by T R Marshall
and G A Norton.
• “Technical Report on the Niewejaarskraal Alluvial Diamond Project, Hay District, The Republic
of South Africa”, for Rockwell Diamonds Inc. (effective date 30 November 2010) by T R Marshall
and G A Norton.
• “Revised Technical Report on the Niewejaarskraal Alluvial Diamond Project, Hay District, The
Republic of South Africa”, for Rockwell Diamonds Inc.(effective date 30 November 2010) by T R
Marshall and G A Norton.
• “Technical Report on the Niewejaarskraal Alluvial Diamond Project, Hay District, The Republic
of South Africa”, for Rockwell Diamonds Inc. (effective date 1 July, 2013)
• “Technical Report on the Niewejaarskraal Alluvial Diamond Project, Hay District, The Republic
of South Africa”, for Rockwell Diamonds Inc. (effective date 31 May, 2014)
Explorations Unlimited (“EU”) is a South African based consultancy owned by Dr Tania R Marshall that has
been operating since 1996. EU provides a variety of exploration and prospecting consulting services to
the international minerals community, in particular with respect to geological evaluation and financial
valuation of alluvial diamond mineral properties. This Technical Report was prepared, primarily, by Dr
T.R. Marshall (Pr. Sci. Nat.). Dr Marshall has over 20 years’ experience in the alluvial diamond industry,
including a background in international mineral exploration and evaluation studies and has had direct
experience with alluvial-eluvial diamond mining operations as a consulting geologist and, also, as an
operator. Dr Marshall’s experience includes operational and financial aspects of alluvial diamond mining,
including mine-planning and costing. Rockwell has accepted that the qualifications, expertise,
experience, competence, and professional reputation of Dr Marshall are appropriate and relevant for the
preparation of this Report.
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14. ROCKWELL DIAMONDS INC., NIEWEJAARSKRAAL PROJECT February 28, 2015
Rockwell, listed on the TSX (RDI) and the JSE (RDI), is a company involved in the exploration and mining
of alluvial diamond deposits in South Africa (Fig. 1.1 and Fig. 1.2). Rockwell's BEE partner in the Middle
Orange River operations is Siyancuma Capital (Pty) Ltd (“Siyancuma”).
Figure 1.1 Location of Rockwell owned operations in South Africa
• Rockwell and its wholly-owned subsidiary Rockwell Resources RSA (Pty) Ltd (“Rockwell RSA”) owns
74% of Saxendrift Mine (Pty) Ltd, the vehicle which holds the Saxendrift, Niewejaarskraal and
Zwemkuil projects;
o Rockwell RSA operates Saxendrift Mine (including the Brakfontein Hill Complex and the
Saxendrift Hill Complex)
o Rockwell RSA operates the Niewejaarskraal Project
• Rockwell RSA owns (through the acquisition of Jasper Mines (Pty) Ltd) and operates the Brakfontein
(Saxendrift River Complex) portion of the Saxendrift mining project;
• Rockwell and Rockwell RSA also owns (and Rockwell RSA operates) the Wouterspan Project (Middle
Orange River) through a 74% shareholding in HC Van Wyk Diamonds Limited (“HCVWD”);
• Through an acquisition of Bondeo6
144 cc, Rockwell Resources will own and operate the Remhoogte
and Reads Drift projects
• Rockwell owns7
100% of the equity in Etruscan Diamonds (Pty) Limited (an exploration company) and
74% in Blue Gum Diamonds (Pty) Limited. Blue Gum Diamonds Pty Limited owns the Tirisano mining
6 As announced by Rockwell on 5 January 2015. See also Press Release of March 2 and March 9, 2015 for details of this acquisition.
7 Subsequent to the date of this Technical Report, Rockwell announced (30 March 2015) that they have sold Etruscan Diamonds
(Pty) Ltd (including the Tirisano Mining Right and its associated infrastructure) for a cash consideration of USD6.3M to a consortium
comprising the royalty miners who have operated at Tirisano for the past two years.
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15. ROCKWELL DIAMONDS INC., NIEWEJAARSKRAAL PROJECT February 28, 2015
right. Rockwell’s operations at Tirisano are currently on care and maintenance but mining is taking
place through contract operators.
Figure 1.2 Corporate shareholdings of Rockwell (2015)
In addition to these mineral holdings, Rockwell owns a 20% stake in Flawless Diamond Trading House
(Proprietary) Limited ("FDTH"), thus providing a unique marketing and sales arm for Rockwell at a fee
which is well below the market norm. The acquisition, further, provides Rockwell with access to
additional revenue, and allows the Company to gain insight into diamond sales trends which will assist
with its short and long term production and growth plans.
The Technical Report was compiled, primarily, by Dr Marshall. Where the document refers to “the
author”, the senior (independent) QP, Dr Marshall, is referenced, unless otherwise indicated. The
document was co-authored by Mr Glenn Norton who is the Group Technical Manager for Rockwell
Diamonds Inc. Mr Norton has over ten years’ experience in the exploration and exploitation of alluvial
diamonds throughout Africa and is Rockwell’s in-house Qualified Person. This Technical Report has been
prepared in accordance with Canadian Securities Administrators’ National Instrument 43-101 - Standards
Of Disclosure For Mineral Projects (“NI 43-101”), the NAPEGG guidelines for the Reporting of Diamond
Exploration Results, Identified Mineral Resources and Ore Reserves and the Best Practice Guidelines
prepared by CIM to assist the QP in the planning, supervision, preparation and reporting of Mineral
Resource and Mineral Reserve (MRMR) estimates. The Mineral Resource estimate has, further, been
prepared with specific reference to the SAMREC code. In particular, the SAMREC Code provides
guidelines for the diamond industry. The SAMREC Code has also been incorporated into the JSE Listings
Rules. Since Rockwell is dual listed in both Canada and South Africa, reference will continually be made
to both CIM and SAMREC Mineral Resource estimation codes (with CIM taking preference as the
company’s primary listing is the TSX).
The conclusions expressed in this independent resource estimate are appropriate as at 28 February 2015.
The appraisal is, therefore, only valid for this date and will change with time in response to ongoing
exploration and production results as well as with variations in diverse external factors.
RockwellDiamondsInc
(RDI-TSX/JSE)
Rockwell Resources
RSA (Pty) Ltd
Saxendrift Mine (Pty) Ltd
("SAX")
Saxendrift Mine (BHC, SHC,
KPC)
Niewejaarskraal Project
Zwemkuil Project
Jasper Mine (Pty) Ltd
Brakfontein Property (SRC
Project)
H C Van Wyk Diamonds Ltd
("HCVWD")
Wouterspan Project
Bondeo 144 cc
("Bondeo")
Remhoogte Project
Reads Drift Project
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16. ROCKWELL DIAMONDS INC., NIEWEJAARSKRAAL PROJECT February 28, 2015
1.2 Sources of Information
The comments and recommendations in this report, specific to the Niewejaarskraal project, are based,
primarily, on information and technical documents and production data supplied by Rockwell. Underlying
legal contracts, permissions and agreements have not been reviewed by the author. Other
technical/scientific papers and miscellaneous documents referred to are identified within the text or have
been referenced in Section 21.
Since Dr Marshall was not on the site for the period of the prospecting and bulk-sampling, much reliance
was placed on the technical documents provided by THO, the previous owners of the project, and Venmyn
(who compiled NI43-101 technical reports for THO during 2006/2007). Dr Marshall has reviewed this data
and considers it to be reasonable for the purpose of this report. In these aspects, reliance has been placed
upon the relevant individuals providing the information, specifically Mr Glenn Norton (Group Technical
Manager) and Mr Gary Dorkin (Geological Manager) who are both registered with SACNASP and SAIMM
and also have the relevant experience to act as QP in their own right. Petronella Mohale is the site
geologist and is registered with SACNASP as “Natural Scientists in Training” and operates under the
supervision of Glenn Norton and Gary Dorkin.
1.3 Units and Currency
All values are metric, unless otherwise stated. Historical grade and tonnage figures are reported in units
as originally published. Diamond values are expressed in United States Dollars, for which a nominal
exchange rate of USD1 = ZAR12.50 has been used.
1.4 Field involvement of Qualified Persons
The latest site visit to Niewejaarskraal was undertaken by Dr Marshall during the week of 17-19 March,
2015. During this visit, a review was made of the proposed trial-mining and Pre-Feasibility study. In
addition, numerous discussions were held with the management and technical personnel of Rockwell,
who readily provided all requested information. EU’s extensive experience in this area (including previous
visits to the Property) as well as that gained from prior investigations of other, nearby deposits was also
drawn upon as required.
Mr Norton is Rockwell’s Group Technical Manager and, as such, visits the project on a regular basis.
1.5 Use of Data
Neither Explorations Unlimited nor family members have a business relationship with Rockwell or any
associated company, nor with any other company mentioned in the Report which is likely to materially
influence the impartiality of the Report, or create the perception that the credibility of the Report could
be compromised or biased in any way. The views expressed herein are genuine and deemed independent
of Rockwell. Moreover, neither the author of the report nor family members have any financial interest
in the outcome of any transaction involving the properties considered in this Report, other than the
payment of normal professional fees for the work undertaken in its preparation (which is based upon
hourly charge-out rates and reimbursement of expenses). The payment of such fees is not dependent
upon the content, or conclusions, of this Report or any consequences of any proposed transaction.
Rockwell has warranted that a full disclosure of all material information in its possession or control has
been made to EU, and that it is complete, accurate, true and not misleading. Draft copies of the Report
have been reviewed for factual errors by Rockwell. Any changes made as a result of these reviews did
not involve any alteration to the conclusions made. Hence, the statements and opinions expressed in this
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17. ROCKWELL DIAMONDS INC., NIEWEJAARSKRAAL PROJECT February 28, 2015
document are given in good faith and in the belief that such statements and opinions are not false and
misleading at the date of this Report.
Written consent is provided for the filing of the Technical Report with any stock exchange and other
regulatory authority and also for any publication by them of the Technical Report for regulatory purposes,
including electronic publication in the public company files on their websites accessible by the public. EU
reserves the right, but will not be obligated, to revise this Report and conclusions if additional information
becomes known to EU subsequent to the date of this Report.
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18. ROCKWELL DIAMONDS INC., NIEWEJAARSKRAAL PROJECT February 28, 2015
2 RELIANCE ON OTHER EXPERTS
2.1 Legal Opinion
An opinion regarding the underlying legal contracts, permissions and agreements was provided by
Director in Mining and Resources, Chris Stevens of Werksmans Attorneys on 01 April, 2015 – Rockwell
Diamonds Inc. – Title Opinion in respect of prospecting and mining rights held within Rockwell Group in
respect of the Middle Orange River Operations.
Chris Stevens is a director with Werksmans Attorneys where he is head of the firm's Mining and Resources
practice area. He advises on all aspects of mining law in South Africa, including in relation to commercial
arrangements, conveyancing, litigation, opinion work, black economic empowerment laws and due
diligence aspects. He advises many of the South African major mining houses on these aspects, as well
as medium size mining companies and junior exploration companies. He further advises numerous
American, UK, Canadian and Australian mining companies with interests in South Africa and acts for
numerous black empowerment companies in relation to mining transactions. He has also been involved
in numerous transactions for South African mining entities in sub-Saharan Africa. He has also been
integrally involved in advising numerous mining companies on various aspects of the Mineral and
Petroleum Resources Development Act, 28 of 2002, as well as the amendments to that legislation. Chris
Stevens co-lectured the LLB course at the University of the Witwatersrand on prospecting and mining law
in 1998 to 2007. He lectures at the University of the Witwatersrand to mining and engineering students
on compliance aspects and annually lectures at the University of Pretoria for MSc geology students in a
compliance course. He sat on the mining law committee of the International Bar Association in 2002 to
2006. Chris Stevens received B.Com and LLB degrees from the University of Witwatersrand and has been
practicing mining law since 1987. He was admitted as a notary public in 1990. Chris Stevens speaks at
numerous conferences, both in South Africa and internationally in relation to the South African mining
industry and, as such, is well qualified to produce reliable legal opinions on the Niewejaarskraal project.
The author has not independently verified the status of these contracts, permissions and agreements but
has accepted that the legal opinion represents a materially accurate situation. The author has relied on
this opinion for the compilation of Section 3.3.
2.2 Survey
The surveying on Saxendrift was completed by an independent survey services company, RBW Survey
(Pty) Ltd (contracted by Rockwell). The fieldwork and calculations is under the auspices of Roland Harms
(registered with The Institute of Mine Surveyors of South Africa), supported by qualified and trained
surveyors in the field. The legal appointment and signing off of month-end calculations and all prescribed
statutory plans are the responsibility of Werner Harms, appointed in terms of the Mines and Works Act
of 1956.
Weekly pre and post-profiling of all applicable surfaces is undertaken using a sub -1cm accuracy Real Time
Global Positioning System (“GPS”) instrument. A profile grid of ± 5m on even surfaces and 1m on uneven
surfaces is set up. Volumes are calculated using the “Model Maker Systems” software package, a
standard package, developed specifically for the technical and land surveying, engineering, mining, town-
planning, landscaping, quantity surveying, irrigation design and construction industries.
The standard checks implemented in the calculations include but are not limited to:
• Start-up checks to a maximum tolerance of 0.5cm.
• All profiling to be within 1cm of accuracy.
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19. ROCKWELL DIAMONDS INC., NIEWEJAARSKRAAL PROJECT February 28, 2015
• Volume calculations - manual editing of all DTM’s where necessary and comparing total volume
of excavations with grid volumes.
• Careful record keeping of stockpiles at the plant and in the pit.
• Communication between survey and mining.
• All volumes are reported at the middle and end of each month for a multiple of surfaces.
• Accuracy to comply with SAMREC – margin of error in the reporting volumes not to exceed 5% of
accuracy.
• Elimination of grey areas, such as lack of profiling, stockpiles and excavations not surveyed.
Once the area has been excavated and surveyed the surveyor also supplies the RAW data, volumes and
plan of the pit in DXF format to Rockwell’s Geology department. This allows for independent calculation
and comparisons of the resulting volume estimations, by both in-house and independent QP.
2.3 Diamond Valuation
Valuation of the recovered diamonds has been through the industry standard practice of putting
representative diamond parcels up for sale, either through Flawless Diamonds Tender House (“FDTH”) or
Diacore (previously known as Steinmetz Diamond Group.
• FDTH is a marketing and tender sale company (held 20% by Rockwell) that operates a professional
run, fully transparent “sealed-bid tender system”. Details of this process are described in a later
section.
• Diacore provides rough and polished diamonds to customers internationally and has
manufacturing facilities in Botswana, South Africa, Namibia and New York. The group is well-
known for its investment in rare and exceptional diamonds as well as for the creation of unique
high-end jewellery (amongst which are the 203.04ct De Beers Millennium Star and the 59.6ct
fancy vivid Steinmetz Pink.
Values obtained for diamonds through both these means represent actual sales completed in competitive
market by registered, practicing, international diamond buyers whose qualifications (and individual
identities) are unknown. Since the values thus obtained are actual, realised sales figures, and not simply
a valuation with no obligation to purchase, there are no risks associated with the diamond values used in
this technical report. These sales values have been relied upon by the author in all sections relating to
mineral resources. The author has checked each brokers note and Kimberley Process Certificate to verify
the information provided.
2.1 Metallurgy
Since June 2011, Dr. Kurt Petersen of Metal Dog Minerals has been contracted by Rockwell to assist and
advise on processing and metallurgical issues on all of their diamond projects. Dr Petersen holds an MSc
in Engineering Science from the University of Queensland (Australia) and a PhD in Metallurgy from
Stellenbosch University (South Africa). With more than 15 years’ experience in process modelling and
simulation (10 years specifically in the Diamond industry), Dr Petersen is highly experienced in the design
of diamond plants and optimisation of recovery performance.
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20. ROCKWELL DIAMONDS INC., NIEWEJAARSKRAAL PROJECT February 28, 2015
3 PROPERTY DESCRIPTION AND LOCATION
3.1 Property description and location
The Niewejaarskraal project is located along the south bank of the Middle Orange River between Douglas
and Prieska in the Northern Cape Province of South Africa (Fig. 3.1), which area has been the site of
intense alluvial diamond activity since the 19th
century. The Middle Orange River and, particularly, the
stretch between Douglas and Prieska, are historically important diamond mining centres, with alluvial
deposits having been mined here for over 100 years (De Wit, Ward, Jacob, Spaggiari, & van der
Westhuisen, 1997) (Marshall, 1987).
Figure 3.1: Location of the Niewejaarskraal project in the Northern Cape Province (the box is the area
shown in Fig. 3.2)
Niewejaarskraal Project lies some 13km downstream of the Saxendrift Mine, approximately 66km
southwest of Douglas and 110km southwest of Kimberley, the administrative capital of the Northern Cape
Province and the historic centre of the South African diamond mining industry.
The Niewejaarskraal project is comprised of the farms Niewejaarskraal 40 (two separate surveyed
portions of Ptn 6 and a portion of Ptn 4, and Portion of Portion 2) and re/farm) and Portion of the
Remainder Viegulands Puts 39 in the Prieska district of the Northern Cape Province (Fig. 3.2; Table
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21. ROCKWELL DIAMONDS INC., NIEWEJAARSKRAAL PROJECT February 28, 2015
3.1)).The area covered by the Mining Right is 1,766.39ha and includes sufficient space for (current and
future) mine offices and out-buildings, processing and final recovery facilities, as well as for the necessary,
fines disposal (tailings) ponds, transitory coarse dumps and more permanent water supply dams.
Table 3.1: Co-ordinates of the Niewejaarskraal properties
POINT UTM Y UTM X POINT UTM Y UTM X
A 6,749,223.65 707,048.52 T 6,748,035.56 706,684.08
B 6,747,887.15 709,449.30 U 6,748,417.87 706,555.59
C 6,747,540.27 709,728.45 V 6,748,510.86 706,149.07
D 6,745,436.32 711,415.28 W 6,748,310.13 705,837.55
E 6,743,602.59 710,519.18 X 6,748,491.72 705,455.56
F 6,742,798.05 709,196.00 Y 6,748,557.81 705,451.69
G 6,743,796.56 706,325.33 Z 6,748,319.51 704,589.38
H 6,744,471.41 706,599.56 A1 6,750,662.85 707,468.28
I 6,744,700.21 706,884.93 B1 6,747,940.39 710,662.56
J 6,744,813.54 706,911.40 C1 6,743,439.97 710,843.48
K 6,745,085.86 707,578.25 D1 6,742,112.14 708,771.11
L 6,745,252.84 707,246.46 E1 6,743,044.29 705,746.27
M 6,745,614.64 707,436.73 F1 6,743,571.06 706,234.44
N 6,745,952.15 708,814.60 G1 6,747,383.19 705,936.70
O 6,746,513.21 708,967.57 H1 6,747,682.09 705,304.65
P 6,746,815.13 708,544.23 I1 6,747,840.60 705,861.52
Q 6,746,663.67 707,466.61 J1 6,747,581.29 706,226.17
R 6,747,213.69 706,966.56 K1 6,747,648.18 706,408.37
S 6,747,301.19 706,752.52
3.2 Permits contracts and agreements
3.2.1 The Niewejaarskraal project
On March 6, 2007, Rockwell and Trans Hex Group Limited entered into a conditional agreement whereby
Rockwell’s wholly owned South African subsidiary, Rockwell Resources RSA (Pty) Ltd, would acquire two
open pit alluvial diamond mines and three alluvial diamond exploration projects from Trans Hex. At that
time, Trans Hex, through its wholly-owned subsidiary THO, was the owner of two open pit alluvial
diamond mines, namely Saxendrift and Niewejaarskraal, and three alluvial diamond exploration projects,
namely Kwartelspan-Kransfontein, Zwemkuil-Mooidraai and Remhoogte-Holsloot. All of these properties
are located along the southern bank of the Middle Orange River between Douglas and Prieska in the
Northern Cape Province of South Africa.
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22. ROCKWELL DIAMONDS INC., NIEWEJAARSKRAAL PROJECT February 28, 2015
Figure 3.2 Location of the Niewejaarskraal Project Properties
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23. ROCKWELL DIAMONDS INC., NIEWEJAARSKRAAL PROJECT February 28, 2015
The Transaction was substantially completed in April 2008 when the Ministerial consent to transfer the
Saxendrift mining right, as well as prospecting rights in respect of the Kwartelspan-Kransfontein,
Zwemkuil-Mooidraai and part of the Remhoogte-Holsloot projects, was obtained.
The Transaction was finally completed when Ministerial consent to transfer the Niewejaarskraal mining
right was received on 2 February 2009 and transfer of the Niewejaarskraal mining right indirectly to
Rockwell was registered on 4 March 2009. Rockwell elected not to extend the period within which the
Ministerial consent was to have been obtained in order to acquire the Remhoogte prospecting right and,
accordingly, Rockwell allowed its right to acquire this prospecting right to expire.
3.2.2 Surface ownership / land use rights
The Surface Rights to the mining properties are held by Die Nuwejaarskraal Testamentere Trust
(MT1601/2000) with whom Rockwell has land-use agreements in place to enable it to explore and mine.
The area of these surface rights is adequate for mining and its associated infrastructure.
In respect of the relevant portion of Portion 6 of Niewejaarskraal 40, Trans Hex has entered into a surface
use agreement with the registered owner of the property, a Mrs C Louw.
In terms of an agreement dated 14 December 2004, the landowner of Portion 4 of Viegulands Puts 39 (Mr
R Louw) sold the property to Trans Hex and Trans Hex has now taken transfer of the property in terms of
Deed of Transfer T 51279/2006 for a purchase price of ZAR1M.
3.2.3 Mineral rights (Mining/Prospecting Rights, permits, etc.)
All of the Niewejaarskraal rights, previously held by either TransHex or Mvelaphanda have been ceded to
Saxendrift Mine (Pty) Ltd and, therefore, are held 74% by Rockwell (and 26% by Rockwell's BEE partner –
see section 3.3).
3.2.3.1 Mining Rights
The Mining Right commenced on the 12 April 2006 and shall endure for a period of ten years, ending on
the 11 April 2016, subject to the ability for renewal in terms of the provisions of Section 18 of the MPRDA.
Ministerial consent in terms of Section 11 of the MPRDA was obtained and the converted mining right
was ceded by way of notarial session of converted mining right, which was executed on the 27 February
2009 and registered in the Mining Titles Registration Office on the 03 March 2009 under number 06/2009.
All mining activities are to be conducted by Saxendrift Mine (Pty) Ltd.
3.2.3.2 Prospecting Right
An application for Prospecting Right by Mvela was lodged and granted on the 30th
November 2006. The
prospecting right was duly notarially executed on the 15th
of February 2007 and registered as prospecting
right 214/2007 PR. The prospecting right endures for a period of two years commencing on the 30th
of
November 2006 and refers to a portion of Portion 6 of Niewejaarskraal no 40, namely 995.2 hectares.
Although Prospecting Rights are valid for only two years, as long as the renewal application has been
submitted and accepted prior to the lapse date, the Right remains in place until the renewal is granted or
refused.
Prospecting fees are ZAR1.00/ha/yr., escalating by ZAR0.50/yr. Once a renewal has been granted and
executed, prospecting fees increase to ZAR5.00/ha/yr., escalating annually by ZAR1.00/ha.
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24. ROCKWELL DIAMONDS INC., NIEWEJAARSKRAAL PROJECT February 28, 2015
Ministerial consent was obtained in terms of Section 11 of the MPRDA to cede the converted prospecting
right from Mvelaphanda to Saxendrift and was the consent granted on the 11 April 2008. The renewal
was applied for timeously and thus endures under section 18(5) of the MPRDA. The renewal was accepted
on the 22nd
of September 2008 but has the said renewal not been granted to date. The notarial deed of
session of prospecting right was executed on the 4th
of March 2008 and registered in the Mining Titles
Office on the 11th
of April 2008 under number 12/2008.
Table 3.2 Summary of the Niewejaarskraal project landholdings
Property Name
Area
(ha)
Mineral Right Permit Number Renewal Date
Niewejaarskraal 40
Ptn (Ptn 6)
1766.390
Saxendrift Mine
(Pty) Ltd
New Order Mining
Right
22/2006(MR)
NIEWEJAARSKRAAL
MR
11 April, 2016
Niewejaarskraal 40
Ptn (Ptn 4)
Niewejaarskraal 40
Ptn (Ptn 2)
Viegulands Put 39
Ptn Re/farm
Viegulands Put 39
Ptn Re/farm
324.105
New Order
Prospecting Right
(NC)30/5/1/1/2/465PR
100/2007 (PRC)
Granted –
30/11/06 -
29/11/2008
Renewal
submitted
09/09/08
Renewal accepted
22/09/08
In Process
Niewejaarskraal 40
Ptn (Ptn 6)
995.200
New Order
Prospecting Right
(NC)30/5/1/1/2/209PR
214/2007 (PRC)
Granted. –
30/11/06-
29/11/08
Renewal
Submitted
09/09/08
Renewal accepted
22/09/08
In Process
An application has been submitted to DMR, in which all of these rights are to be combined in a single
licence (which includes all of the Saxendrift holdings). The application (NC277MR) was accepted by DMR
on 5 Nov 2010 and is still in progress.
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25. ROCKWELL DIAMONDS INC., NIEWEJAARSKRAAL PROJECT February 28, 2015
3.2.3.3 Royalty Payments
As with all mining properties in South Africa, the Niewejaarskraal project is subject to a State royalty. The
minimum and maximum rates for diamonds (unrefined minerals) are 0.5% and 7.0%, respectively. During
FY2015, Rockwell paid some ZAR 229,047.56 to the State as royalties for the Niewejaarskraal project.
3.3 BEE Compliance
On 6 October 2014, Rockwell RSA and others concluded a consolidated sale of shares agreement with
Siyancuma Capital (Pty) Ltd (“Siyancuma”) in terms of which Rockwell RSA agreed to sell 30% of the shares
in Saxendrift, HCVWD and Jasper to Siyancuma (“Sale Agreement”).
Mr Richard Mhlonto (currently Group HR/Industrial Relations Manager for Rockwell RSA) and Mr Oupa
Sekhukhune are currently the ultimate shareholders in Siyancuma. In due course, a trust8
established for
the benefit of Rockwell RSA employees will acquire 30% of the shares in Siyancuma.
The Sale Agreement is currently subject to the fulfilment of certain suspensive conditions (including
approval from the Company’s shareholders due to Siyancuma being a related party to the Company) but
will, on its implementation9
, satisfy the equity ownership requirements of the Broad-Based Socio-
Economic Empowerment Charter for the South African Mining Industry. The DMR is aware and has been
kept informed of these developments.
3.4 Environmental
Since 2000, THO has submitted four Environmental Management Programmes (EMPR’s) relating to the
Niewejaarskraal Project properties to the relevant government departments. The latest was prepared by
THO on behalf of Mvela Exploration and submitted to the DME in 2003. These EMPR’s remain valid until
Rockwell consolidates all the Niewejaarskraal and Saxendrift permits into a single right. The key points
of the current EMPR, summarised from Venmyn, 2007, are:
• Due to the historical mining, the capability of the soil and land to support wildlife or farming activities
has been lost. Post mining rehabilitation will have a positive impact on the areas by restoring the
land’s former capacity;
• There are no highly endangered species known within the mining areas which are at risk, however,
the Shepherds Bush (Boscia albutrunca) is to be protected, where possible. As part of the EMP,
Rockwell has permission to remove these trees where necessary, in return for an obligation to plant
indigenous trees in suitable places as part of a greening project. Such permission/obligation is
ongoing and is completed as part of the regular (internal, company) environmental audit process;
• All mine water must remain within a closed system to ensure that no pollution reaches the Orange
River;
• On-going rehabilitation of mined out areas should be done on a regular basis;
• The operation provides employment and knock-on effects in a rural area of South Africa with a high
unemployment rate;
• The cost associated with the destruction of any pivot irrigation farming areas on the lower terraces
may render these deposits uneconomic.
8 As of 15 April, 2015 a draft Trust deed is in place and formal consultations with the relevant Union is expected to commence
shortly.
9 A second addendum has been signed between the parties extending the completion date to end June 2015.
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26. ROCKWELL DIAMONDS INC., NIEWEJAARSKRAAL PROJECT February 28, 2015
In compliance with Section 55 of the Mineral and Petroleum Resources Development Act, 2002 (Act No.
28 of 2002), the applicant will, in order to ensure the continued appropriateness and adequacy of this
environmental Management Programme, conduct monitoring and performance assessment thereof an a
continuance basis. Performance assessment reports will be submitted to the Minister in this regard. Such
performance assessments will be conducted every two years as is prescribed by the Mineral and
Petroleum Resources Development Act, 2002 (Act No. 28 of 2002). A compliance presentation was made
to the full environmental complement of the DMR in July 2014, with no issues raised, except to request
an additional ZAR10M increase in the rehabilitation fund.
3.4.1 Rehabilitation
THO estimated its rehabilitation liabilities for Niewejaarskraal in December 2005. Estimations were made
for both sudden closure and planned closure or decommissioning, as required by the DME. The current
(as at January 2015) rehabilitation liability on Niewejaarskraal project has been calculated at
ZAR15,541,986. Rockwell has created a trust fund to cover the rehabilitation guarantees for the
Niewejaarskraal project and is in the process of replacing all of the THO guarantees with their own.
3.4.2 Water Permits
Water usage licences are required for the mining operations and for the processing of bulk samples during
prospecting operations. Niewejaarskraal Project has a Licence (# B212/77(395)) to pump 450,000 cubic
metres per annum (m3
pa) and 222,000m3
pa from the Orange River for use on Portion 8 of Reads Drift 74
and Remaining Extent of Portion 6 of Niewejaarskraal 40, respectively. This was issued for prospecting
activities in September 2002 in the name of Northern Cape Diamond Mining & Exploration (“NCDM&E”)
and is valid for a period of ten years (i.e. until 2012). This licence also allows the project to dispose of
waste water to the amount of 24,000 m3
pa into a mine residue dam facility with a capacity of 105,240m3
,
on the condition that aquatic habitat and waste water quality monitoring occurs on a regular basis. This
licence has not been upgraded to that for a mining operation.
Water licences are not transferable and Rockwell has had to reapply for the licence in its own name. In
the interim, however, arrangements have been made with the Department of Water Affairs and Forestry
(DWAF) to lease the permit from NCDM&E, so as not to interrupt mining operations on Niewejaarskraal.
During this time, water measurements will be taken as required by law, and submitted on a TransHex
letterhead until the Rockwell licence is in place.
3.4.3 Mine closure
Even prior to the re-opening of Niewejaarskraal, plans are being made to ensure that the eventual mine
closure plans will, as far as it is reasonably practicable, rehabilitate the environment affected by any
proposed mining operation to its natural or a predetermined state or to a land use which conforms to the
generally accepted principle of sustainable development. More specifically, the management of
environmental impacts will form an integral part of the proposed mining operation. Negative impacts on
the environmental rights will, for as far as is practicable, be anticipated and prevented, and where they
cannot be altogether prevented, be both minimised and remedied.
3.5 Social Responsibility
Along with focused business objectives, Rockwell's social responsibility values and commitments form an
integral part of the mining operations. Rockwell is committed to providing increased returns to
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shareholders while sharing the value created from the operations with a wider set of stakeholders
through the alignment and linkage of business and social responsibilities.
According to the MRPDA a Social and Labour Plan (“SLP”) is required to be submitted to the DMR along
with the other requirements for a mining right. The objectives of the SLP (according to the MPRDA) is to
promote employment and advance the social and economic welfare of all South Africans; to contribute
to the transformation of the mining industry; and to ensure that holders of mining rights contribute
toward the socio-economic development of the areas in which they are operating, as well as the areas
from which the majority of the workforce is sourced. In harmony with these objectives, the SLP requires
that the company address literacy levels and life skills within the workforce as well as implement career
progression paths, mentorships, internships and bursary plans for its employees. In addition, the
company is required to contribute to the upliftment and development of the local communities through
procurement, establishment of a Future Forum and the creation of Small, Micro and Medium Enterprises
(SMME’s).
3.6 Associated Risks
The prospecting and mining business is both risky and speculative. This Technical Report identifies some
of the factors that are likely to affect the company and the project, as well as the value of its securities.
However, this is not an exhaustive list and investors should seek professional advice for further clarification
of the risks involved before deciding whether to invest in the diamond mining industry.
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 Mineral Resource estimates and estimates of future
production and future cash and total costs of production and diminishing quantities or grades if 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 used to report 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; and labour strikes, work stoppages, or other interruptions to, or difficulties in, the
employment of labour, or environmental hazards, industrial accidents or other events or occurrences,
including third party interference that interrupt operation of mines or development projects.
To the extent known, no specific risks exist that may affect access, title or right, or the ability of Rockwell
to perform work on the properties comprising the Saxendrift project. However, generalised risks
associated with prospecting and mining are always present. These issues are discussed more fully in
Section 13.2 and will not be repeated here.
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4 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY
4.1 Topography, elevation and vegetation
The project area is situated in a region of gently undulating hills on the edge of the Karoo, an area of
sparse, arid semi desert that occupies much of central South Africa. The area comprises elevated
palaeoriver terraces at elevations of between 1,100m and 1,000m above mean sea level (“amsl”), some
60-70m above the present Orange River. The terraces are cut by a number of small ephemeral streams
that flow towards the Orange River. The surrounding terrain (Plate 4.1) is a flat semi-desert environment
with sparse grass and occasional shrubs, thorn bushes and succulents in a sandy soil. Bigger trees often
line the banks of the Orange River.
Plate 4.1: Landscape typical of the MORO properties
Since no exploration or mining activities will be undertaken in the present river channel, bank-full
discharge conditions will have no effect on operations. Even during floods, the effect on operations will
be negligible, since the narrow, modern-day floodplains are not exploration targets.
There are an estimated 5,400 plant species in the Northern Cape Province. The largest part of the
province falls within the Nama-Karoo biome, the third largest biome in South Africa, covering about 20.5%
of the country or more than 260,000 km2
. It stretches across the vast central plateau of the western half
of the country.
The dominant vegetation is a grassy, dwarf shrubland. Grasses tend to be more common in depressions
and on sandy soils, and less abundant on clayey soils. Grazing rapidly increases the relative abundance
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29. ROCKWELL DIAMONDS INC., NIEWEJAARSKRAAL PROJECT February 28, 2015
of shrubs. Most of the grasses are of the C4 type and, like the shrubs, are deciduous in response to rainfall
events. Sweet Thorn Acacia karroo occurs in many places along the banks of the Orange River (Plate 4.2).
Plate 4.2
Grasses, trees
and shrubs
common to the
Nama-Karoo
biome
The amount and nature of the fuel load is insufficient to carry fires and fires are rare within the biome.
The large historical herds of Springbok and other game no longer exist. Like the many bird species in the
area - mainly larks - the game was probably nomadic between patches of rainfall events within the biome.
The Brown Locust and Karoo Caterpillar exhibit eruptions under similarly favourable, local rainfall events,
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30. ROCKWELL DIAMONDS INC., NIEWEJAARSKRAAL PROJECT February 28, 2015
and attract large numbers of bird and mammal predators. Common animals include the Bat-Eared Fox,
Ostrich, Spring Hare, and tortoises. The Riverine Rabbit is a threatened species found in the Nama Karoo.
Less than 1% of the biome is conserved in formal areas. The Prickly Pear Opuntia aurantiaca and Mesquite
Prosopis glandulosa are the major alien invader species. Urbanization and agriculture are minimal, and
irrigation is confined to the Orange River valley and some pans. Most of the land is used for grazing, by
sheep (for mutton, wool and pelts) and goats, which can be commensurate with conservation. However,
under conditions of overgrazing, many indigenous species may proliferate, including Threethorn
Rhigozum trichotomum, Bitterbos Chrysocoma ciliata and Sweet Thorn Acacia karroo, and many grasses
and other palatable species may be lost. There are very few rare or Red Data Book plant species in the
Nama Karoo Biome, however the Shepherd’s Bush (Boscia albutrunca) is a protected species that occurs
widely.
4.2 Access
The project is some 182km from Kimberley and Barkly West via route R357 from Douglas to Prieska south
of the Orange River. For reference, Kimberley is some 570km from Johannesburg and can be accessed by
national road as well as by rail and air services. The sufficiency of surface rights for mining operations,
the availability and sources of power, water, mining personnel, potential tailings storage areas, potential
waste disposal areas, and potential processing plant sites will all be determined by the trial-mining during
FY2014 and will be described in a forthcoming Technical Report.
4.3 Proximity to population centres and nature of transport
The project is situated some 176km from Kimberley and Barkly West via route R357 from Douglas to
Prieska, south along the Orange River. Douglas and Prieska are some 70km and 60km distant from the
Niewejaarskraal operation, respectively. For reference, Kimberley is some 570km from Johannesburg and
can be accessed by national road as well as by rail and air services.
4.4 Climate
Kimberley is situated very close to the geographic centre of South Africa in the Northern Cape at an
altitude of some 1,196m (3,924ft). The Northern Cape climate (Fig. 4.1) is mainly semi desert – this is a
large dry region of fluctuating temperatures and varying topographies. The annual rainfall is sparse, only
50 to 400mm per annum. The average is 256mm, mostly in the form of spectacular summer
thunderstorms. The average annual evaporation rate is measured at 2,524mm. The low rainfall and high
evaporation rates result in extremely dry conditions. Daytime temperatures can be extreme and vary
from lows of around in winter to highs of around 42°C in summer. Average temperatures, however, are
in the range between a winter minimum of 3°C to a summer maximum of 33°C.
In summer (December to February), temperatures in the Northern Cape usually reach between 33°C and
42°C (in 1948 a recorded high of 52°C was measured along the Orange River). During winter (June to
August), daytime temperatures are cold to mild (-5°C to 22°C), and often drop below 0°C at night.
The mine has a year-round operating season and prevailing climatic conditions do not impact on the
mining operation to any significant degree. Disruptions, however, do occur due to poor road conditions
following heavy rains and three-to-four hour down-time may occur when soaked gravel stockpiles are too
wet to process efficiently. During years of exceptional rainfall flooding may occur, resulting in significant
disruptions to production, as well as damage to infrastructure (municipal as well as on-mine).
Frosts occur in winter and hail can occur in summer. The prevailing winds are from the east (June to
October) and the southwest (October to January). The average monthly wind speeds are generally below
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6.3 m/s. Strong winds may be experienced on occasions. The strongest winds are from the northwest
which, although resulting in unpleasant working conditions, do not disrupt operations.
Figure 4.1 Average climatic conditions at Kimberley, (www.kimberley.climatemps.com)
4.5 Infrastructure
To the extent determined by the bulk-sampling programme, the sufficiency of surface rights for mining
operations, the availability and sources of power, water, mining personnel, potential tailings storage
areas, potential waste disposal areas, and potential processing plant sites are all described below.
4.5.1 Roads
The Niewejaarskraal project area is best accessed via Saxendrift Mine, along tarred route R357 from
Douglas to Prieska. A well-maintained network of high-speed gravel roads and farm tracks provides
ingress to all areas of the Niewejaarskraal mining and prospecting area. Within the limits of the project
area, water-bowsers spray the roads to limit dust.
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An unpaved airstrip is situated on the farm Saxendrift 20, adjacent to Saxendrift Mine. A helipad is located
on both Wouterspan and Saxendrift mine. A large, national airport is located at Kimberley.
4.5.2 Water
The operations are located next to the Orange River and the necessary pumping stations and water supply
pipelines are in place to provide a year-round water supply. The project sources water from the Orange
River, currently under a licence to pump 672,000m3
per annum. The operation is planned to consume a
total of 350,000m3
per annum and additional licences have been requested from DWAF. In essence,
however, water for the project is pumped from the river, via a pipeline to a reservoir. The water is then
directed to the various plants (Fig.). Waste water together with the fines is pumped to the mine residue
dam after which recycled water is returned to the processing plants. Recycling could return up to 90% of
incoming water (at worst, 30%).
Figure 4.2 Water balance on Niewejaarskraal (highlighted are the points where water is added to the
plant – 1. Scalping screen for +36 mm material and sending -10 mm undersize to next screen.
Water addition is through sprayers and larger volumes as dilution water. 2. Undersize removal
screen of -3 mm material. This screen also takes all of the water from the scalping screen (1.). 3.
Addition of water to grits removal screens that treat head feed material and scrubbed material
undersize. 4. The Scrubber requires water for washing. 5. Scrubber screen has spray water. 6.
Coarse DMS uses water for medium make-up and rinsing. 7. Fines DMS as per coarse DMS. 8.
Recovery plant uses water in the X-ray machines. 9. General wash water (Petersen).
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4.5.3 Power
The property is connected to the national Electricity Supply Commission (ESKOM) electricity grid, with the
necessary transformers and supply lines in place. Power is provided through a 22kV line. Voltage is
decreased to 400V through a transformer on site and distributed as required. Rockwell will establish a
trust account to cover various ESCOM guarantees – currently it is all covered by the Saxendrift mine.
South Africa’s ability to satisfy the electricity requirements of all its users has been highlighted in the press
since 2008. Numerous initiatives have been instituted by both government and private enterprise in
order to prevent this from becoming a serious problem, including the commissioning of two additional
coal-fired power stations (Medupi and Kusile), due to come on-line within the next five years. In the short
term, however, power shortages and, subsequent, load-shedding will undoubtedly have an impact on
short term costs and production, although an aggressive programme to reduce operating costs and
eliminate unnecessary expenses has been initiated at all of the Company's mines and operations. In spite
of the power outages affecting business and mining ventures in South Africa. Rockwell’s projects continue
to operate although, at times, with interruptions.
To this end, Rockwell management has moved rapidly to conduct an operational review of the situation
and implement remedial actions to mitigate the consequences of the power outages, including:
• All scheduled and planned maintenance is to be conducted during periods of power outages to reduce
overall plant downtime.
• 2 x 1MvA backup generators are installed at Niewejaarskraal, to run the processing plants in the event
of unscheduled power outages.
• A back-up generator set has also been installed at the Barkly West management and administration
office to ensure that there is minimal impact on normal business activities of the Company and that
all computer functions, back-up servers, and CCTV monitoring systems remain operational.
Further, Rockwell staff liaises with local and regional ESKOM offices in order to receive advance notice of
reduced power availability and scheduled power outages. Furthermore, Rockwell has purchased all
available power, as other users have scaled down (or closed down) their operations. For example, when
SONOP closed down their operation on Elsie’s Drift (adjacent to Wouterspan project), Rockwell was able
to purchase 3.5MvA for their own use.
4.5.4 Communication
The communication system has been upgraded to link the Barkly West office, the Johannesburg Head
Office, and all of the MOR properties on a Multiprotocol Label Switching (“MPLS”) network. The system
was planned to limit the cost of internal calls between the sites, reducing the monthly Telkom bill.
Included in this system is a (1Mb Diginet leased line and a 3Mb Internet breakout) Internet connection
between the sites (provided by Internet Solutions). At each site the MPLS network connects to the
internet on a centralised firewall.
A Samsung telephone system provides external voice communication as well as VOIP via the main Diginet
line. On-mine communication for production personnel is conducted through two-way, short-wave (HF)
radios. Three cellular telephone networks are also available for project personnel as well as for personal
communication.
4.5.5 Mine Residue Deposits
There are two Mine Residue Dams (“MRD”) on Niewejaarskraal with a total capacity of 81,000m3
(Plate
4.3). The MRD dams drains into two return water and clear water dams, where some 30% of the water
is recovered.
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34. ROCKWELL DIAMONDS INC., NIEWEJAARSKRAAL PROJECT February 28, 2015
Plate 4.3 Mine residue dam on Niewejaarskraal (above and below)
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