Saxendrift resource summary July 2013

1. ROCKWELL RESOURCES RSA (PTY) LTD Technical Statement
(as at 28 February, 2013) NI 43-101
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Independent Qualified Person Dr. Tania R Marshall (Pr. Sci. Nat) of Explorations Unlimited, South Africa
Non-Independent QP Mr Glenn A Norton (Pr. Sci. Nat.) of Rockwell Resources Inc
Effective Date 28 February, 2013
Prepared for Rockwell Diamonds Inc
Purpose Annual Information Form and Mineral Resource/Reserve Update
Company Year End 28 February
Personal Inspection
Site visits by independent QP 19-21 February 2013. All operating areas, infrastructure and
plants visited
General Location
Located in the Hay district of the Northern Cape Province of RSA, some 110km southwest of
Kimberley. The operations are on Saxendrift 20 and Annex Saxesdrift 21 (5,142.52ha),
Brakfontein 276 (615.92ha) as well as Kwartelspan 25 and Kransfontein 19 (903.65)
Licence Status
The Saxendrift mine right (28/2008MR) is valid until 2018. A Prospecting Right (in the name
of HC van Wyk) is valid until 2010 (renewal was accepted by DMR on 03/2010). The Mining
Right on Brakfontein was granted 02/2013. The Prospecting Right renewal for the
Kwartelspan section was submitted in 2008 and re-submitted 01/2012.
BEE Compliance
African Vanguard Resources owns 26% of the Saxendrift project. An accepted Social &
Labour Plan is in place, covering all of the Rockwell operations.
Climate, Infrastructure, Access
Saxendrift project is located in an arid to semi-arid, Karoo environment. Electrical power and
water resources have been accounted for. Mining personal readily available and regularly
rotated. Tailings and waste disposal sites have been identified and are currently in use.
Operations accessed by good network of all-weather gravel roads.
Deposit Types
Alluvial diamond deposits preserved in fluvial-alluvial palaeochannel and deflation gravels
(Rooikoppie) in Orange River terraces.
GEOLOGICAL SETTING
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 MOR are preserved at different
elevations above the present Orange River bed. Three
Terraces Complexes have been identified on the Saxendrift
mine – Brakfontein Hill (BHC), Saxendrift Hill (SHC) and
Saxendrift River (SRC).
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2. ROCKWELL RESOURCES RSA (PTY) LTD Technical Statement
(as at 28 February, 2013) NI 43-101
SSaaxxeennddrriifftt
MMiinnee
The ages of these terraces young with decreasing elevation and
vary from Pleistocene-Pliocene for the lower terraces to Plio-
Miocene for the upper terraces. Conversely, the probability of
preservation decreases with increasing age and elevation. The
bedrock is well exposed in the workings and shale and tillite of
the Karoo age Dwyka Group, are common. The bedrock
displays an irregular erosional surface with gully and pothole
features creating high diamond trapping potential.
Diamondiferous Rooikoppie gravel scree slopes higher than the
oldest preserved fluvial deposits suggest that even older and
higher elevation palaeo-deposits were present and have been
removed completely by erosion.
The primary sources of diamonds trapped in the palaeo-gravels
of the Orange River are kimberlites and intermediate secondary
sources like eluvial, colluvial and fluvial deposits in the
catchment regions of the Vaal and Orange rivers.
In the range of deposits on Saxendrift, and within the context
of the model presented, diamonds were first deposited in
gravel units at an elevation of + 110m above the present river.
As a result of consecutive cycles of continental uplift and
erosion, the oldest diamondiferous gravels deposited by the
Orange River have been recycled and re-deposited repeatedly
through time down to the lowest level gravels as preserved
today.
Thin (<2m), extensive Rooikoppie blanket the property. The
fluvial-alluvial sequence is comprised of a basal gravel overlain
by a generally upward-fining sequence with hanging gravel
lenses known as “Middlings”. The sequence is covered by a
(non-silcreted) calcrete cap, generally less than 5m thick. Post-
depositional weathering of this calcrete has formed solution
hollows called “makondos” which are often filled with diamond-
enriched Rooikoppie gravels.
Profile through the fluvial-alluvial gravel unit overlain by
Rooikoppie gravels in makondos
MINERALISATION
The palaeochannel gravels are mineralised by diamonds
derived from the weathering and erosion of kimberlites present
in the headwaters of the palaeo-Vaal River system. Colluvial
and eluvial post-depositional modification of these fluvial-
alluvial deposits resulted in the formation of the Rooikoppie
gravels.
Numerous studies have shown that the majority of the alluvial
diamonds in gravel deposits along the Vaal River are derived
from two distinct gravel horizons. These comprise an upper
deflation deposit (Rooikoppie) and an underlying (Primary
fluvial-alluvial) gravel unit. The Rooikoppie is not an alluvial
deposit, but rather a lag-derived or deflation deposit.
Subsequent to its deposition, the terrace gravel has been
calcreted through the evaporation and subsequent re-
deposition of carbonate-rich meteoric water during relatively
dry periods. This has led to the replacement of both the matrix
material and all but the most siliceous clasts by calcrete.
Spaces between the clasts of this gravel were later filled with
wind-blown iron-stained sand.
The primary palaeo-fluvial succession comprises various
proportions of gravel, sand and silt. Cross-bedded, fine-
grained to granular sand layers and lenses reflect lateral
stream migration and point bar build-out. Stacked, upward
fining sand to pebbly sand to gravel cycles generally represent
channel fill deposition. Very fine-grained silty sands reflect
upper meander deposits that formed prior to meander cut-off
(ox- bow lake phase). Massive, clast-supported gravel beds
are generally chaotic without any visible gradation or layering.
Most of the primary sedimentary features have been destroyed
by the subsequent calcretisation. The poorly sorted gravels
vary from pebble to cobble gravels, generally with a fair
percentage of boulders (rarely + 1m diameter). Interbedded
sandy or granule beds and lenses occur frequently in more
sandy, matrix supported gravel successions.
DRILLING
The existing THO drill database was used to estimate the gravel
volumes present on the BHC and SHC terraces. During FY2013
Rockwell completed a drilling programme on SRC. After the
data had been verified volume estimation was completed using
two software programmes. Based on Rockwell's standard
criteria, the Indicated and Inferred resource volumes present
on Saxendrift were estimated and figures represent volumes
available in the ground, fully depleted of material removed by
the trial mining programme.
Drilling on SRC has highlighted a significant palaeo-
channel, sub-parallel to the Orange River
SAMPLING
Due to the nature of mineralization of alluvial diamond deposits
with low grades and large stone sizes, it is not possible to
assay for diamond. To date no other minerals or elements that
can be assayed are known to show positive (or negative)
relationships with diamonds in alluvial deposits. Consequently,
neither borehole nor pit samples are collected for assay.
Rather, large bulk-samples are typically processed to determine
in-situ grades and diamond qualities.
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3. ROCKWELL RESOURCES RSA (PTY) LTD Technical Statement
(as at 28 February, 2013) NI 43-101
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During 2008 Rockwell bulk-sampled the BHC upper B1-terrace
– some 164,492m4
was processed to recover 1,999.74ct at an
average grade of 1.2ct/100m3
. In 2012, the SRC C3-terrace
was bulk-sampled with 611,260m3
of processed to recover
3,696.58cts for an average sample grade of 0.60ct/100m3
.
PRE-FEASIBILITY STUDY
During 2009/2010 trial-mining was completed on BHC, as part
of a Pre-Feasibility study to determine what portion of the
gravel resource could be converted to a reserve. Trial-mining
on the SRC and SHC areas was initiated during 2012 and
continues into 2013. The processing of the SHC will be through
the new Bourevestnik (BV) bulk X-ray plant, whereas the SRC
gravels will be processed through the main Saxendrift plant
(rotary pans)
PRODUCTION MINING
During 2012, production mining was initiated on BHC. The
excavating of the gravels during commercial operations is
planned to use techniques virtually identically to those
employed during the bulk-sampling and trial-mining operations.
Vegetation is cleared from the proposed mining block and
where present, the topsoil is removed and stored separately for
use in later rehabilitation. On BHC, the entire gravel profile is
excavated ,loaded into ADT’s and transported to the In-Field
Screening Plant (“IFS”).
During excavation, care is taken to ensure that minimal
contamination by the footwall lithologies occurs, especially
where small pothole features need to be cleaned out.
However, where the bedrock is soft, approximately 10-20cm of
bedrock is excavated with the gravels, so that any diamonds in
the weathered rock will be recovered (often it is the larger
stones that are found near the bottom of the gravel profile, at
the bedrock interface or in the decomposed bedrock material).
Where the upper 2-3m of the fluvial-alluvial sequence is
calcreted to varying degrees (usually laminar, hardpan or
silcrete levels), the mining block may need to be blasted prior
to excavation. The broken calcrete material is then ripped by a
bulldozer, stripped off using hydraulic excavators, loaded onto
ADT’s and transported to the plant site for further processing.
Run of mine through the IFS is 900 tph, supplying 600tph to
the double-deck screen. The plant scalps in three stages,
initially at -75mm (in the barrel screen) and, secondly, at -
55+5mm and has been designed to remove some 94% of the
(-5mm) sand fraction. In addition to scalping/sizing, the
screening plant also has two (5,000 gauss) Nd-Bo-Ferrite
magnets that remove significant amounts of BIF and other Fe-
rich clasts from the gravels prior to transport to the processing
plant.
The processing plant is comprised of four scrubbers followed by
four 18 ft rotary pan-plants. Final recovery is through a bank
of twelve FLOWSORT machines, followed by hand-sorting in a
glove-box under secure conditions. Access to all areas of the
final recovery is controlled and monitored by protection
personnel and CCTV.
Various tests are done throughout the month to test efficiency
of the wet plant and final recovery, including pan density tests,
pan crash test, tracer and bort test, and particle size
distribution test. The pan density test includes comparing the
density of the material going into and out of the pans. Pan
crash test involves doing density test to compare the pan
profile from the tapper to the tailings weir. Tracer and bort
test are done at the wet plant to test the scrubbers and pans,
and at the final recovery to test the efficiency of the machines.
Rotary pan plants and scrubbers on BHC
During the period February 2009 – February 2013, the average
grade returned from the mining of BHC gravels was
0.51ct/100m3
During FY2013, 4,477ct were sold for an
averaged recovered value of USD1,900/ct. The cost of
production (FY2013) was ZAR77/m3
(over the previous year’s
cost of ZAR67/m3
. The annual expected cash costs have
increased due increases in the cost of fuel, salaries and
maintenance.
MINERAL RESOURCE/RESERVE ESTIMATES
During FY2012, Pre-feasibility studies on BHC had shown that a
bottom cut-off size (“bcos”) of 5mm would be more cost-
efficient and profitable than the previous bcos of 2mm and,
consequently, all trial-mining and production mining on BHC
proceeded at this bcos. Going forward, all terrace complexes
on the Saxendrift mine will be tested for similarity. In order to
allow for ease of comparison across the various mining areas,
average grades and diamond values will be shown at bcos of
both 5mm and 2mm, where the original sampling was
completed at 2mm bcos (Saxendrift Hill Complex and
Kwartelspan)
The mineral resources at 28 February 2013 were estimated by
Rockwell’s Manager, Resources, G. 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. Comparing the resource figures with the
previous technical report it is important to note:
• There has been no change in the resource estimate for the
B2 terrace of the Saxendrift Hill Complex. These deposits
will be trial-mined during 2013 and the PFS results will be
presented in a forthcoming Technical Report.
• There has been no change in the Kwartelspan resources.
• Grades/values for both SHC (for Inferred Resource
classification only)and Kwartelspan are presented at bcos
of both 2mm and 5mm
• On BHC, the moving average for the past two financial
years based on the sale of 10,382.8ct is USD2,400/ct.
This has been selected in an attempt to smooth out short-
term irregularities in the diamond price.
o FY2012, the average sales price was USD2,444/ct
(5mm bcos from November 2011 and 2mm from
February to October 2011). This is equivalent to
USD2,800/ct at 5mm for the full year)
o FY2013, the average sales price was USD1,900/ct at
5mm bcos.
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4. ROCKWELL RESOURCES RSA (PTY) LTD Technical Statement
(as at 28 February, 2013) NI 43-101
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MINING AREA TERRACE COMPLEX BOTTOM CUT-OFF VOLUME (m³) GRADE (ct/100m³) VALUE (USD/ct)
INDICATED RESOURCES
Saxendrift
Brakfontein Hill (“BHC”)
B1 terrace
5mm 7,135,000 0.40 2,400
Saxendrift
Hill
#
Saxendrift Hill (“SHC”)
B2 terrace
2mm 1,774,600 1.15 2,300
Saxendrift
Extension
Saxendrift River (“SRC”)
C3 terrace
5mm 1,303,400 0.60 1,884
INFERRED RESOURCES
Saxendrift
Brakfontein Hill (“BHC”)
B1 terrace
5mm 492,000 0.40 2,400
Saxendrift
Hill
Saxendrift Hill (“SHC”)
B2 terrace
2mm
5mm
86,000
0.68
0.52
2,300
2,400
Saxendrift
Extension
Saxendrift River (“SRC”)
C3 terrace
5mm 577,000 0.60 1,884
Kwartelspan Kwartelspan Complex (“KPC”)
2mm
5mm
500,000
1.00
0.76
2,300
2,400
# These samples were originally processed at 2mm bottom cut-off.
Diamond values for BHC, SHC and KPC are based on a two-year moving average (from + 10,000ct from BHC).
Diamond values for SRC are based on the sales data for FY2013 only.
NOTE: the Indicated Mineral Resources are inclusive of those Mineral Resources modified to produce the Mineral Reserves.
• On SRC, the average FY2013 sales price was USD1,884/ct
at 5mm bcos. Since no two-year moving average is
available, this figure will be used in the resource statement
below. However, as the volume of stones sold increases, it
is expected that the average sales value of SRC will
approximate that of BHC.
• The change in the Indicated Resources on the BHC is due
to depletion by mining during FY2013
• In addition to the Mineral Resources, limited exploration
has identified Exploration Targets of some 10-12Mm3
of
gravel
On the basis of the trial-mining on BHC and, subsequent,
production mining, the following Probable Reserves were
estimated for the Saxendrift Mine. Only Indicated Resources
located on BHC, which have been the subject of a trial-mining
programme and pre-feasibility study, have been converted to
probable reserves.
• The gravel volumes used in this study are Run of Mine
(ROM). Since the entire profile is mined and processed, no
dilution factors are applied.
• Since the average diamond recovery values (both grade
and quality) are based on actual, operational production
and sales values, no additional modifying factors need to
be added to discount diamond recovery.
• The average value used is that received from sales for
diamonds over the past 12 months.
• Bottom cut-off is 5mm.
• The change in Mineral Reserves is the result of depletion
due to mining.
The current mine plan involves continuous mining (24hr
operations) on BHC. The preferred method of mining the
alluvial gravels on Saxendrift mine is by means of strip-mining
in a shallow, opencast operation. The processing plant is
comprised of four scrubbers followed by four 18 ft rotary pan-
plants and has a budgeted plant-throughput of 677tph. With
an expected monthly throughput of 160,000m3
some 640ct of
diamonds are expected to be recovered through a bank of
twelve FLOWSORT machines, as well as final hand-sort in a
glove-box under secure conditions. Access to all areas of the
final recovery is controlled and monitored by protection
personnel and CCTV. Quality assurance/quality control is
maintained through the use of tracers, pan density tests, pan
crash tests and particle size distribution tests which are carried
out regularly by geological department personnel.
However, for six months of the 2014FY, the main plant (on
BHC) will be used for trial-mining of the SRC gravels (March-
May 2013 and September-November 2013, BHC gravels will be
processed and June-August 2013 and December 2013-February
2014, SRC gravels will be processed).
During FY2013, pre-feasibility studies were initiated on both
the Saxendrift Hill and Saxendrift River Complexes. Results to
date are insufficient to convert the Indicated Resources to
Probable Reserves with the required confidence. These studies
are on-going and will be reported on in forthcoming technical
reports.
During FY2014, Rockwell will continue to mine gravels from
BHC. In addition, further drilling and trial mining of SHC and
SRC gravels will proceed.
Mining costs on BHC run to some ZAR8-9M/month. Total
exploration drilling costs have been budgeted at ZAR2.5M for
the 2014 programme that will involve exploration drilling on
SRC and infill-drilling ahead of the BCH mining face.
Diamonds are sold on the open market, either through the
Flawless diamond Trading House or through Steinmetz
Diamond Group who add value by polishing selected stones
and paying Rockwell a percentage of the added value.
VOLUME
(m³)
GRADE*
(ct/100m³)
CARATS
Value
(USD/ct)
6,921,600 0.40 27,700 2,400
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