TSX and JSE listed mid-tier diamond producer Rockwell Diamonds has announced that it has, consequent upon the Old Order Mining Rights held by Jasper having been converted into New Order Mining Rights, completed its acquisition of Africa Vanguard Resources’ (AVRs) Jasper mine in the Northern Cape by settling the purchase consideration through the issue of shares.The agreement to acquire the Jasper mine project, which is contiguous to Rockwell’s Saxendrift mine, formed part of the transaction to unbundle the companys Black Economic Empowerment (BEE) partnership with AVR. The Middle Orange River region, which is known for its large and high-valued gem-quality diamonds, is a key area of focus for Rockwell Diamonds, with the company targeting a processing capacity of 500 000 cubic metres per month of quality gravels. The Jasper mine project is an important component of this strategy as it provides the potential to extend the mine life of the contiguous Saxendrift mine, explained Rockwell Diamonds CEO, James Campbell. Jasper increases our options within the Saxendrift complex to grow our production profile and deliver on our forecast recoveries, he added. Rockwell’s application for the New Order Mining Right at Jasper was recently approved, triggering the payment by the company of R2 million in Rockwell Diamond’s shares listed on the JSE to the Jasper shareholders.
The company said that a total of 533 332 shares were issued at R3.75 per share, which represents the five-day volume weighted moving average price at the time that the agreements were signed in March 2012. The Jasper shareholders have undertaken not to trade these shares for a period of one year.Further, the restructured agreement included a payment to AVR by Rockwell Diamonds of R15 million in the form of shares listed on the JSE, which included the settlement as well as purchase consideration for AVRs Jasper mine, while AVR paid an amount of R22.5 million to Rockwell Diamonds. According to Rockwell Diamonds, a new black economic empowerment partner that shares the companys vision and is committed to adding value to Rockwell Diamonds has been identified. The company noted that progress has been made in terms of securing external funding to cover purchase consideration by the new BEE shareholder in order to finalise the unbundling of the transaction with AVR.
Rockwell Diamonds said that it has outlined the way forward for the newly acquired property, with geological studies to estimate the resources at the Jasper mine having reached an advanced stage. The company also revealed that it is on track to release a NI 43-101 compliant technical statement before the end of May 2013, with initial assessments of the alluvial Jasper deposit suggesting that its production profile may be similar to Saxendrift in terms of quality, size and value. It also pointed out that by processing materials mined from Jasper at the company’s Saxendrift mine, there was the potential to extend the life of the Saxendrift operation with limited new investment. The company is also reviewing the possible construction of an infield screen at Jasper with projected efficiency benefits for the overall operating cost structure of the mine.