Rockwell recovers four large diamonds, shares soar

Rockwell Diamonds (TSX: RDI; JSE: RDI) continued to climb after the company found four diamonds weighing more than 100 carats from its Middle Orange River projects in South Africa’s Northern Cape province over the past three weeks.

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Rockwell Diamonds (TSX: RDI; JSE: RDI) continued to climb after the company found four diamonds weighing more than 100 carats from its Middle Orange River projects in South Africa’s Northern Cape province over the past three weeks.

After announcing the discoveries on Sept. 17, Rockwell jumped 45% to close at 42¢. It added another 15% a day later to end at 48.5¢.

Of the four, Rockwell unearthed two stones weighing 126 ct and 169 ct from a new mining area at its Saxendrift Hill complex. The other two — a 116 ct stone and a 138 ct stone — were recovered from gravels at the new Saxendrift extension pit.

Adding to the good news, the Vancouver-based producer said it retrieved more than the usual number of smaller diamonds, supporting its strategy to refocus on the Middle Orange River operations and use new processing technology to increase production. The recently commissioned Saxendrift processing plant uses x-ray technology in both the concentration and recovery area, the company says.

Commenting on the large stones, London-based analyst Ryan Long at Northland Capital Partners writes: “Prior to this, the company would normally only recover a stone of this sort of size once or perhaps twice every year so to have recovered four in just three weeks is an excellent result.”

Rockwell’s ability to retrieve stones weighing between 20 and 100 ct has increased with the commissioning of the Saxendrift Hill complex and the Niewejaarskraal project along with the inclusion of the Saxendrift extension into Saxendrift’s mine plan, the company explains.

This also indicates the success Rockwell is having with the recently installed bulk x-ray sorters at its Middle Orange River projects, Long says. “As a result of these exciting developments, we would expect to see a positive impact on the average price per carat and revenue for the rest of the financial year.”

This is exactly what Rockwell is hoping for as it continues to grow production from the region to 500,000 m3 a month to improve quarterly earnings.

All the stones exceeding 2.8 ct would be sold into the beneficiation joint venture with the Steinmetz Diamond Group at market value, after which Rockwell would participate equally in the profits of the polished diamonds.

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