SIX COMPELLING REASONS TO INVEST · 2016-04-24 · De Beers and 4 years as Managing Director of...

A UNIQUE INVESTMENT PROPOSITION:

SIX COMPELLING REASONS TO INVEST

SEPTEMBER 2012

FOCUS ON DIAMOND VALUE MANAGEMENT

HISTORY IN THE MAKING

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• STEINMETZ FOREVERMARK JUBILEE PINK

• Saxendrift diamond selected for display at the

TOWER OF LONDON as part of Queen’s Diamond Jubilee

• The cushion cut, pink-brown diamond weighing 35.60

carats, was cut from a 179.60 carat rough diamond that was

sold into the Company’s BENEFICIATION joint venture with

Steinmetz Diamond Group (“SDG”)


AGENDA

• OUR UNIQUE INVESTMENT PROPOSITION

1. PEOPLE

2. PRODUCT

3. PROPERTIES

4. PRODUCTION

5. PARTNERSHIPS

6. PROSPECTS

• CONCLUSION

3

70 carat diamond recovered from Jasper

(August 2012), sold for USD18,000 per carat


1. PEOPLE:

LEADERSHIP TEAM WITH EXCELLENT CREDENTIALS

4

Board of Directors:

Dr Mark Bristow (Chairman)

Richard Linnell

Willem Jacobs

Johan van’t Hof

Stephen Dietrich

A leading international diamantaire and

specialist in valuation, marketing and

sales of rough diamond production from

alluvial deposits.

Diamond Marketing & Sales Manager

Jeffrey Brenner

Geological, mineral resource

management and production

experience in alluvial diamond deposits,

diamond and coal exploration. Qualified

person and Pr.Sci.Nat.

Group Mineral

Resource Manager

Glenn Norton, BSc (Hons)

Seasoned diamond executive with

career spanning over 20 years at

De Beers and 4 years as Managing

Director of African Diamonds plc.

FIMMM, C.Eng, C.Sci and Pr.Sci.Nat.

President and CEO

James Campbell, BSc (Hons ) ARSM,

MBA (Dunelm)

>12 yrs in investor relations and

corporate development. Worked as a

sell side analyst and in-house IRO

across various industry sectors.

Corporate Development

Stéphanie Leclercq BSc, CFA

Mining and corporate experience with

junior and senior mining companies with

operations in SA, Australia and Canada.

Knowledge of public listed mining

Companies.

CFO

Gerhard Jacobs, BAcc, MBA

Group HR/IR Manager

Richard Mhlonto, Nat Dip (HR Management

& Development)

Extensive HR & Industrial Relations

management experience including

organizational and structural design

initiatives as well as strategy

development and implementation.

>30 yrs in diamonds incl. mgt. roles at

Orapa (world’s largest diamond mine) &

The Oaks (De Beers’ smallest mine).

Operations Manager at Pangea

DiamondFields plc from 2007.

COO

Michael Hunt, MSc (Advanced Chemical

Engineering)


2. PRODUCT:

ROCKWELL ROUGH DIAMOND PRODUCTION: AVERAGE US$/CARAT

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$90/carat <0.3 c/stone #

$1,100 /carat ~1.2 c/stone #

$2,000/carat ~2.5 c/stone #

World Diamond Average

$700/carat ~0.9 c/stone #

Tirisano (North West Province, RSA)

Klipdam (Vaal River, RSA)

Saxendrift* /Wouterspan/Niewejaarskraal (Middle Orange River, RSA)

Small diamonds used in lower

price point and pavé jewellery

Engagement rings (Bridal-range),

mid to high price point jewellery

Engagement rings, high price point

jewellery

High-end luxury jewellery

High Net Worth Individuals

Investment Stones

# Rough stone average sizes * Before increasing the bottom cut off to 5mm


3. PROPERTIES:

ROCKWELL OPERATIONS AND PROJECT LOCALITIES:

NORTHERN CAPE AND NORTH WEST PROVINCES, SOUTH AFRICA

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4. PRODUCTION:

CURRENT OPERATIONS

OPERATION PROCESSING CAPACITY

(M3/Month)

CARATS PER

MONTH

CARAT VALUE

(US$)

LIFE OF MINE

(YEARS)

MIDDLE ORANGE RIVER:

SAXENDRIFT + SAXENDRIFT

HILL EXTENSION*

Saxendrift:150,000

Saxendrift Hill: 100,000

Saxendrift: 750

Saxendrift Hill: 650 2,200

Saxendrift: 3

Saxendrift Hill: 4

VAAL RIVER:

HOLPAN** AND KLIPDAM Klipdam: 90,000 Klipdam: 800 Klipdam: 850 Klipdam: 2

VENTERSDORP:

TIRISANO 50,000 700 700 18+

* Saxendrift Hill Extension planned to be commissioned in second half of fiscal 2013

** On care and maintenance since May 2011

TIRISANO SAXENDRIFT KLIPDAM

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SAX HILL CONCEPT


5. PARTNERSHIPS

BENEFICIATION JOINT VENTURE: SIGNIFICANT VALUE ADD

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ROUGH POLISHED BENEFICIATION

VALUE ADD

105 ct Type II A,

Middle Orange

35 ct D color internally

flawless

Sold for $230,000/ct

+62% on initial rough

sale price

212 ct yellow,

Middle Orange

102 ct vivid yellow

+50% on initial rough

sale price

128 ct yellow,

Middle Orange

81 ct vivid yellow

Currently being

marketed at Singapore

F1 Grand Prix

Steinmetz Diamond Group (SDG) profit share agreement (>2.8 carat stones)

• MARKET RELATED PRICES for diamonds sold into JV + 50% profit share

• ±25% of revenue from BENEFICIATION, expected to INCREASE

• Realized revenue of $16.3M for F2009 to F2012


6. PROSPECTS:

GROWTH PLAN TO CREATE CRITICAL MASS AND SCALE

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Projected production based on mine plans in November 2010 preliminary assessments (Tirisano, Wouterspan and

Niewejaarskraal) and prefeasibility study (Saxendrift). Refer to Saxendrift resource statement on www.rockwelldiamonds.com

* Based on budgeted carat values for 2013 and 2.5% annual price increases

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

-

20,000

40,000

60,000

80,000

100,000

120,000

F2012A F2013 F2014 F2015 F2016 F2017 F2018

Vo

lum

e / m

on

th (

m3 )

Tota

l car

ats

/ yea

r

Production targets

Niewejaarskraal Wouterspan Tirisano Klipdam Jasper Saxendrift Extension Saxendrift Total Production / month

0

50

100

150

200

250

300

F2012A F2013 F2014 F2015 F2016 F2017 F2018

Rev

enu

e / y

ear

($m

)

Revenue targets *

Other Niewejaarskraal Wouterspan Tirisano Klipdam Jasper Saxendrift Extension Saxendrift


6. PROSPECTS:

STRONG FUNDAMENTALS FOR DIAMOND SECTOR

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• Diamond DEMAND in carats forecast to grow at 6% p.a. to 2020

– OUTPACING annual SUPPLY growth of 2.8%

– CHINESE and INDIAN MIDDLE CLASS to double by 2020

• ECONOMIC UNCERTAINTY currently impacting sentiment in

diamond market

• Growing SCARCITY of +2 CARAT diamonds

– Rockwell: Comprises >80% of PRODUCTION

– Globally: Represents 5% of diamond PRODUCTION and 50% of

sales VALUE for producers

ROCKWELL PRICING against current market

• SMALLER STONES: Reduction of ±20%

• >2 CARATS : Stable pricing

• LARGE SPECIALS: Strong demand


CONCLUSION:

DELIVERY ON DIAMOND VALUE MANAGEMENT OBJECTIVES

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OBJECTIVE PROGRESS

OPTIMIZE PRODUCTION MINES to

improve returns: Drive down costs

and enhance metallurgical processes

IN-FIELD SCREEN at Saxendrift

WET FRONT END at Tirisano

Optimise KLIPDAM MINE PLAN

Four new CONTRACT MINING deals: Three starting in Q3 F2012 (combined processing of

150,000 m3/m)

LEVERAGING PRODUCTION

PROFILE: Further develop assets

with minimum dilution of existing

shareholders

Commissioned TIRISANO: Decisive RIGHT SIZING due to weaker low-end diamond prices

Proceeds from sale of non-core assets: Invested to INCREASE PRODUCTION

BLUEPRINT for future mines: Proof of concept BULK X-RAY at Saxendrift

Developing SAXENDRIFT HILL EXTENSION: Maximize economic value of overall Saxendrift Mine

property

ADDING VALUE DOWNSTREAM:

Strategic beneficiation partnerships $7.8M additional revenue in fiscal 2012

GROWTH THROUGH ACQUISITION:

Increase production and revenue

Acquisition of JASPER Mine

Ongoing REVIEW of other M&A opportunities

Re-organisation of BEE INVESTMENT

ONGOING GEOLOGICAL

INVESTIGATIONS: New project areas

adjacent to existing operations

RESOURCE DEVELOPMENT on existing mining areas: Improve geological understanding and

increase resources

Increased SAXENDRIFT RESERVES

11M m3 additional resources added to KLIPDAM


CONCLUSION:

INVEST AT DEEP DISCOUNT – PARTICIPATE IN TURNAROUND

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• Closing RDI share price at 27 August 2012: C$0.28

• Enterprise Value (@ end of Q1 F2013): Market cap less Loans from related parties and

capital lease obligation less Deferred tax and reclamation plus cash (Excludes receivable

from BEE partner of C$6.9m)

$m

0

10

20

30

40

50

60

70

80

90

Market Capitalization Enterprise value Tangible net asset value (NAV - Mineral property interests)

Net asset value

ANY QUESTIONS ?

SEPTEMBER 2012


FORWARD LOOKING STATEMENTS Except for statements of historical fact, this presentation release contains certain "forward-looking information" within the meaning of applicable securities law. Forward-

looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or

statements that certain events or conditions "may" or "will" occur. Although the Company believes the expectations expressed in such forward-looking statements are

based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the

forward-looking statements.

Factors that could cause actual results to differ materially from those in forward-looking statements include uncertainties and costs related to 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 our mineral

resource estimates and our 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 and 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 that we use to report our 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 in countries in which we operate; and labour strikes, work stoppages, or other interruptions to, or difficulties in, the employment of labour in markets in which we

operate our mines, or environmental hazards, industrial accidents or other events or occurrences, including third party interference that interrupt operation of our mines or

development projects.

For further information on Rockwell, Investors should review Rockwell's annual Form 20-F filing with the United States Securities and Exchange Commission

www.sec.com and the Company's home jurisdiction filings that are available at www.sedar.com.

This presentation also uses the terms 'indicated resources' and 'inferred resources'. Rockwell Diamonds Inc. advises investors that although these terms are recognized

and required by Canadian regulations (under National Instrument 43-101 Standards of Disclosure for Mineral Projects), the U.S. Securities and Exchange Commission

does not recognize them. Investors are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted into reserves. In

addition, 'inferred resources' have a great amount of uncertainty as to their existence, and economic and legal feasibility. It cannot be assumed that all or any part of an

Inferred Mineral Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility

or pre-feasibility studies, or economic studies except for Preliminary Assessment as defined under 43-101. Investors are cautioned not to assume that part or all of an

inferred resource exists, or is economically or legally mineable.

The securities of Rockwell being offered have not been, nor will be, registered under the U.S. Securities Act and may not be offered or sold within the United States or to,

or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from U.S. registration requirements. This information does not constitute

an offer or sale of securities in the United States. Prior to making any investment decision, investors should consult a professional advisor.

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http://www.sec.com/

http://www.sedar.com/

SIX COMPELLING REASONS TO INVEST · 2016-04-24 · De Beers and 4 years as Managing Director of...

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