As announced in December 2016, junior miner Rockwell Diamonds signed an agreement to sell “none-core assets” – the Remhoogte and Saxendrift mines – to Nelesco Proprietary 318 for US$3.48 million (ZAR45m); it has now been completed.
The sale and purchase agreement also releases Rockwell from environmental and tax liabilities (rehabilitation liabilities) totalling US$5.40 million (R70m) as well as the transfer of 100 employees.
The first (US$1.53m) of three payments has been completed after the fulfillment of certain conditions, the second being the transfer of registration of the Saxendrift farm in the name of Nelesco, which is soon to be completed. The cash balance, the transfer of the Section 11 mineral properties, as well as the consent of the Takeover Regulation Panel of South Africa are to be the final payment.
Until then, all operations will be on a contract mining basis with a royalty payable to the Rockwell of 2.5% of revenue from diamonds recovered from properties covered by the transaction.Nelesco has in the meanwhile completed site establishment and commenced its mining operations.
At the time of the initial announcement of the sale in December, Tjaart Willemse, CEO of Rockwell Diamonds said, “This transaction represents a significant milestone in our repositioning plans for the ‘new Rockwell’. It not only brings in cash in addition to the recently announced funding by two of the key shareholders and a third party, but also disposes of non-core assets and associated liabilities.”
He now adds, “As regards our repositioning plan we are not in the home stretch yet, but we are on the move and gaining traction towards realizing the “new Rockwell” goals. Not only have we reduced our liabilities and earned some much needed cash, but we have recovered our operations and regained focus. We have a clear strategy, which is to get our Wouterspan Mine up to full production and to see first production from our new Stofdraai Mine by July.”