TORONTO, Jan. 15, 2018
/CNW/ - Rockwell Diamonds Inc. ("Rockwell" or the "Company") (NEX:
RDI.H; JSE: RDI) today filed its third quarter 2018 results, and
provided a further update as to the developments with respect to
its three subsidiaries in South
Africa. These subsidiaries are Rockwell Resources RSA (Pty)
Ltd (Rockwell RSA), HC van Wyk Diamonds Ltd (HC van Wyk) and
Saxendrift Mine (Pty) Ltd (Saxendrift). Material elements
include:
- The financial results presented included the financial
statements of the Company and its two subsidiaries in Cayman Islands, but did not consolidate the
three subsidiaries in South
Africa. The Company no longer has control over the three
subsidiaries sufficient to consolidate under IFRS.
- The financial results show a nine-month comprehensive income
(but non cash) of $22.6M which
results almost entirely from the reversal of foreign currency
reserves in respect of the operations in South Africa, and certain stock based
compensation reserves, that were unwound upon deconsolidation.
- There were no mining or processing operations as the Business
Rescue Practitioners (BRPs) successfully applied to place the three
subsidiaries back into provisional liquidation on September 6, 2017 and placed the Wouterspan plant
on care and maintenance.
- The three subsidiaries were again placed in provisional
liquidation on September 22, 2017 by
the BRPs, Metis Strategic Advisors Pty and their legal counsel
Werksmans of Johannesburg,
notwithstanding the fact that an offer had been received from Ascot
Diamonds, an affiliate company of Diacore with a proven purchasing
capability, to buy the three subsidiaries on a going concern basis
at a value in excess of liquidation value, and notwithstanding that
the operations were break-even for August
2017. As a result, all claims are stayed against the three
subsidiaries.
- As a result, on the return date November
3, 2017 for hearing on the liquidation order, the High Court
in Kimberley ordered the date to
be reset to March 16, 2018 to allow a
full opportunity to achieve a sale transaction and therefore a
higher recovery value for creditors.
- The MD&A for the period September to November 2017 reflects a detailed account of the
actions of the BRPs and the Company's attempt to undertake this
sale transaction to Ascot Diamonds.
- The provisional liquidators (PLs) appointed are Honey Attorneys
of Bloemfontein, who formally took over from the BRPs on
October 11, 2017.
- The buyer and their Attorneys met with the PLs several times,
and now are making a detailed proposal by creditor in a
comprehensive compromise proposal to the PLs.
- That purchase offer for the three subsidiaries therefore
remains valid, and the PLs are in active discussion with Diacore to
advance such a proposal.
- The buyer has reaffirmed its additional offer to the Company in
a separate transaction to buy the three intermediate Cayman
entities from the Company, although such offer is conditional on an
initial successful transaction in South
Africa with regards to the three South African subsidiaries.
To the extent that such second offer does proceed, the Company will
approach creditors and shareholders in the Company for
approval.
About Rockwell Diamonds
Rockwell has been engaged in
the business of operating and developing alluvial diamond
deposits.
As at the date of this document, Rockwell's subsidiary in
South Africa (Rockwell Resources
RSA Pty Limited) and its two subsidiaries (HC van Wyk Diamonds
Limited and Saxendrift Mine Pty Limited) had again been placed in
provisional liquidation, following an application by the Business
Rescue Practitioners on September 7,
2017. The application was heard on September 22, 2017 and so ordered by the Court.
Liquidators were appointed on September 27,
2017. The return date for hearing on the liquidation order
is now March 16, 2018.
Rockwell's common shares trade on NEX under the symbol "RDI.H"
and on the JSE Ltd under the symbol "RDI". Trading of Rockwell's
shares remains suspended at the request of the Company.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
No regulatory authority has approved or disapproved the
information contained in this news release.
Forward Looking Statements
Except for statements of historical fact, this news 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 the transaction and the ability of each party to
satisfy the conditions precedent in a timely manner or at all,
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 of 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 as 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 home jurisdiction filings that are available at
www.sedar.com.
SOURCE Rockwell Diamonds Inc.
