Rockwell reports Q2 2018 results, excludes breakeven-but-bankrupt South African affiliates
Rockwell Diamonds' Niewejaarskraal operation in better days
Photo by Rockwell Diamonds
VANCOUVER (miningweekly.com) – Canadian alluvial diamond miner Rockwell Diamonds, which had its origins within Vancouver-based mining house Hunter Dickenson, has reported a noncash comprehensive income of C$23.2-million for the second quarter ended August 31.
The result is based almost entirely on the reversal of foreign currency reserves regarding operations in South Africa, and certain stock-based compensation reserves that were unwound. However, it excluded the company’s three South Africa-based subsidiaries Rockwell Resources, HC van Wyk Diamonds and Saxendrift Mine, over which the company no longer has control.
An application to have Rockwell’s three subsidiaries placed under South African business rescue, as opposed to liquidation, was granted in May by the court in Kimberley.
Erstwhile mining contractor C-Rock Mining had previously applied to have the three subsidiaries placed in interim liquidation, at a time when Rockwell was executing a turnaround strategy.
However, willing buyer Ascot Diamonds has stepped forward with two proposed rescue transactions – one for the distressed affiliates in South Africa and another for the group’s two subsidiaries in Cayman Islands. But the deals have been thwarted by the court-appointed business rescue practitioners (BRPs) Metis Strategy Advisors, which filed an untimely motion to place the affiliates into provisional liquidation, placing pressure on negotiations, resulting in the deal falling through.
Surprisingly, Rockwell reported that despite the fact that only 25% of the planned volumes were actually processed and, including the additional burden of the BRPs and their legal adviser’s fees, operations were on cash breakeven in August.
The three subsidiaries were again placed in provisional liquidation on September 22 by the BRPs and their legal counsel Werksmans, in spite of receiving the formal offer from Ascot Diamonds.
The return date for hearing on the liquidation order is November 3, by which date the provisional liquidators, Honey's of Bloemfontein, will ask the Kimberley High Court either to proceed with full liquidation or to keep the subsidiaries in provisional liquidation pending the successful outcome of the transaction with Ascot Diamonds.
Ascot's offer to also buy Rockwell's Cayman companies is conditional on a successful buyout of the three South African subsidiaries. To the extent that the second offer does proceed, Rockwell will approach creditors and shareholders for approval.
Rockwell separately reported that while the Wouterspan mine was operational under management of the BRPs, it produced a total of 408 ct, reflecting a significantly improved grade of 0.72 carats per hundred cubic metres, with the average price per carat soaring 200% in August to $2 685/ct, compared with $899/ct in July.
Revenues from diamond sales in the period totalled $1.25-million.
Comments
Press Office
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation