The company stated that the funds form the sale will be used to bring the Niewejaarskraal Mine into production and also support its strategy of growing its operating footprint in the Middle Orange River region of South Africa.
With this deal, the funds from the sale of this asset will be about SAR48m ($5.3m), which also includes sale of the operation’s earthmoving equipment.
Meanwhile, according to the terms of the agreement, the private alluvial diamond buyer will pay the purchase amount in three tranches with SAR10m ($1.1m) paid during execution of agreement.
Remaining amount is expected to be paid in monthly installments of SAR1m ($110,425) each for 18 months. The final SAR5m ($552,123) will be paid following the approval from the Department of Minerals Resources.
In addition, Rockwell has retained certain items of plant and machinery that will be redeployed to Niewejaarskraal mine.
Rockwell Diamonds CEO James Campbell noted that based on current resources, Klipdam mine has two years of mine life remaining.
"We accepted the offer for this mine, as opposed to investing further resources to extend its projected mine life through additional exploration, because our analyses projected higher long-term returns from Rockwell’s Middle Orange River properties which have better grades and diamond values than Klipdam and yield high-value, gem-quality diamonds," elaborated Campbell.
The company has outlined capital budget of SAR20.1 ($2.2m) for Niewejaarskraal mine besides plans to increase its capacity to 200,000 m3.
"The Niewejaarskraal development is another important milestone towards delivering on our stated objective of growing monthly production volumes to 500,000 m3 from our existing inventory of properties in the Middle Orange River region.
"With three productive mines, namely Saxendrift, the Saxendrift Hill Complex which is in the production ramp-up phase, to be followed by Niewejaarskraal, we expect to reach three quarters of this target," explained Campbell.
