Rockwell Diamonds Inc. recently reported a huge decline in revenues for the quarter ended November 30, 2016 (Q3 FY2017). Rough diamond sales revenue of C$ 2.4 million for the period was 65% lower than the revenue of C$ 6.9 million garnered in Q3 F 2016; and reflects a 77% decrease over the previous quarter. The Company’s total revenues of C$ 7.1 million for Q3 F 2017 showed a decline of 51% when compared to total revenue of C$ 7.1 million achieved in the same period of the previous year.

Rockwell recorded a gross loss of C$ 3.4 million for the quarter; its net loss stood at C$ 5.5 million, compared to a net loss of C$ 10.5 million for Q3 FY 2016.

The Company explained that the decrease in rough diamond sales was “due to substantially curtailed diamond production following the suspension of operations”.  It has also been mired in litigation with a former contractor at the Wouterspan project.

“Rockwell completed a challenging quarter which commenced with a review of the practices, strategy and business plans and ended with new financing to complete WPC (Wouterspan), whilst having to attend to a series of unfounded and malicious legal attacks from its erstwhile mining and construction contractor,” commented Tjaart Willemse, Chief Executive Officer. “On restarting the operations, production ramp-up has been slower than anticipated, mostly as a result of unexpected challenges with earthmoving equipment after it was found to have been tampered with during the period following the interim spoliation ruling in favour of the contractor. Not all challenges have been overcome yet but this is receiving due attention.”

The Company has entered into an agreement to dispose of its non-core Remhoogte/Holsloot and Saxendrift mines for “a reasonable cash consideration and added benefit of reducing its outstanding rehabilitation liabilities by more than 80%”.

Further, the Company reported that on November 20, 2016, its  Board passed a special resolution approving additional funding of US$ 8 million to finance the completion of the business repositioning plan aimed at bringing the Company back into profitability. And finally, Rockwell announced that it has put new leadership into place.   

“The Company was taken back from being effectively operated by third parties and is now managed by its management – the way it should be,” Willemse said.