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Rockwell Diamonds has entered into an acquisition agreement and an amalgamation agreement with 1274787 B.C (Bristco).

Bristco is a corporation existing under the laws of British Columbia and wholly-owned by Mark Bristow, a director of the Company, pursuant to which all of the outstanding common shares of Rockwell, other than those Common Shares held by Bristow and any dissenting shareholders, will be exchanged for redeemable preferred shares of the amalgamated corporation resulting from the amalgamation of Rockwell and Bristco (Amalco) at a price of CAD$0.005 per Common Share.

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It is intended that the Transaction will be affected by way of an amalgamation of Rockwell and Bristco under the provisions of the Business Corporations Act.

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Pursuant to the Amalgamation, all of the issued and outstanding Common Shares, other than those already held by Bristow and any dissenting shareholders, will be exchanged, on a one-for-one basis, for Redeemable Preferred Shares of Amalco.

The Redeemable Preferred Shares will then be immediately redeemed by Amalco in exchange for CAD$0.005 per Redeemable Preferred Share payable in cash.

Rockwell has called an annual and special meeting of shareholders to be held on March 2, 2021 to, amongst other things, seek shareholder approval for the Amalgamation.

The Amalgamation must be approved by the affirmative vote of (i) 66⅔% of the votes cast by holders of Common Shares represented at the Meeting and (ii) a simple majority of the votes cast by holders of Common Shares at the Meeting (excluding shareholders whose votes are required to be excluded, including Bristow, pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions.

Completion of the Transaction is subject to regulatory approvals and other customary conditions and is expected to close in early March 2021, subject to satisfaction of all conditions to closing set out in the Acquisition Agreement.

Upon completion of the Transaction, it is expected that Amalco would be delisted from the JSE and will apply to cease to be a reporting issuer under applicable securities laws in Canada.