Rockwell Diamonds has provided an update as to the developments with respect to its three subsidiaries in South Africa which are currently in business rescue:
These subsidiaries are Rockwell Resources, HC van Wyk Diamonds and Saxendrift mine.
Rockwell Diamonds has had several discussions with three parties regarding a rescue transaction, resulting in a letter from counsel for one of the interested parties to Metis Strategic Advisors, the business rescue practitioners (BRPs), on September 13, 2017.
The letter informed the BRPs that an offer was to be expected, it was in excess of liquidation value, and they were invited to a meeting to finalise this.
The BRPs have been involved in such discussions for some weeks.
Notwithstanding this, the BRPs made a motion yesterday in the Kimberley High Court to place the three subsidiaries back in provisional liquidation and informed us today that they have started the process to place the Wouterspan mine on care and maintenance, a decision which will be reviewed should an acceptable transaction as described above be received.
The court date is set for Friday, 22 September 2017.
This application follows a month in August when operations under the BRPs’ direction at Rcokwell Diamonds’ Wouterspan mine were break-even before BRP costs, where grade was 0.77 cts per 100 cubic meters, prices achieved exceeded plan, but volumes remained below plan at 77,000 cubic meters.
Budget was for 175,000 cubic meters, and the operations had never reached plan under the BRPs’ three months of direction.
Rockwell Diamonds is unclear why the BRPs chose not to wait to file such motion based on the outcome of the final discussions regarding a proposed transaction, when written assurance had been provided that the offer would exceed liquidation value.
Rockwell Diamonds plans to continue the discussions and is advised that one BRP has agreed to attend while the other is not available for personal reasons.
Feature image credit: Rockwell Diamonds