South Africa – Rockwell Diamonds on Monday announced that it has divested its non-core Tirisano project for a cash consideration of R60-million.
Tirisano, located in the North West province about 500 km from the company’s Middle Orange River (MOR) operations, was identified some time ago as a non-core asset and a sale process was initiated.
Tirisano was placed on care and maintenance in December 2012 and subsequently royalty contract miners were brought in to continue mining operations on the property. During the subsequent period the contract mining operations processed an average of 160 000 m3 per month producing between 1 500 and 2 000 carats per month.
Rockwell Diamonds’ 12.5% royalty on the sale of the diamonds was applied to the care and maintenance costs of the property and a portion of the overheads.
After evaluating a number of proposals as part of the sale process, the company reached an agreement with a consortium made up of the royalty miners, who have operated at Tirisano for the past two years.
The consortium will acquire the entire issued share capital, together with claims on loan account in Rockwell Diamonds’ 100% owned subsidiary, Etruscan Diamonds, including the Tirisano mining right and its associated infrastructure, for a cash consideration of R60-million. The Consortium will therefore assume debt owed by Etruscan amounting to R34 million and the related environmental liabilities.
The cash consideration will be settled by way of two initial payments totaling R20-million, one this month (March 2015) and the second in April 2015, followed by 20 equal monthly instalments of R2-million.
The proceeds will be used to fund Rockwell’s general working capital and investments related to acquisitions, additional exploration and ongoing development of the portfolio of mining and mineral rights.
The transaction is subject to conditions precedent, including customary regulatory approvals.
Meanwhile, Rockwell Diamonds is expanding its exploration activities in the MOR, initially focusing on the Lanyonvale and contiguous Wouterspan properties, both which are considered to have significant potential to add to the company’s resources.
Commenting on the Tirisano disposal Rockwell Diamonds CEO and president James Campbell says: “The sale of Tirisano, which has been identified as non-core for some time, will allow us to focus entirely on our growth objectives in the MOR and our intention of exceeding our 500 000m3 per month processing target.”
He further says that Rockwell Diamonds is progressing with its exploration programme to increase its resources and mining flexibility. “We intend developing 3 to 4-million m3 of Rooikoppie exploration targets at Lanyonvale and will be carrying out further pitting of the Rooikoppie gravels at Wouterspan with the goal of growing Rockwell’s profitable operational base for the future.”