HomeDiamonds & GemstonesRockwell Diamonds to conclude Remhoogte/Holsloot acquisition

Rockwell Diamonds to conclude Remhoogte/Holsloot acquisition

TSX and JSE-listed Rockwell Diamonds on Wednesday announced that it expects to close the transaction and assume ownership and operational control of the Remhoogte/Holsloot operations and associated assets by no later than June 1, 2015.

The Remhoogte/Holsloot operations are contiguous to Rockwell’s existing properties and will significantly enlarge its resource base in the Middle Orange River (MOR) region.

Rockwell said in a statement that all conditions precedent, including evidence of sufficient financing to complete the acquisition of the Remhoogte/Holsloot project, and its associated plant and equipment in MOR have been met and the transaction is on track for financial completion by end May 2015.

Financing has also been secured through the granting of a bridging loan by key shareholders, being Diacore and Rockwell’s chairperson Mark Bristow. The total loan amounts to US$16 million plus R16 million , of which $15 million and R16 million has been committed by Diacore and the remaining US$1 million by Mark Bristow; together with a further US$0.5 million as a working capital reserve for transaction costs associated with the acquisition.

Agreements have been signed to meet the new purchase consideration – which has been restructured and reduced from R284 million to R214.95 million through exclusion of certain earthmoving equipment from the assets being acquired.

Furthermore, The acquisition of the Bo-Karoo property has been deferred pending regulatory approval for its transfer by the Department of Mineral Resources, while the revised sale agreement includes the sale by Rockwell of the Saxendrift Extension property (acquired in March 2013) to the sellers for R5 million as part of the transaction consideration.

Rockwell Diamonds aims to expand exploration at its Middle Orange River project
Rockwell Diamonds aims to expand exploration at its Middle Orange River project

The revised transaction comprises R120 million  in respect of the mineral rights, three operational processing plants, and a further R94.95 million in respect of required earthmoving fleet and other equipment.

Required regulatory approvals all granted, including South African Competition Commission consent and Section 11 authorization from Department of Mineral Resources to transfer the Remhoogte mineral rights to Rockwell.

Commenting on the acquisition Rockwell CEO and president James Campbell said: “We are delighted to announce that we are now able and intend to meet the final conditions in our transaction with Bondeo 140 cc on its Remhoogte/Holsloot operations, which have continued to yield high value diamonds since the announcement of the transaction in January.

“[We plan] to offer our shareholders and other investors the opportunity to refinance the bridging debt in the second quarter, through the equity market.

“Meanwhile, we continue with our exploration work at Wouterspan and Lanyonvale, to fully understand the potential of these properties while at Niewejaarskraal we are pressing on with our geological studies. We remain committed to our medium term target of processing 500 000 m3 per month of quality gravels in the MOR, with the early life Remhoogte/Holsloot project spearheading a new era for Rockwell.”

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Chantelle Kotze
Chantelle Kotze is a Johannesburg-based media professional. She is a contributor at Mining Review Africa (Clarion Events - Africa) and has created content for the media brand over the past 6 years.