Rockwell's Board Approves Plan to Reduce Klipdam Mine's Operating Cost Structure and Improve Performance

Rockwell's Board Approves Plan to Reduce Klipdam Mine's Operating Cost Structure and Improve Performance PR Newswire VANCOUVER, British Columbia, October 31, 2012 VANCOUVER, British Columbia, October 31, 2012 /PRNewswire/ -- Rockwell Diamonds Inc. ("Rockwell" or the "Company") (TSX: RDI; JSE: RDI;) announces a restructuring of the Klipdam Mine operations aimed at reducing the operating costs and improving its overall performance. While the remaining mine life of Klipdam Mine is three years (in terms of currently defined resources) and the mine has a long and profitable history of operations, over the past two years its financial performance has been negatively impacted by high unit costs, as well as poor earthmoving and plant availabilities. A number of management interventions have taken place, including the appointment of several mine managers and changing the mine plan to incorporate extraction of more palaeochannel gravels as well as various changes to the processing plant. Although Klipdam has recently produced sporadic monthly positive cash flows, its cumulative loss making performance has persisted, impacting on the overall performance of the Company. Management has over the last year actively evaluated a number of alternatives to maximize the economic value of this asset, culminating in a multi-faceted rightsizing proposal that has been approved by the board of directors.