Rockwell Diamonds Agrees to $28.5 Million Deal to Expand Operations in South Africa
Mining company Rockwell Diamonds has agreed to acquire certain alluvial diamond properties and associated plant and equipment from Bondeo 140 CC for $28.5 million, assisting Rockwell in expanding its operations in South Africa.
"We are delighted to have concluded this agreement as it represents an exciting growth platform for Rockwell,” said CEO and President of Rockwell, James Campbell.
“Our executive and operational management have demonstrated their alluvial diamond production expertise during Rockwell's corporate turnaround and have the capacity to take on these additional assets.”
The massive deal is comprised of $12 million for the mineral rights and three processing plants, with the remaining $16.5 million allocated to earth-moving equipment fleet and other associated equipment.
"We have a long-standing working relationship with the sellers of the assets which we are acquiring, who initially brought this opportunity to the table and we have agreed to work together in order to find additional opportunities that might benefit both parties," Campbell said on Tuesday.
“We have reviewed a number of consolidation opportunities and the transaction met all our strategic criteria. Its assets are contiguous to our existing MOR operations, which are known for their gem quality diamonds.”
According to Campbell, the deal will help Rockwell significantly increase its operating and resource base and leverage its growth in the Middle Orange River region in South Africa.
“We know the geology of the area. So these new assets offer economies of scale, with the potential to reduce the volatility of our quarterly production results and take us above our target of processing 500,000m3 per month.”
The deal will give Rockwell the opportunity to allocate its financial, human and intellectual capital more efficiently across a broader resource base.
The transaction is subject to customary and regulatory approvals conditions as well as Rockwell raising $12 million on or before March 31 2015. The company expects the deal to close in the second quarter of 2015.
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