Dallas, Texas (July 21, 2011) – StockGuru shines its Spotlight on Rockwell Diamonds Inc. (“Rockwell” or the “Company”) (TSX: RDI) (JSE: RDI) (OTCBB: RDIAD). The Company announced the results of an independent valuation of the Company and the support of a key strategic shareholder in the current private placement. The valuation, dated February 28, 2011, was conducted by Jennifer Lucas, MBA, CBV, ASA, of Evans & Evans Inc. following an in depth review of the Company’s publicly available information and filings in addition to interviews with management from which it gained an understanding of the history, background and future growth plans. The Company closed on July 20, 2011, at $0.59 at the upper end of the Company’s fifty-two week trading range of $0.04 to $0.61.
Results of Independent Valuation:
“We have a sound understanding of our resources and have published a technical report for each of our properties,” said James Campbell, CEO, Rockwell. “Having completed a strategic review of the business at the beginning of this year, we have a full understanding of what we need to do to improve our financial performance. We are totally committed to sustainably improving our diamond recovery and thus accreting revenue and profitability in order to close the value gap.”
Rockwell was valued on a going concern basis using a weighted average of three valuation techniques at February 28, 2011 (“valuation date”):
- A trading price method utilizing the average trading price of Rockwell for the 10 and 90 days preceding the valuation date;
- A guideline public company method comparing Rockwell’s average dollar value per enterprise value of reserves and resources to a peer group of eight listed diamond mining companies; and
- An adjusted book value method using discounted cashflow of the underlying operations.
The underlying discount rates and fair market value of Rockwell’s operations and development properties based on the discounted cash flow method are as follows:
|Operation||Discount rate (%)||Value range|
|Fair Market Value*||Wouterspan||25.36 to 28.96||$47.4 million to $54.8 million|
|Tirisano||25.36 to 28.96||$17.6 million to $20.0 million|
|Klipdam||22.36 to 24.96||$3.6 million|
|Holpan||22.36 to 24.96||$281,000|
|Niewejaarskraal||25.36 to 28.96||$37.4 million to $42.5 million|
|Saxendrift||22.36 to 24.96||$15.5 million to $16.1 million|
|Resource properties||$121.9 million to $137.3 million|
|Adjusted book value**||$149.5 million to $165.0 million|
* 74% of mine
** Adjustments to balance sheet of Rockwell to evaluate fair value of net assets at February 28, 2011
The range of fair market value for Rockwell was determined to be $62.0 million to $69.1 million, based on a weighted combination of the three valuation methods described above:
|Valuation method||Midpoint of fair market value||Weighting||Value||Weighting||Value|
|Trading price method||$25,280,000||40%||$10,112,000||40%||$10,112,000|
|Guideline public company method||$15,800,000||30%||$4,740,000||25%||$3,950,000|
|Adjusted book value method||$157,250,000||30%||$47,175,000||35%||$55,037,500|
Update on private placement:
Rockwell’s strategic partnership with Daboll Consultants Ltd, an affiliate of the Steinmetz Diamond Group continues to strengthen. Steinmetz has recognized the inherent value in Rockwell with a subscription amounting to $5 million in the current private placement at a price of $0.75 per share (or 5 cents per share prior to the 15:1 consolidation).
“Our strategic partnership with Rockwell continues to grow from strength to strength. We have committed significant capital to the current capital raising initiatives which clearly demonstrates that we have complete confidence in their investment plans to improve the production profile,” explains Ori Temkin, CEO of Steinmetz Diamond Group.
“Our long standing strategic partner has identified that Rockwell presents an excellent investment opportunity as our stock is currently trading at a fraction of the value of its underlying assets, based on the Company’s future cash generation potential”, stated Campbell. “The significant capital that Daboll has committed to Rockwell’s private placement, together with the funds being raised from institutional and private investors as well as directors of the Company, will enable us to continue with our investment plans so that Rockwell can deliver on its potential.”
Subscriptions for the private placement are expected to close by July 22, 2011 with a special shareholders’ meeting to approve the transaction scheduled for August 25, 2011. Further announcements will made in due course.
About Rockwell Diamonds:
Rockwell is engaged in the business of operating and developing alluvial diamond deposits, with a goal to become a mid-tier diamond mining company. The Company has three existing operations, which it is progressively optimizing, two development projects and a pipeline of earlier stage properties with future development potential. Rockwell is also at an advanced stage of completing the acquisition of the Tirisano property.
Rockwell also evaluates merger and acquisition opportunities which have the potential to expand its mineral resources and production profile and would provide accretive value to the Company.
About Steinmetz Diamond Group:
‘Creators of the world finest diamonds’, With seven decades of expertise and heritage in the diamond industry, the company has a diversified interest in the diamond business – providing rough and polished diamonds to our customers around the world, cutting and polishing rough diamonds in Botswana, South Africa, Namibia and New York.
Steinmetz is known for its leadership in rare and exceptional diamonds as well as creation of unique high-end jewelry.
Some of the famous diamonds crafted by Steinmetz are the 203.04 carats, De Beers Millennium Star and the magnificent Steinmetz Pink – 59.60 carats, flawless fancy vivid pink diamond.
The group marketing arm has been innovative and creative through special exhibitions at the Smithsonian in Washington as well as ‘Diamonds’ at the Natural History museum in London. Steinmetz is a proud sponsor of Formula 1 team Vodafone McLaren Mercedes and holds annually the Monaco GP Flawless Engineering Weekend.
The main administrative offices are based in Geneva, Switzerland with a global presence in Antwerp, Tel Aviv, London, New York, Chicago, Dubai, Mumbai, Hong Kong, Johannesburg, Gaborone and Windhoek.
For more information, visit www.steinmetzdiamonds.com
Evans & Evans valuation parameters
The summary of the Comprehensive Valuation Report (“Valuation’) is qualified in its entirety by the full text of the Valuation. The analyses conducted by Evans & Evans, as described in the Valuation, should be considered as a whole. To focus on specific portions of each analysis and of the factors considered, without considering all analyses and factors, could create an incomplete and misleading view of the processes underlying the Valuation.
In connection with the preparation of the Valuation, Evans & Evans relied upon financial and other information, data, advice, opinions and representations obtained by Evans & Evans from public sources or provided to Evans & Evans by Rockwell or otherwise pursuant to the engagement of Evans & Evans. The Valuation is conditional upon the facts or representations that were relied upon. Subject to the exercise of their professional judgment and except as expressly described in the Valuation, Evans & Evans did not attempt to verify independently the accuracy or completeness of any such information, data, advice, opinions or representations.
The Valuation has been prepared on the basis of securities markets as well as economic and general business and financial conditions prevailing as at June 30, 2011 and on the condition and prospects, financial or otherwise, of Rockwell as reflected in the information and documents reviewed by Evans & Evans and as represented by executive officers and operating management of Rockwell.
No regulatory authority has approved or disapproved the information contained in this news release.
Forward Looking Statements
Except for statements of historical fact, this news release contains certain “forward-looking information” within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as “plan”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate” and other similar words, or statements that certain events or conditions “may” or “will” occur. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements.
Factors that could cause actual results to differ materially from those in forward-looking statements include uncertainties and costs related to exploration and development activities, such as those related to determining whether mineral resources exist on a property; uncertainties related to expected production rates, timing of production and cash and total costs of production; uncertainties related to the ability to obtain necessary licenses, permits, electricity, surface rights and title for development projects; operating and technical difficulties in connection with mining development activities; uncertainties related to the accuracy of our mineral resource estimates and our estimates of future production and future cash and total costs of production. In particular there can be no assurance that refinancing funds will be available to Rockwell on acceptable terms or any terms at all.
For further information on Rockwell, Investors should review Rockwell’s annual Form 20-F filing with the United States Securities and Exchange Commission www.sec.com and the Company’s home jurisdiction filings that are available at www.sedar.com.
To view this StockGuru Spotlight, please visit: http://stockguru.com/category/latest-spotlights/
To get free alerts on this and other similar stocks, please register here:
What is the StockGuru Spotlight?
Many companies covered in The StockGuru Spotlight have positive increases in both volume and share price. While this is not true in all cases, StockGuru strives to cover companies in The StockGuru Spotlight that are worth of our readers’ attention.
StockGuru looks for potential break-out candidates in The StockGuru Spotlight. Many of these companies have had recent news and appear to be getting the attention of investors. StockGuru does not typically feature companies in The StockGuru Spotlight that are compensating StockGuru for this coverage. There are times when StockGuru covers a stock in The StockGuru Spotlight that had previously compensated Stockguru. Where that is the case, a proper disclosure is included below. StockGuru and its partners, employees and writers never hold shares, short positions, warrants or any other current position in a stock featured in The StockGuru Spotlight.
To feature a company in The StockGuru Spotlight please contact the Publisher at firstname.lastname@example.org. If our reader is a key person for a publicly traded company, StockGuru can consider that company for either a StockGuru Spotlight or a StockGuru Profile. Please contact the StockGuru Publisher John Pentony at this email address: email@example.com.
Stockguru.com (“SG”) provides its members with the latest news, press releases, and trade alerts for all the companies highlighted on the site StockGuru.com. SG utilizes information believed to be reliable herein prepared all material. The information contained herein is not guaranteed by SG to be accurate, and should not be considered to be all-inclusive. The owner, publisher, editor and their associates are not responsible for errors and omissions. SG encourages readers and investors to supplement the information in these reports with independent research and other professional advice. All information on featured companies is provided by the companies profiled, or is available from public sources and SG makes no representations, warranties or guarantees as to the accuracy or completeness of the disclosure by the profiled companies or the information contained herein. The companies that are discussed in this opinion have not approved the statements made in this opinion. This opinion contains forward-looking statements that involve risks and uncertainties. This material is for informational purposes only and should not be construed as an offer or solicitation of an offer to buy or sell securities. SG is not a licensed broker, broker dealer, market maker, investment banker, investment advisor, analyst or underwriter. Please consult a broker before purchasing or selling any securities viewed on http://www.Stockguru.com or mentioned herein.
This release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. “Forward-looking statements” describe future expectations, plans, results, or strategies and are generally preceded by words such as “may”, “future”, “plan” or “planned”, “will” or “should”, “expected”, “anticipates”, “draft”, “eventually” or “projected”. You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in a company’s annual report on Form 10-K or 10-KSB and other filings made by such company with the Securities and Exchange Commission. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements. The forward-looking statements in this release are made as of the date hereof and SG undertakes no obligation to update such statements. StockGuru is occasionally compensated for coverage. When this is the case, SG clearly indicates this with a disclosure of all compensation received in the past and present. Additionally SG also discloses any anticipated compensation in the future. Compensation is typically in cash. Sometimes a company pays SG in restricted shares. Pentony Enterprise and its associated companies does not take free trading shares for any reason at anytime. StockGuru is not a registered investment adviser or a broker-dealer. StockGuru makes no recommendation that the purchase of securities of companies profiled in this web site is suitable or advisable for any person, or that an investment in such securities will be profitable. In general, given the nature of the companies profiled and the lack of an active trading market for their securities, investing in such securities is highly speculative and carries a high degree of risk.
John Pentony, Publisher, Stockguru.com
Tel: +1 469 252 3031