JOHANNESBURG (miningweekly.com) – South African diamond miner Rockwell Diamonds has completed a “substantial” portion of the conditions precedent for its acquisition of the Remhoogte/Holsloot operations and associated assets, paving the way to close the transaction and assume ownership on June 1.

The properties and assets were contiguous to Rockwell’s existing properties and would significantly enlarge its resource base in the Middle Orange River (MOR) region. 

All conditions precedent, including evidence of sufficient financing, to complete the acquisition of the project and its associated plant and equipment in the MOR had been met and the transaction was on track for financial completion by the end of May.

The JSE- and TSX-listed company had further secured and signed bridging loan agreements to meet the reduced purchase consideration of $21.9-million through the exclusion of certain earthmoving equipment from the assets being acquired.

The revised sales agreement included the sale by Rockwell of the Saxendrift extension property – acquired in March 2013 – for $500 000, subject to the normal regulatory approvals.

All required regulatory approvals pertaining to the deal, including South African Competition Commission consent and Section 11 authorisation from the Department of Mineral Resources to transfer the Remhoogte mineral rights to Rockwell, had been granted.

Commenting on the acquisition, Rockwell CEO and president James Campbell said the closing of the conditions precedent was significant, as the operations were contiguous to its existing MOR properties and had continued to yield high-value diamonds since the announcement of the transaction in January.

“In April, we took the decision to delink the proposed equity financing from the transaction and arranged bridge loan financing, enabling us to close within the agreed upon timelines.

“The bridging loan to settle the revised purchase price of $21.9-million was supported by anchor shareholders and we will be taking over operations on or before June 1,” he said in a statement on Thursday.

Campbell added that Rockwell planned to offer its 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 a month of quality gravels in the MOR, with the early life Remhoogte/Holsloot project spearheading a new era for Rockwell,” he said.

The Remhoogte/Holsloot project’s three processing plants had a processing capacity of about 200 000 m3 a month.

At Remhoogte, a processing plant was commissioned in June 2014 from all-new equipment, consisting of a Bourevestnik bulk X-ray system for the processing of coarse gravels and a four rotary pan plant to treat the fine gravels.

A second rotary pan plant at Remhoogte consisting of four pans was commissioned on the property in November 2014.

At Holsloot, a processing plant was recently commissioned from new equipment and consists of a desanding system, a Bourevestnik Bulk X-ray system for the processing of coarse gravels and a dense media separation system for fine gravels. 

As announced in March, an inferred mineral resource of seven-million cubic metres of Rooikoppie gravel at a grade of 0.9 ct/100 m3 with an average value of $2 900/ct has been estimated at Remhoogte after reevaluating historical, geological and field mapping data, the survey of areas mined and available production and sales results.

The largest stone recovered from Remhoogte to date weighed 178 ct.

In addition, as part of its ongoing evaluation of the Bondeo acquisition properties, Rockwell identified an exploration target with potential for the discovery of a further three-million to four-million cubic metres of fluvial-alluvial gravels and anticipated diamond values of between $2 500/ct and $4 000/ct.

The company intended to announce a further resource estimation on the fluvial-alluvial gravel once bulk sampling had been completed.

At the Remhoogte/Holsloot project, around 1.1-million cubic metres of gravel was processed between March 2014 and February 2015, recovering 10 379.48 ct of high-quality diamonds produced at a grade of 0.9 ct/100 m3.