Announcing a drop in both production and sales for the three months ended August 31, 2016 (Q2), Rockwell Diamonds Inc. said that the Board had reviewed the Company’s performance and instituted appropriate changes to ensure a turnaround shortly.

Releasing details of the new strategy, the Company said it was outsourcing mining services and selling the earthmoving vehicle fleet to externalize risk from variance in mining volumes and equipment availability, as well as revising plans at some of its mining sites. This includes commissioning of the third and fourth line of the Wouterspan wet plant, reducing output at Remhoogte, and developing a resource development strategy for MOR, among other steps.

On the production side, volumes in Q2 were down 4% on Q1 2017 and 8% on Q2 2016, due to the planned scaling down of operations at Saxendrift, which was partly compensated by a 10% increase in volumes processed at RHC. Similarly, MOR grades were down 7% on Q1 2017 and 8% on Q2 2016, owing to diminished recoveries from the middlings material at Saxendrift (which was down 13%) and reduced grades at RHC (down 14%).

During Q2, Carat sales stood at 4,849 carats, stable on Q1 2017 and down 9% on Q2 2016, while the value of sales decreased 17% from Q1 2017 and 21% from Q2 2016, to US$7.6 million (excluding beneficiation).

Rockwell said that total sales (including royalty contractors’ production but excluding beneficiation) were also down by 14% on Q1 2017 and 16% on Q2 2017. It added that the average price per carat declined by 16% on Q1 2017 to US$1,560.

Tjaart Willemse, Executive Officer said, “Following some changes to the team and with the full co-operation of the remaining management and the outgoing CEO, the board led intervention with myself as the new leader will continue. I am pleased to report some significant progress has already been made and I hope to be able to update stakeholders in more detail when we release the quarterly results next month.

In conclusion, I am of the opinion that, with appropriate controls in place and with the right team to execute it, Rockwell can be turned around to deliver good shareholder value”.