Rockwell provides production update for second quarter of fiscal 2013 ending August 31, 2012

VANCOUVER, Sept. 12, 2012 /CNW/ - Rockwell Diamonds Inc. ("Rockwell" or the "Company") (TSX: RDI) (JSE: RDI) (OTCBB: RDIAF) posts improved year-on-year diamond production for the second quarter (+14%) on the back of better volumes of gravel processed (+23%). These increases were achieved despite a temporary suspension of activities at Tirisano while management works on delivering against the new plan detailed in the release of July 12, 2012.

Second quarter operational update:

Volume and carat production for the Company's operational mines for the quarter ended August 31, 2012 was as follows:

Saxendrift Complex:

• Saxendrift and the newly acquired Jasper Project achieved a 26% combined year-on-year increase in volumes processed to 476,825 m³ for the second quarter which, along with production from the Bulk X-ray project, delivered a 6% increase in diamond production (1,996 carats); operationally, the mine achieved its budgeted throughputs for the period.
• Saxendrift has over the past two quarters moved to processing lower grade sandy gravels which make up most of the remaining resources. This requires better mining efficiencies and in-pit screening to maintain a profitable production profile for this part of the greater Saxendrift, Saxendrift Hill and Jasper deposits.
• A preliminary bulk-sample was mined during August 2012 on the "next door" Jasper part of the deposit with the intention of developing a better understanding of Jasper's diamond grade and value characteristics and its potential to extend the life of the Saxendrift Complex using the existing mining and processing infrastructure.
• The focus at the Bulk X-ray plant was the reprocessing of recovery tailings as well as the implementation of Continuous Operations ("Contops") and optimizing the materials preparation area to convert the pilot sampling plant to meet the needs of a continuously operated production plant. A grade of 2.5 carats / 100 m³ was achieved from processing 4,808 m³ of tailings material.
• Initiatives to increase and extend the mine life of Rockwell's package of Middle Orange River properties and the associated operational footprint are ramping up and include the introduction of the Jasper Project, Wouterspan Project and Saxendrift Hill Project into the operation:
• Further work on Jasper will include a detailed drilling campaign and additional bulk sampling to define mineral resources.
• Work has commenced on constructing a processing facility utilizing the Bulk X-ray technology that was successfully piloted at Saxendrift, with a monthly processing capability of 100,000 m³ on the nearby Saxendrift Hill. Production is planned to start in the first quarter of calendar 2013.
• The pre-feasibility study for Wouterspan is underway; work is on schedule and completion is expected by year end.

Tirisano:

• With the Tirisano right sizing strategy approved early in July 2012, mining operations were put on hold and work concentrated in reconfiguring the processing circuit. The rationalization project is on track and mining operations are scheduled to resume at a monthly mining rate of 50,000 m³ by the end of September 2012.
• The new wet front end that was commissioned early in the second quarter has been integrated into the new processing plant. Positive results have been received from the testing phase conducted during the quarter indicating that the plant will have an improved ability to process the clay-rich Tirisano gravels.
• Volumes processed at Tirisano during the first six weeks amounted to 57,803 m³, with the recovery of 558 carats, a year-on-year decline of 11% and 8%, respectively, from the second quarter of fiscal 2012.

Klipdam:

• Klipdam achieved a 27% year-on-year increase in volumes processed to 209,081 m³ for the second quarter; however, it fell short of the quarterly throughput target due to continued plant and mining limitations. These are being addressed with the installation of a second barrel screen in the processing plant and a continued focus on improving availabilities of the mining fleet.
• Notwithstanding the above, the mine's diamond production increased by 31% year-on-year to 2,274 carats as a result of an improved overall size distribution and quality from mining more of the paleaochannel gravels and primary Rooikoppie material.

Commenting on Rockwell's operational performance for the second quarter, James Campbell, CEO stated that: "As a direct result of the initiatives comprising our diamond value management focus, Rockwell's overall performance continues to show encouraging improvements. Saxendrift has met its production targets for the first two quarters of fiscal 2013. We continue to learn valuable lessons that we can selectively implement at our other properties in the Middle Orange River region to extend their economic lives and increase production. Through the concerted efforts of Rockwell's executive and mine management teams, we quickly right-sized the Tirisano mine to adjust to the current diamond market, positioning it to provide positive returns. At Klipdam, we were able to mine a better resource-area and the mine delivered a good operational performance. We still have some way to go in order to achieve our production targets which is a high priority for Klipdam in coming months."

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 production 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 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.

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 and milling; 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 and diminishing quantities or grades if mineral resources; uncertainties related to unexpected judicial or regulatory procedures or changes in, and the effects of, the laws, regulations and government policies affecting our mining operations; changes in general economic conditions, the financial markets and the demand and market price for mineral commodities such and diesel fuel, steel, concrete, electricity, and other forms of energy, mining equipment, and fluctuations in exchange rates, particularly with respect to the value of the US dollar, Canadian dollar and South African Rand; changes in accounting policies and methods that we use to report our financial condition, including uncertainties associated with critical accounting assumptions and estimates; environmental issues and liabilities associated with mining and processing; geopolitical uncertainty and political and economic instability in countries in which we operate; and labour strikes, work stoppages, or other interruptions to, or difficulties in, the employment of labour in markets in which we operate our mines, or environmental hazards, industrial accidents or other events or occurrences, including third party interference that interrupt operation of our mines or development projects.

For further information on Rockwell, Investors should review Rockwell's home jurisdiction filings that are available at www.sedar.com.

SOURCE Rockwell Diamonds Inc.