Rockwell acquires Middle Orange

Rockwell Diamonds Inc. announces details regarding the completion of the acquisition of the Trans Hex Middle Orange River Operations and Projects, which are located adjacent to Rockwell’s Wouterspan mining operation on the Middle Orange River in the Northern Cape Province of South Africa.

In early 2007, Rockwell and Trans Hex Group Limited (Trans Hex), through its wholly owned subsidiary Trans Hex Operations (Pty) Ltd (THO), announced that the companies had entered into an agreement whereby Rockwell’s wholly owned South African subsidiary, Rockwell Resources RSA (Pty) Ltd (Rockwell RSA), would acquire two open pit alluvial diamond mines (Saxendrift and Niewejaarskraal) currently on care and maintenance, and three alluvial diamond exploration projects (Kwartelspan, Zwemkuil-Mooidraai, and Remhooget-Holsloot) referred to collectively as the Middle Orange River Operations (MORO) from Trans Hex (the “Transaction”). Pursuant to the terms of the Transaction, Trans Hex would transfer all its relevant mineral rights and associated assets into a new special purpose vehicle (Saxendrift SPV) which Rockwell would acquire via Rockwell RSA.

To complete the Transaction, Rockwell will pay Trans Hex approximately ZAR115.5 million in cash and interest, and assume liabilities for previous staff retrenchments of approximately ZAR4.7million for a total consideration of approximately ZAR120.2 million (CDN$15.7 million). Trans Hex has effectively provided an amount to Rockwell of ZAR7.8 million in environmental guarantees for previous mining and prospecting liabilities which have been assumed by Rockwell as part of its plan to re-process and rehabilitate material from previously mined areas and tailings sites on the Saxendrift property, and to mine and rehabilitate remaining areas of undisturbed in-situ alluvial deposits. Funds for the purchase of the Trans Hex MORO were set aside from Rockwell’s 2007 capital raising.

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