Rockwell Diamonds Inc. announced earnings and production results for the third quarter ended November 30, 2012. Quarterly diamond production up 12% year-on-year, underpinned by a 6% increase in volumes of gravel processed despite ongoing challenges at Tirisano. Operating margin: CAD 950,293 before amortization, depreciation and corporate overhead. Revenue from diamond sales before beneficiation up 23% year-on-year to CAD 7.1 million. Third quarter fiscal 2013 loss of CAD 1.5 million after depreciation (before corporate overhead and tax). The net loss for the quarter totaled CAD 4.7 million. In the third quarter of fiscal 2013, the Company showed increased revenues from diamond sales for the fourth consecutive quarter. In particular, diamond value management initiatives have delivered at the Saxendrift Complex where volumes processed and carat production are trending upwards while unit costs remain within the target range despite upward pressure imposed due to higher fuel costs and more intensive transport costs associated with the bulk sampling activities at the nearby Saxendrift Extension Project. At Klipdam, which made a further loss in the third quarter, an optimization plan was initiated at the beginning of November with early indications that the targeted cost reductions are achievable. The Saxendrift Complex recorded total diamond sales of $5.9 million translating into revenue/m(3) of $12.10, compared to the average mining cash cost/m(3) of $8.43. Klipdam had total diamond sales of $982,957 or revenue/m(3) of $4.51, compared to the average mining cash cost/m(3) of $11.44 which catalyzed the decision to implement an optimization plan at the operation in order to achieve higher throughput volumes and thereby lower the unit costs. These two mines contributed a combined operating profit of $1.9 million in the third quarter. Tirisano incurred an operating loss of CAD 1.0 million in the third quarter, prior to the decision to place the operations of the mine on care and maintenance in early December 2012.

The company produced 5,950 carats and 4,043 carats sold at average price of $1,821 per carat. Saxendrift produced above average grades with its processing operations functioning smoothly and at budgeted costs. Encouraging results from further bulk sample extracted at Saxendrift Extension Project. Construction of Saxendrift Hill Complex Mine on track to commence in first quarter of calendar 2013: Rapid pay back projected on $1.2 million capital investment, all funded internally.

The company is optimistic that with improving diamond prices since the beginning of November 2012 after prices declined by between 15% and 20% in the first half of the 2012 calendar year, the market is positioned to increase by a few percent in 2013. This view is supported by good interest at the Hong Kong show in November 2012 and increased attendance at open market tenders. Reflecting this trend, Rockwell also experienced higher attendance at its closing tenders for 2012 supporting higher prices and providing some evidence of a more stable market than in previous years.

The company has developed a blueprint for the construction of new processing plants at its high potential projects in the Middle Orange River region, based on the success of the fit-for-purpose technologies, including the in-field screen, Bulk X-ray and single particle sorter plant implemented at Saxendrift. Initiatives to increase and extend the mine life of Rockwell's Middle Orange River properties include the construction of a new mine at the Saxendrift Hill Complex, utilizing Bulk X-ray technology with a monthly processing capability of 100,000 m(3) and the pre-feasibility study for Wouterspan is progressing on schedule. Possible developments during calendar 2013 include installing an in-field screen at the Saxendrift Extension Project and assessing the development of a mine similar to the Saxendrift Hill Complex at the Company's Niewejaarskraal Project.

The company announced that it has further strengthened its board of directors with the appointment of Richard Peter Menell as a non-executive director with effect from January 9, 2013. He has had a 35-year career in the mining industry, heading Anglovaal Mining and Teal Exploration & Mining up to 2008 as well as serving in a non-executive capacity on a number of company boards.