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Rockwell strikes C$4.3M deal to sell noncore assets in South Africa

Rockwell Diamonds Inc. said Dec. 22 that it struck a C$4.3 million deal with Nelesco 318 Pty. Ltd. to sell certain noncore assets, as part of its turnaround plan announced in November.

The payment will be made in three installments upon meeting certain conditions. During the period up to completion of all conditions, Nelesco will operate on a contract mining basis and will pay a 2.5% royalty on revenue from diamonds recovered from the properties covered by the transaction.

Rockwell will also get a 20-year lease for the Saxendrift office and accommodation complex as well as access to water. The Toronto-listed company will provide electricity to Nelesco at cost.

The buyer will also assume C$6.7 million in rehabilitation liabilities related to the assets.

In addition, some C$2.8 million in deferred taxes stemming from the 2015 purchase of Pioneer Minerals will be reversed, resulting in a C$9.5 million reduction of consolidated liabilities.

Rockwell will book an impairment of C$1.3 million for the transaction.

Rockwell CEO Tjaart Willemse said the deal will bring in cash while allowing the company to focus on completing the next phase and ramp-up of its Wouterspan diamond mine and processing plant in South Africa.