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Vancouver - Rockwell Diamonds has entered into a purchase and sale agreement with Nelesco 318 for certain assets and the assumption of certain liabilities.
The cash consideration involved is R45m and the assumption of R70m in rehabilitation liabilities as well as the transfer of almost 100 employees.
The sale agreement is for non-core assets as part of its recently announced strategic repositioning and business turnaround plans.
In addition, deferred taxes of R29m arising on the 2015 purchase of Pioneer Minerals will be reversed, thus reducing consolidated liabilities by a total of R99m.
During the period up to completion of all conditions, Nelesco will operate on a contract mining basis with a royalty payable to the company of 2.5% of revenue from diamonds recovered from properties covered by the transaction and be responsible for any related rehabilitation liabilities.
In addition, the transaction provides for the lease of the Saxendrift office and accommodation complex back to the company for a period of twenty years as well as access to water. The company will provide electricity to Nelesco at cost.
"This transaction represents a significant milestone in our repositioning plans for the 'new Rockwell'," explains the CEO Tjaart Willemse. It not only brings in cash in addition to the recently announced funding by two of the key shareholders and a third party, but also disposes of non-core assets and associated liabilities, leaving the new Rockwell to focus on completing the next phase and ramp up of the Wouterspan mine and processing plant and advance its portfolio of development and exploration properties.
The transfer of 98 employees also assists with its employee right sizing initiative and reduces the number of retrenchees.
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