Rockwell: Blue Gum to Account for Half Our Production by 2011, to ID Diamonds

The foundation to Rockwell Diamonds’ future success lies in its acquisition of Blue Gum, Rockwell president and CEO John Bristow said during a company luncheon in New York on Wednesday.

Hosting investors, press and industry professionals, Bristow gave a forward-looking presentation focused on Rockwell’s expansion into new ventures, such as their purchasing agreement with Steinmetz, and new acquisitions, such as the Blue Gum diamond operation that was announced last week.

This purchase from Etruscan Diamond Limited will help Rockwell in two ways. Not only are the newly acquired assets expected to produce a vaster quantity of goods at a higher quality with an average size of 0.9 carats, they will also alleviate monthly quotas if another of Rockwell’s sites needs maintenance.

Rockwell is clearly keeping an eye at its low share price, currently at $0.07 on the OTC. By 2011, Rockwell’s 5-year strategy hopes to have the Blue Gum produce almost half of Rockwell’s carat production monthly, or about 4,000 carats. The operation, though promising high volumes and quality tonnage, does not show promise for larger diamonds, such as the 52.40 carat light yellow diamond from Rockwell’s Holpan mine or the 74.99 carat white diamond from Saxendrif.

In lieu of tendering all of their larger goods, Rockwell is marketing them with Steinmetz, which polishes and markets the goods, and splitting the revenues. This is not a common agreement. However, considering that the market for larger goods is weak, the hopes of reaping large profits from a tender system currently seems less promising than the steady income of Steinmetz paying 90 percent for the goods valuated more moderately upfront. After the sale, Steinmetz pays the remaining 10 percent cost of rough, and 50 percent of the sale profit less a 3 percent marketing fee.

In a brief marketing postlude, Rockwell’s Jeffrey Brenner skimmed over an “identification concept” for all Rockwell diamonds. Brenner assured this branding initiative, seeming to bridge towards a retail front, has no intent to take Rockwell into the retail market. The concept would only be to give the consumer direction to the source and quality of the diamond.