‘Prevailing Static Conditions’ Causes Rockwell to Extend Shutdown

Rockwell Diamonds Inc. is extending its mine shutdown to the end of January due to continued weakness in the diamond market, the diamond miner said. In late November 2008, Rockwell said that in order to conserve cash, it will extend the normal year-end operational shutdown period of its South African alluvial diamond mines until January 5.

Rockwell stopped operations on November 28. It planed to do maintenance and repair work in the first week of December. The suspension at Wouterspan is likely to result in staff reduction.

The decision follows a review of the “prevailing static conditions in the diamond market, cash flow projections, operational parameters and costs, and technical factors such as grade characteristics of each mining operation.”

Further to this review, the company is also planning to restructure its Middle Orange River operations to reduce costs and increase production.

“Global economic conditions have brought diamond prices under pressure,” President and CEO John Bristow said. “In this environment, we continue to take steps to improve operational efficiencies and maintain the competitiveness of the company.”

Bristow added that the company acknowledges the performance of their employees and, “in particular, those likely to be affected by the restructuring.”

Rockwell is expected to release on Wednesday financial results for the period ended November 30. It estimated per share earnings for the nine month period ending November 30 at Canadian $0.01.