Rockwell Diamonds CEO Says Firm in 'State of Despair'

(IDEX Online) – Rockwell Diamonds reported that production volumes were down 4% on Q1 2017 and 8% on Q2 2016.

Carat sales at 4,849 carats were stable on Q1 2017 and down 9% on Q2 2016, while the value of sales – decreased 17% from Q1 2017 and 21% from Q2 2016, to $7.6 million (excluding beneficiation).

Total sales, including royalty contractors’ production but excluding beneficiation, were also down by 14% on Q1 2017 and 16% on Q2 2017.

The average price per carat declined by 16% on Q1 2017 to $1,560.

Commenting on second quarter production and sales and the business in general, Tjaart Willemse, Executive Officer said: “From my observations to date on the general health of the business and understanding of the main contributors to its current position, it is clear that the business finds itself in a state of despair for a number of reasons. There has been a general breakdown in controls over a considerable period of time, non-adherence to the procurement policy, amongst others, being very prevalent.

"This, coupled with inadequate work planning and the lack of project front-end loading, has led to a series of financial management concerns and business risks. Blurred lines of accountability, both within the organization and between the company and some of its service providers, does not bode well for proper management and control of the business and a perceived lack of a sense of urgency further exacerbates the potential for failure.

"Following some changes to the team and with the full co-operation of the remaining management and the outgoing CEO, the board led intervention with myself as the new leader will continue. I am pleased to report some significant progress has already been made and I hope to be able to update stakeholders in more detail when we release the quarterly results next month.

"In conclusion, I am of the opinion that, with appropriate controls in place and with the right team to execute it, Rockwell can be turned around to deliver good shareholder value”.