progress update on - hdgold.comprogress update on strategy and future plans ... high net worth...

PROGRESS UPDATE ON

STRATEGY AND FUTURE PLANS JAMES CAMPBELL

JUNE 2012

FOCUS ON DIAMOND VALUE MANAGEMENT

STOP PRESS!

2

• STEINMETZ FOREVERMARK JUBILEE PINK

• Saxendrift diamond selected for display at the

TOWER OF LONDON as part of Queens Diamond Jubilee

• The cushion cut, pink-brown diamonds weighing 35.60

carats, was cut from a 179.60 carat rough diamond that was

sold into the Company’s BENEFICIATION joint venture with

Steinmetz Diamond Group (“SDG”)


AGENDA

• WHO IS ROCKWELL?

– Beneficiation and Rough Diamond Production

– Operations and Resources

– Team

– Capital structure and shareholding

• PROGRESS UPDATE

– Performance overview

– Strategic review

– Progress with turnaround

– Investments and Technology Projects

– Valuation Gap

• WAY FORWARD

– Operational targets

– Growth objectives

– Diamond sector fundamentals

– Priorities and outlook

3

First diamonds recovered from bulk x-ray machine at Saxendrift

4

WHO IS ROCKWELL?


BENEFICIATION JOINT VENTURE: SIGNIFICANT VALUE ADD

5

ROUGH POLISHED BENEFICIATION

VALUE ADD

105 ct Type II

A, Middle

Orange

35 ct D color internally flawless

Sold for $230,000/ct

+62% on initial rough

sale price

212 ct yellow,

Middle Orange

102 ct vivid yellow

+50% on initial rough

sale price

128 ct yellow,

Middle Orange

81 ct vivid yellow

Not yet sold

Steinmetz Diamond Group (SDG) profit share agreement (>2.8 carat stones)

• MARKET RELATED PRICES for diamonds sold into JV + 50% profit share

• Realized revenue of $7.8m in F2012

• ±25% of revenue from beneficiation, expected to increase


ROCKWELL ROUGH DIAMOND PRODUCTION: AVERAGE US$/CARAT

$90/carat <0.3 c/stone #

$1,100 /carat ~1.2 c/stone #

$2,000/carat ~2.5 c/stone #

World Diamond Average

$700/carat ~0.9 c/stone #

Tirisano (North West Province, RSA)

Klipdam (Vaal River, RSA)

Saxendrift* /Wouterspan/Niewejaarskraal (Middle Orange River, RSA)

Small diamonds used in lower

price point and pavé jewellery

Engagement rings (Bridal-range),

mid to high price point jewellery

Engagement rings, high price point

jewellery

High-end luxury jewellery

High Net Worth Individuals

Investment Stones

# - Rough stone average sizes

6

* - Before increasing the bottom cut off to 5mm


ROCKWELL OPERATIONS AND PROJECT LOCALITIES:

NORTHERN CAPE AND NORTH WEST PROVINCES, SOUTH AFRICA

7


Category Volume (m3)

Carats Value (USD)

millions Feb 28 2011

Probable reserves 4,565,400 22,827 46.3

Indicated resources 34,787,600 675,412 489.6

Inferred resources 82,062,000 828,641 1,141.1

1,677.0

See www.rockwelldiamonds.com for detailed 43-101 Mineral

Reserves & Resources: At 28 February 2011.

Estimates completed by Rockwell’s Manager, Resources, G.A. Norton, (Pr.

Sci. Nat.), a qualified person who is not independent of the Company.

Reviewed by T.R. Marshall, PhD, (Pr. Sci. Nat.), Marshall, an independent

qualified person

EXTENSIVE DEPOSITS TO BENEFIT FROM DIAMOND FUNDAMENTALS

8

Operation Processing capacity

(m3 p.m. ) Carats per month

43-101 value

(US$ per carat) Life of Mine (years)

Middle Orange River:

Saxendrift 150,000 750 2,029 5

Vaal River:

Holpan* and Klipdam Klipdam: 90,000 Klipdam: 850 Klipdam: 1,229 Klipdam: 2

Ventersdorp:

Tirisano 90,000 1,400 606 18

http://www.rockwelldiamonds.com/






LEADERSHIP TEAM WITH CREDENTIALS TO DELIVER VALUE

Board of Directors:

Mark Bristow (Chairman)

Dave Copeland

Richard Linnell

Willem Jacobs

Sandile Zungu

Johan van’t Hof

Stephen Dietrich

A leading international diamantaire and

specialist in valuation, marketing and

sales of rough diamond production from

alluvial deposits.

Diamond Marketing & Sales Manager

Jeffrey Brenner

Geological, mineral resource

management and production

experience in alluvial diamond deposits,

diamond and coal exploration. Qualified

person and Pr.Sci.Nat.

Group Technical

Manager

Glenn Norton, BSC (Hons)

9

Seasoned diamond executive with

career spanning over 20 years at De

Beers and 4 years as Managing

Director of African Diamonds plc.

FIMMM, C.Eng, C.Sci and Pr.Sci.Nat.

President and CEO

James Campbell, BSc (Hons ) ARSM,

MBA (Dunelm)

>12 yrs in investor relations and

corporate development. Worked as a

sell side analyst and in-house IRO

across industry sectors.

Corporate Development

Stéphanie Leclercq BSc, CFA

Mining and corporate experience with

junior and senior mining companies with

operations in SA, Australia and Canada.

Knowledge of public listed mining

Companies.

CFO

Gerhard Jacobs, BAcc, MBA

Group HR/IR Manager

Richard Mhlonto, Nat Dip (HR Management

& Development)

Extensive HR & Industrial Relations

management experience including

organizational and structural design

initiatives as well as strategy

development and implementation.

>30 yrs in diamonds incl. mgt. roles at

Orapa (world’s largest diamond mine) &

The Oaks (De Beers’ smallest mine).

Operations Manager at Pangea

DiamondFields plc from 2007.

COO

Michael Hunt, MSc (Advanced Chemical

Engineering)

Expert in economic diamond metallurgy.

Contracted to Rockwell for fiscal 2012.

Dr Kurt Petersen,

Ph.D. (Stellenbosch)


CAPITAL STRUCTURE AND SHAREHOLDING

10

Number of shares

Shares outstanding 47,942,746

Warrants -

Options ($0.90-9.45) 2,121,931

Convertible Debt (~$0.56) 3,499,257

Fully Diluted 53,563,934

Top shareholders (% shares in issue)

Strategic:

• Daboll (Steinmetz) 21.3%

• Godia Capital 8.3%

• Middle East Investors 7.1%

Institutional:

• Conus Partners 6.9%

• Earth Resources (ERIG) 3.6%

• Craton Capital 2.6%

• Wells Capital 1.6%

Other:

• Etruscan 2.6%

• Mark Bristow 1.2%

PROGRESS UPDATE


FISCAL 2012 PERFORMANCE OVERVIEW

• Substantial progress with REPOSITIONING of Rockwell by new management

• Beneficiation continues to add value: 64% INCREASE in beneficiation revenues to $7.8m

• Saxendrift performance trending up: Direct result of DIAMOND VALUE MANAGEMENT strategy

– 26% INCREASE in rough diamond sales to US$17.5m with 22% increase in average carat value

• Long term production asset BROUGHT ON STREAM: Tirisano mine ramp up making progress

– One time cost of ramp up of $6.7m charged to earnings

• Operating profit of $7.3m: Mining costs DOWN 4% despite impact of Tirisano costs

• Net loss of $13.7m: Impact of STRATEGIC DECISIONS place Rockwell on a SOLID FOOTING

with cleaner balance sheet

– Flow through to financials as mines continue to improve production with lower unit costs

– Midamines settlement and associated costs ($1.5m) and asset impairment ($4.9m)

• CONTOPS implemented in January 2012 at Saxendrift and Klipdam

• Net cash balances of $9.9M preserved to fund growth

• Investments positioned Rockwell to deliver further IMPROVEMENTS and pursue GROWTH OPPORTUNITIES

in fiscal 2013

12


STRATEGIC REVIEW CATALYZED CORPORATE TURNAROUND

• STRATEGIC REVIEW initiated after management changes in December 2010

• To achieve key CORPORATE OBJECTIVE: increasing annual production of

high-quality gemstones to 120,000 carats in 5 yrs

• TURNAROUND commenced with appointment of new management team

in June 2011

– CEO + COO with >50 years joint diamond experience

– DIAMOND VALUE MANAGEMENT: Brought focus on quality and

embedding new work culture throughout operations

• Comprehensive OVERHAUL of business focused on

– Optimizing the productive mines to deliver better returns

– Driving down costs

– Improving metallurgical processes

– Focus on recovery of diamonds as part of diamond value management

• Next phase: LEVERAGE PRODUCTION PROFILE by developing asset

inventory + possible M&A opportunities

13


PROGRESS ON STRATEGIC REVIEW

• Understanding of GEOLOGY found to be rigorous with NI 43 101 reports on all properties

• Production issues in plant environment addressed through increased focus on DIAMOND PROCESSING

METALLURGY

• SAXENDRIFT: Completion of new FIT FOR PURPOSE in field screen and bulk x-ray pilot project

– ON SCHEDULE: Delivering positive recovery performance and results

– New process technologies: BLUEPRINT for future mine development

• KLIPDAM: Economics for remaining LOM improved

– Mine plan adjusted to Rooikoppie with less intense earthmoving requirements

• TIRISANO: Ramp up in progress

– Short term impact on profitability: $6.7m = Full operating and ramp up costs expensed

• HOLPAN: Put on care and maintenance in May 2011

– Was delivering marginal results and reaching end of LOM

– Options to bring this asset to account under consideration

14


CORPORATE LEGACY ISSUES RESOLVED

• RECAPITALIZATION in Q3: Private placement raised $7.8m + $6.5m from sales of non-core and underutilized assets

– Partly deployed: Implement technology improvements at Saxendrift and complete Tirisano plant

– Solid business case to underpin all further use of funds

• RESOLUTION of Midamines dispute: Final settlement of $1.2m paid

– Company is not aware of any other outstanding litigation

• FINALIZATION of an agreement with AVR: Effectively unwinds 2008 BEE deal (Northern Cape operations)

– Included acquisition of AVR’s Jasper Mine: contiguous to Saxendrift Mine with potential to extend LOM

– In negotiations to introduce other BEE groupings

• STRENGTHENED Board of Directors:

– Chairman: Mark Bristow

– Non-executives + audit committee: Johan van ‘t Hof and Stephen Dietrich

• In depth analysis of ASSET REGISTER to ensure accurate reflection of assets in balance sheet

– $4.9m impairment of property, plant and equipment

15


DIAMOND VALUE MANAGEMENT: TANGIBLE BENEFITS IN Q4

Production Sales and inventories

Volume (m3) Carats Mining costs

Value of Sales

(US$) Sales (carats)

Average value

(US$ / carat) Inventories (carats)

Fourth quarter

fiscal 2012 661,627 4,043 10,370,000 6,030,376 5,795 1,041 114

16

• SAXENDRIFT: 42% increase in rough diamond sales to US$17.5m with 32% increase in carats sold

– 50% increase in carats produced and 5% drop in unit cost

• TIRISANO: Ramp up in progress with revenue of US$0.5m

– Good progress with wet front end

• STRATEGIC DECISIONS: Holpan mine on care and maintenance and trial mining at Klipdam Extension ceased

• Cost per carat DOWN 6%: Total mining costs down 3%

– Despite impact of Tirisano and upward pressure due to fuel, wages and maintenance costs

• CASH POSITIVE with net cash of $9.9m: After funding capex of $4.0m


TECHNOLOGY PROJECTS AT SAXENDRIFT: IN FIELD SCREEN

• CHALLENGE:

– High sand content in gravel and productivity

impact when processing wet gravels

• SOLUTION:

– 3.0m x 8.0m Dabmar Bivitec screen

commissioned in November 2011

– Designed to treat sandy and wet gravels at

required processing rates

• IMPACT:

– Running at > 95% efficiency and operating at

17% above design throughput

– Monthly volumes up 30% (incl. impact of contops

and increased bottom cut off)

17


TECHNOLOGY PROJECTS AT SAXENDRIFT: BULK X-RAY

• CHALLENGE:

– Low efficiencies in traditional pan plants and final

recovery

• SOLUTION:

– High throughput Bourevestnik (BV) sorter and

one BV single particle sorter to improve

concentrate efficiency and final sorting of

diamond bearing ore (capex $1.5m)

• IMPACT:

– Recovery in first 4 weeks: 316 stones = 1,109

carats have been recovered

– 14 stones >10 carats with largest weighing 76.4

carats

18


TECHNOLOGY PROJECTS AT TIRISANO: WET FRONT END

19

• CHALLENGE:

– Current dry front-end cannot

deal with wet, clay rich

gravels

• SOLUTION:

– High water volume monitoring

and screening plant

(capex $200k)

• IMPACT:

– Currently being production

commissioned


CASHFLOW: INVESTING IN CAPACITY FOR GROWTH

20

BALANCE SHEET PROVIDES REQUIRED WORKING CAPITAL TO

ACHIEVE SHORT TO MEDIUM TERM OBJECTIVES

0

2

4

6

8

10

12

14

16

18

20

Ope

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cas

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quiv

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Cas

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by O

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Net

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Pro

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ent

Pro

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Pro

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irisa

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and

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Mov

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depo

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Clo

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$m


CORRELATION: RESOURCES TO PRODUCTION

0.50.60.70.80.91.01.11.21.31.41.5

Q1

2007

Q2

2007

Q3

2007

Q4

2007

Q1

2008

Q2

2008

Q3

2008

Q4

2008

Q1

2009

Q2

2009

Q3

2009

Q4

2009

Q1

2010

Q2

2010

Q3

2010

Q4

2010

Q1

2011

Q2

2011

Q3

2011

Q4

2011

Gra

de

ct/1

00m

³

Klipdam Recovered Grade vs. Resource Grade

Mine Grade 43101 Grade Budget Grade

0.0

0.5

1.0

1.5

2.0

2.5

3.0

May

08

Au

g 0

8

No

v 08

Ap

r 09

Jul 0

9

Oct

09

Jan

10

Ap

r 10

Jul 1

0

Oct

10

Jan

11

Ap

r 11

Jul 1

1

Oct

11

Jan

12

Ap

r 12

Gra

de

ct/1

00 m

³

Saxendrift Recovered Grade vs. Resource Grade

Mine Grade 43101 Grade Budget Grade Linear (Mine Grade)


INDEPENDENT VALUATION: CONFIRMED VALUATION GAP

22

Adjusted book value / Fair Market Value of Properties

using discounted cashflow

Resource properties: $121.9m - $137.3m Adjusted book value: $149.5m - $165.0m

Wouterspan ($47.4m - $54.8m)

Tirisano ($17.6m - $20.0m)

Klipdam ($3.6m)

Holpan ($281,000)

Niewejaarskraal ($37.4m -

$42.5m)

Saxendrift ($15.5m - $16.1m)

30%

30%

40%

0

10

20

30

40

50

60

70

Weighted market value estimate: $62m

Adjusted book value method

Guideline public company method

Trading price method

Additional details contained in “Additional Information”


PEER GROUP REVIEW OF DIAMOND JUNIORS:

FURTHER CONFIRMATION OF ROCKWELL’S VALUE UPSIDE

23

Source: Company websites, ThomsonReuters

0

200

400

600

800

1000

1200

Diamond-corp

Firestone Lucara MountainProvince

Namakwa RockwellDiamonds

Stellar Trans Hex

Average price/carat sold (US$)

0

1

2

3

4

5

6

7

Diamond-corp



Stellar Trans Hex

Price: Tangible Book Value

0%

2%

4%

6%

8%

10%

12%

Diamond-corp



Stellar Trans Hex

Market Cap: Resource value

$(100)

$-

$100

$200

$300

$400

$500

Diamond-corp



Stellar Trans Hex

Enterprise value ($m)

WAY FORWARD


OPERATIONAL TARGETS FOR FISCAL 2013

MINE PRODUCTION

(m3)

GRADE

(carats/100m3)

CASH OPERATING

COST/m3 CAPITAL

EXPENDITURE

REVENUE/CARAT

(US$) BUDGET F2012

KLIPDAM At name plate

capacity (90 000) Stable $7.32* $10.72 Minimal

In line with F2012

YTD

SAXENDRIFT

Increase to 150

000 with new in-

field screen

Stable $8.42 $8.27 $400,000 In line with two

year average

TIRISANO

Ramping up to

90,000m3 p.m.

06/2012

Gradual

improvement to

1.8 by 06/12

$10.38** $20.11 $750,000 In line with stated

prices of $700

25

- ZAR/CAD exchange rate of 8.00 - Full implementation of contops at all operations for F2013

- Corporate expenses budgeted to remain stable

- Beneficiation (stones > 2.8 carats) not included in average price per carat expectation

* Change of mining plan ** Ramp-up


GROWTH PLAN: CREATE CRITICAL MASS AND SCALE Further upside potential from Jasper Mine

Reviewing additional capital requirement to fund expansion with preference for internal cash flows

Projected production based on mine plans in November 2010 preliminary assessments (Tirisano,

Wouterspan and Niewejaarskraal) and prefeasibility study (Saxendrift). Refer to Saxendrift resource

statement on www.rockwelldiamonds.com

26

* Based on budgeted carat values for 2013 and 2.5% annual price increases

-

200,000

400,000

600,000

800,000

1,000,000

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

F2012A F2013 F2014 F2015 F2016 F2017 F2018

Vo

lum

e / m

on

th (

m3)

Tota

l car

ats

/ yea

r

Production targets

Niewejaarskraal Wouterspan Tirisano Klipdam Saxendrift Other Total Production / month

0

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

300,000,000

F2012A F2013 F2014 F2015 F2016 F2017 F2018

Rev

enu

e / y

ear

($m

)

Revenue targets *

Other Niewejaarskraal Wouterspan Tirisano Klipdam Saxendrift


REVIEW OF INVESTMENT OPTIONS: VALUE CREATION POTENTIAL

0

2

4

6

8

10

12

Wouterspan Niewejaarskraal SaxendriftExtension

TirisanoExpansion

NPV / Capital Expenditure (times)

27

Wouterspan

Saxendrift Extension IFS

Only

Saxendrift Extension

Complete Plant

Tirisano Expansion

R 0

R 100

R 200

R 300

R 400

R 500

R 600

R 700

R 800

R 900

0 50 100 150

NP

V

(ZA

R m

illio

ns)

Resource Size m3 (millions)

Rockwell Diamonds Inc Capital Development (Bubble Size = Capital Requirement)

Niewejaarskraal

Projected production based on mine plans in November 2010 preliminary assessments (Tirisano,

Wouterspan and Niewejaarskraal) and prefeasibility study (Saxendrift). Refer to Saxendrift resource

statement on www.rockwell diamonds.com.


STRONG FUNDAMENTALS FOR DIAMOND SECTOR

• Diamond DEMAND in carats forecast to grow at 6% p.a. to 2020

– OUTPACING annual SUPPLY growth of 2.8%

– CHINESE and INDIAN MIDDLE CLASS to double by 2020

• ECONOMIC UNCERTAINTY currently impacting sentiment in diamond market

– Industry OVERSTOCKED with expensive rough diamonds

– Resulting in pricing slowdown, especially for smaller stones

• Growing SCARCITY of +2CT diamonds

– Globally: Currently represents 5% of diamond PRODUCTION and 50%

of sales VALUE for producers

28

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Saxendrift Klipdam Tirisano

% of carats exceeding 2 cts

% of revenue exceeding 2cts

ROCKWELL PRODUCTION PROFILE BIASED

TOWARDS LARGE STONES

• ROCKWELL PRICING against current market

– SMALLER STONES: Reduction of ±20%

– >2 CARATS : Stable pricing

– LARGE SPECIALS: Strong demand


PRIORITIES AND OUTLOOK: FISCAL 2013

• KLIPDAM: Achieve volume targets and improve lower

unit costs under leadership of new Mine Manager

• SAXENDRIFT: Optimize mine plan + continue optimizing

in field screen

• TIRISANO: Ramp up to full production + complete wet

front end + improve availability of earthmoving fleet

• BEE: Complete process to introduce new partner and

secure funding

• CORPORATE: Deploy bulk X-ray technology at

Saxendrift for bulk sampling and other projects

• GROWTH: Planning and feasibility of Wouterspan using

new technology blueprint

29

• INCREASING DEMAND from China and India and

reducing supply

• Prices and demand expected to continue

INCREASING

• Rockwell’s BALANCE SHEET provides working

capital for short to medium term plans

• Ongoing review of potential corporate actions for

GROWTH

• Continue adding value through BENEFICIATION joint

venture with Steinmetz

• Deliver on OPERATIONAL PRIORITIES to start

seeing financial benefits

PRIORITIES: CEMENT TURNAROUND PROGRESS OUTLOOK: POSITIVE LONG TERM FUNDAMENTAL


FORWARD LOOKING STATEMENTS Except for statements of historical fact, this presentation release contains certain "forward-looking information" within the meaning of applicable securities law. Forward-

looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or

statements that certain events or conditions "may" or "will" occur. Although the Company believes the expectations expressed in such forward-looking statements are

based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the

forward-looking statements.

Factors that could cause actual results to differ materially from those in forward-looking statements include uncertainties and costs related to exploration and

development activities, such as those related to determining whether mineral resources exist on a property; uncertainties related to expected production rates, timing of

production and cash and total costs of production and milling; uncertainties related to the ability to obtain necessary licenses, permits, electricity, surface rights and title

for development projects; operating and technical difficulties in connection with mining development activities; uncertainties related to the accuracy of our mineral

resource estimates and our estimates of future production and future cash and total costs of production and diminishing quantities or grades if mineral resources;

uncertainties related to unexpected judicial or regulatory procedures or changes in, and the effects of, the laws, regulations and government policies affecting our mining

operations; changes in general economic conditions, the financial markets and the demand and market price for mineral commodities such and diesel fuel, steel,

concrete, electricity, and other forms of energy, mining equipment, and fluctuations in exchange rates, particularly with respect to the value of the US dollar, Canadian

dollar and South African Rand; changes in accounting policies and methods that we use to report our financial condition, including uncertainties associated with critical

accounting assumptions and estimates; environmental issues and liabilities associated with mining and processing; geopolitical uncertainty and political and economic

instability in countries in which we operate; and labour strikes, work stoppages, or other interruptions to, or difficulties in, the employment of labour in markets in which we

operate our mines, or environmental hazards, industrial accidents or other events or occurrences, including third party interference that interrupt operation of our mines or

development projects.

For further information on Rockwell, Investors should review Rockwell's annual Form 20-F filing with the United States Securities and Exchange Commission

www.sec.com and the Company's home jurisdiction filings that are available at www.sedar.com.

This presentation also uses the terms 'indicated resources' and 'inferred resources'. Rockwell Diamonds Inc. advises investors that although these terms are recognized

and required by Canadian regulations (under National Instrument 43-101 Standards of Disclosure for Mineral Projects), the U.S. Securities and Exchange Commission

does not recognize them. Investors are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted into reserves. In

addition, 'inferred resources' have a great amount of uncertainty as to their existence, and economic and legal feasibility. It cannot be assumed that all or any part of an

Inferred Mineral Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility

or pre-feasibility studies, or economic studies except for Preliminary Assessment as defined under 43-101. Investors are cautioned not to assume that part or all of an

inferred resource exists, or is economically or legally mineable.

The securities of Rockwell being offered have not been, nor will be, registered under the U.S. Securities Act and may not be offered or sold within the United States or to,

or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from U.S. registration requirements. This information does not constitute

an offer or sale of securities in the United States. Prior to making any investment decision, investors should consult a professional advisor.

30

http://www.sec.com/

http://www.sedar.com/

ADDITIONAL INFORMATION


SUSTAINABLE DEVELOPMENT

• Supporting LOCAL ECONOMIC DEVELOPMENT

– LOCAL BENEFICIATION: 85% of diamonds in South Africa

– Provided STARTUP CAPITAL and mentorship for construction and brickmaking factory

• SAFETY: Committed to providing safe working environment

– ONE MILLION LTI FREE hour record at Saxendrift

• Employment: 683 full time employees

– Total of 79 new jobs created with conversion to CONTOPS in Northern Cape

• Corporate Social Investment

– Supporting LOCAL ORGANIZATIONS focused on under privileged children, education

and feeding schemes for elderly

• Managing ENVIRONMENTAL impact: REHABILITATION as

land is mined

32


INDEPENDENT VALUATION1: CONFIRMED VALUATION GAP

33

1. The valuation, dated February 28, 2011, conducted by Jennifer Lucas, MBA, CBV, ASA,

of Evans & Evans Inc.

1. Valuation of 74% of mine

2. Discount rates:

Wouterspan, Tirisano and Niewejaarskraal: 25.36% to 28.96%

Klipdam, Holpan and Saxendraft: 22.36% to 24.96%

4. Adjustments to balance sheet of Rockwell to evaluate fair value of net assets at

February 28, 2011

Adjusted book value method

using discounted cashflow

Operation Value range

Fai

r M

arke

t V

alue

2

Wouterspan3 $47.4m - $54.8m

Tirisano3 $17.6m - $20.0m

Klipdam3 $3.6m

Holpan3 $281,000

Niewejaarskraal3 $37.4m - $42.5m

Saxendrift3 $15.5m - $16.1m

Resource properties $121.9m - $137.3m

Adjusted book value4 $149.5m - $165.0m

Valuation method

Midpoint of fair

market value

($m)

Weighting Value

($m) Weighting

Value

($m)

Trading price

method5 25.28 40% 10.11 40% 10.1

Guideline public

company method6 15.80 30% 4.74 25% 3.95

Adjusted book

value method 157.25 30% 47.18 35% 55.04

Total 62.00 69.10

5. Valuation using average trading price of Rockwell for the

10 and 90 days preceding the valuation date

6. A guideline public company method comparing Rockwell’s

average dollar value per enterprise

value of reserves and resources to eight peer group

companies

progress update on - hdgold.comprogress update on strategy and future plans ... high net worth...

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