Rockwell Diamonds (TSE:RDI) (JSE:RDI) says its fiscal second quarter proved positive overall, with the company's revenue rising 71 percent year-on-year while unit operating cash costs declined 22 percent from the first quarter.
The company, which has three mines in operation in South Africa, said second quarter revenue rose to $16.9 million, comprised of $14.2 million in diamond sales and $2.7 million of beneficiation income from its joint venture with Diacore.
The results for the three months ending August 31 represent Rockwell's ninth sucessive quarter of US dollar denominated revenue growth, it said.
During the quarter, it reported record overall volume of gravel processed and carat production from all its company-owned properties. Overall volume of gravel processed rose 57 percent year-on-year, while carat production jumped 36 percent, comprising 3,764 carats from its own operations and 5,817 carats from contractors.
The diamond miner recorded a net loss of $1.5 million, compared to a first quarter net profit of $0.3 million, however, as higher revenue and lower unit costs were offset by lower beneficiation income and lower grades, which resulted in a $3.4 million inventory adjustment.
Average operating costs fell 22 percent from the first quarter to US$10.3 per cubic meter. This measure had been persistently well above the US$13.0 per cubic meter mark in the previous three quarters, Rockwell said. The drop is due to lower costs and higher volumes, after implementing its earthmoving vehicle renewal plan.
The company also said it has additional revenue potential with its beneficiation pipeline of approximately 6,000 carats.
"We are well placed for the third quarter having migrated our mining activities to higher-grade areas," said president and chief executive officer James Campbell.
"We also have a high level of confidence in our plant efficiencies, based on the results of ongoing metallurgical testwork."
Rockwell has three existing mines in operations, known as the Saxendrift, Saxendrift Hill Complex and Niewejaarskraal mines, all located in the Middle Orange River region of South Africa. Its operations at the Tirisano mine are on care and maintenance status.
Net cash flow during the second quarter, a key metric indicative of a miner's ability to fund future operations, came to $2.1 million.
Shares of dual-listed Rockwell closed at 32 cents on Thursday in Toronto, down almost 10 percent year-to-date.