Rockwell Diamonds has signed an agreement to acquire certain alluvial diamond properties as well as associated plant and equipment from Bondeo 140 CC and its affiliates, in a transaction worth C$28.5m ($24m).

Said to be contiguous to Rockwell’s existing properties, the assets will increase the company’s operating and resource base and its growth in the Middle Orange River region of South Africa.

The total acquisition consideration payable on the closing date consists of C$12m ($10m) for the mineral rights and three fit-for-purpose processing plants.

Allocated to earthmoving fleet and associated equipment, the remaining C$16.5m ($14m) is made up of C$3.9m ($3.31m) to be paid to the sellers in equal installments over a period of ten months.

According to Rockwell, the balance relates to equipment leases as well as hire purchases and will be refinanced on similar terms with South African financial institutions, or existing mobile fleet and equipment supply partners.

"These new assets offer economies of scale, with the potential to reduce the volatility of our quarterly production results."

Rockwell expects closure to take place in the second quarter of 2015.

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Rockwell Diamonds CEO and president James Campbell said: "Our executive and operational management have demonstrated their alluvial diamond production expertise during Rockwell’s corporate turnaround and have the capacity to take on these additional assets.

"We know the geology of the area. So these new assets offer economies of scale, with the potential to reduce the volatility of our quarterly production results and take us above our target of processing 500,000m³ per month."

The transaction is subject to conditions precedent, including customary regulatory approvals.

Image: Rockwell to acquire alluvial diamond properties from Bondeo 140 CC. Photo: courtesy of tigger11th/ FreeDigitalPhotos.net.