Rockwell Diamonds released a preliminary quarterly summary and reported $7.05 million was generated from the sale of 3,223 carats during its second-fiscal quarter, which closed August 31, 2011. One year ago, Rockwell reported that its second-fiscal quarter revenue was $9.8 million. Rockwell will release its full quarterly statement on October 17.

During this cycle, Rockwell stated that production was disappointing in June and July, however, production figures were stronger for August. Rockwell recovered 373 carats at the Saxendrift mine on August 2, which was a daily record at the mine. In terms of the largest diamonds recovered, Klipdam produced 14 stones that exceeded 10 carats and Saxendrift produced 32 stones weighing more than 10 carats of which 11 stones exceeded 20 carats.

During the quarter, high-quality stones sold through the beneficiation joint venture with Steinmetz Diamond Group, included a 128.67 carat sawable, fancy yellow, high clarity stone; a 21.52 carat gem-quality, clean, D/E stone; a 33.51 carat octahedral, clean, H/I stone and a 179.95 carat makeable, clean brown stone.

In its preliminary summary statement, Rockwell Diamonds noted that although rough diamond prices remained strong during the quarter the diamond market was impacted by uncertainty in the financial markets. During June and July 2011, prices for both rough and polished diamonds increased, as higher pricing in the downstream industry was led by speculative activity, according to Rockwell. Producers followed suit, with rough prices achieving record levels at the end of July. Polished prices continued to rise, but the pace remained slower than for rough diamonds, resulting in the continued disconnect between the cost of rough diamonds and polished prices.

As global financial markets corrected in August, diamond traders were left holding expensive inventory in uncertain markets. By the end of August, prices had corrected but were expected to stabilize following the Hong Kong show and the De Beers sight this week.

James Campbell, Rockwell's chief executive, said, ''We are pleased that the high-quality of our current production has supported higher selling prices. While the underlying diamond market has increased by some 25 percent per carat for diamonds such as those typically produced by Rockwell in the past 12 months, our average price for the quarter has more than doubled. This is a clear demonstration that the diamonds which we have presented for sale are of a superior quality and in high demand."

"At the end of August, Rockwell focused its sales on larger diamonds through our beneficiation joint venture, which benefits from Steinmetz's ability to manufacture to achieve value of polished product,'' he said. ''We had been anticipating the short term price consolidation that has occurred in August 2011. Our products were not sold at a discount to drive sales.

"We produced 46 stones exceeding 10 carats from our two operational mines, which included 11 rough stones weighing more than 20 carats. This is an indication that our diamond value management focus, which prioritizes the production of quality tons, is starting to payoff,'' Campbell concluded.