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1 February 2014 | AN UNIQUE INVESTMENT PROPOSITION: SEVEN COMPELLING REASONS TO INVEST FEBRUARY 2014

Rockwell Diamonds Mining Indaba 2014 presentation

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Page 1: Rockwell Diamonds Mining Indaba 2014 presentation

1 February 2014 |

AN UNIQUE INVESTMENT

PROPOSITION: SEVEN

COMPELLING REASONS TO INVEST FEBRUARY 2014

Page 2: Rockwell Diamonds Mining Indaba 2014 presentation

2 February 2014 |

WHAT ROCKWELL DOES BEST: PRODUCE HIGH VALUE GEM QUALITY DIAMONDS

152cts: Niewejaarskraal

(2007)

116cts: SHC Plant / Saxendrift Ext. Gravels

(Aug. ‘13)

10.3cts; 37.8cts; 13.6cts: SHC Plant /

Saxendrift Ext. Gravels (Aug. ‘13)

138cts; 169cts; 126cts: SHC/ Saxendrift

Extension (Sep. ‘13)

145cts: Old Saxendrift Tailings

(Oct. ‘12)

70cts: Saxendrift Ext.(Aug. ‘12) 29.1cts; 18.4cts: Niewejaarskraal (Aug.

‘13)

36cts: Saxendrift (Mar. ‘13)

152cts: Niewejaarskraal

(2007)

116cts: SHC Plant / Saxendrift Ext. Gravels

(Aug. ‘13)

10.3cts; 37.8cts; 13.6cts: SHC Plant /

Saxendrift Ext. Gravels (Aug. ‘13)

138cts; 169cts; 126cts: SHC/ Saxendrift

Extension (Sep. ‘13)

145cts: Old Saxendrift Tailings

(Oct. ‘12)

70cts: Saxendrift Ext.(Aug. ‘12) 29.1cts; 18.4cts: Niewejaarskraal (Aug.

‘13)

36cts: Saxendrift (Mar. ‘13) 287cts: Saxendrift Ext.

(Nov. ‘12)

Page 3: Rockwell Diamonds Mining Indaba 2014 presentation

3 February 2014 |

STOP PRESS!!

FIVE +100-CT POLISHED DIAMONDS PRODUCED WORLDWIDE IN 2013

TWO WERE ROCKWELL DIAMONDS

287-carat commercial colour (tinted white), makeable;

Saxendrift Extension, November 2013

Page 4: Rockwell Diamonds Mining Indaba 2014 presentation

4 February 2014 |

AGENDA

OUR UNIQUE INVESTMENT PROPOSITION

1. PEOPLE

2. PRODUCT

3. PROPERTIES

4. PRODUCTION

5. PARTNERSHIPS

6. POTENTIAL

7. PROSPECTS

CONCLUSION

Four +100 carat rough diamonds recovered by Rockwell:

Middle Orange, August/September 2013

Page 5: Rockwell Diamonds Mining Indaba 2014 presentation

5 February 2014 |

1. PEOPLE:

EXPERIENCED LEADERSHIP

Board of Directors:

Dr Mark Bristow (Chairman)

Stephen Dietrich

Willem Jacobs

Richard Linnell

Richard Menell

Johan van’t Hof

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 Mineral

Resource Manager

Glenn Norton, BSc (Hons)

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 various 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 Mhlontlo, Nat Dip (HR Management

& Development)

Extensive HR & Industrial Relations

management experience including

organizational and structural design

initiatives as well as strategy

development and implementation. Expert in economic diamond metallurgy,

contracted to Rockwell.

Dr Kurt Petersen,

Ph.D. (Stellenbosch)

Page 6: Rockwell Diamonds Mining Indaba 2014 presentation

6 February 2014 |

2. PRODUCT:

ROCKWELL ROUGH DIAMOND PRODUCTION: AVERAGE US$/CARAT

6

# Rough stone average sizes

* Before increasing the bottom cut off to 5mm

$100/carat <0.3 c/stone #

$2,432/carat ~2.5 c/stone #

World Diamond Average

$726/carat ~0.9 c/stone #

Tirisano (North West Province, RSA)

Saxendrift* / Saxendrift Hill Complex / 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

High-end luxury jewellery

High Net Worth Individuals

Investment Stones

Page 7: Rockwell Diamonds Mining Indaba 2014 presentation

7 February 2014 |

3. PROPERTIES:

ROCKWELL OPERATIONS AND PROJECT LOCALITIES

Page 8: Rockwell Diamonds Mining Indaba 2014 presentation

8 February 2014 |

4. PRODUCTION:

CURRENT OPERATIONS + DEVELOPMENT OPPORTUNITIES

STATUS OPERATION GRADE* (carats

/ 100m3)

PROCESSING

RATE

(m3/month)

CARAT

VALUE

(US$)

LIFE OF MINE

(YEARS)**

IN PRODUCTION SAXENDRIFT +

SAXENDRIFT EXT. 0.40

160,000

(Pan plant) 2,432

Saxendrift: 3

Saxendrift Ext.:

5

RAMP UP

COMPLETE

SAXENDRIFT HILL

COMPLEX 0.41

100,000

(BV plant) 2,432 >2

IN PRODUCTION

RAMP UP

NIEWEJAARSKRAAL:

NEW PLANT COMPLETED 0.63

100,000

(DMS plant) 2,432 >10 years

EVALUATION WOUTERSPAN:

PEA COMPLETED 0.64 350,000 2,432 >10 years

ZWEMKUIL &

SURROUNDING FARMS >50,000

Exploration

Target: +80m3

ROYALTY MINING

TIRISANO:

5x ROYALTY MINING

CONTRACTS

2.37 150,000 within

six months 726 18

* Refer to Appendix A for detailed technical information

** LOM based on NI43-101 report, excludes any future exploration potential

Page 9: Rockwell Diamonds Mining Indaba 2014 presentation

9 February 2014 |

ROUGH

77 ct makeable,

Saxendrift Extension

(2012)

145 ct makeable, old

Saxendrift tailings

(2012)

105 ct Type II A, Middle

Orange

(2009)

169 ct yellow,

Saxendrift Hill Complex

(2013)

128 ct yellow, Middle

Orange

(2011)

POLISHED

37 ct J color round

brilliant, VS2

30 ct stone being

polished. Additional

pieces to be polished

35 ct D color internally

flawless

Sold for $230,000/ct

109 ct vivid yellow

81 ct vivid yellow

BENEFI-

CIATION

VALUE ADD

+34% on initial rough

sale price

Currently being

polished

+62% on initial rough

sale price Not yet sold Not yet sold

5. PARTNERSHIPS:

BENEFICIATION JOINT VENTURE WITH SIGNIFICANT VALUE ADD

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

• Additional revenue channel: Market related prices for diamonds sold into JV + 50% profit share

Page 10: Rockwell Diamonds Mining Indaba 2014 presentation

10 February 2014 |

6. POTENTIAL:

GROWTH PLAN TO ACHIEVE CRITICAL MASS AND SCALE

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

10.00

-

20,000

40,000

60,000

80,000

100,000

120,000

FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023

Vo

lum

e p

.a. (

mill

ion

m3 )

To

tal c

arat

s p

.a.

Production targets

Royalty Mining: Zwemkuil Royalty Mining: Tirisano Wouterspan

Niewejaarskraal Saxendrift Hill Complex Saxendrift

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

CATEGORY PROBABLE RESERVES INDICATED RESERVES INFERRED RESOURCES TOTAL

VOLUME (M3) JULY 1, 2013 6,921,600 39,753,100 75,393,000

CARATS 27,686 678,588 741,387 1,447,661

VALUE (US$) MILLION 66 625 1,146 1,837

Implementation of organic strategy to process 500,000m3 of quality gravels per month from

multiple faces in Middle Orange to improve quarterly earnings visibility

Page 11: Rockwell Diamonds Mining Indaba 2014 presentation

11 February 2014 |

7. PROSPECTS:

POSITIVE FUNDAMENTALS FOR DIAMOND SECTOR

• Rough demand: Expected to grow between

4.2% and 5.1% p.a. until 2023 (Bain & Co.)

• Rough and polished demand: Expected to

correlate long-term

• Clear long-term trend: Increasing demand

• Short term deviations from trend line

anticipated: Both up and down

0

5

10

15

20

25

30

35

40

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

F20

14F

2015

F

2016

F

2017

F

2018

F

2019

F20

20F

2021

F

2022

F

2023

F

Polished diamond demand:Value of the diamond contentin the jewellery retail sales

Rough diamond demand (Bain& Co. base case)

Rough diamond demand (Bain& Co. lower case)

Trendline for the polisheddemand based on 2003-2012data

CAGR (2003-12): 4.8%

CAGR (2012-23): 5.1%

CAGR (2012-23): 4.2%

Source: DMM Advisory Group Analysis, IDEX, Tacy, Bain & Co.

Positive Long Term Fundamentals: Polished and rough diamond demand

(actual and forecast) ($bn)

Deviation from

the long term

trend

Polished

demand

Rough

demand

195-205 230-240 320-330

470-480

610-620

855-895

980-990 1,010-1,020

365-375 315-325

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

World diamond exploration spend

($m)

Source: NBF Research; Metals Economic Group

CAGR

26%

CAGR -

64%

Page 12: Rockwell Diamonds Mining Indaba 2014 presentation

12 February 2014 |

CONCLUSION:

OUR UNIQUE POSITIONING

•Experienced leadership team with ≈100yrs diamond experience + engaged board of directors 1. PEOPLE

•Produced five large, high value diamonds in Middle Orange since September 2013

•Average value in Q3 of $2,198/carat (MOR) versus global average of ≈US$100/carat

2. PRODUCT

•More than 1.5m carats in situ valued at $2.1bn 3. PROPERTIES

•Three producing mines in Middle Orange with monthly capacity of 360,000m3 /month

•On track to achieve mid-term target of 500,000m3 /month to improve quarterly earnings visibility

4. PRODUCTION

•Beneficiation partnership with Steinmetz (+10 carat stones): 50 profit share in sale of polished diamonds

•Supportive shareholder base

5. PARTNERSHIPS

• Improving performance due to strategic turnaround programme

•Well defined strategy to focus on Middle Orange: Two new internally funded mines commissioned

6. POTENTIAL

•Positive industry fundamentals: Supply deficit forecast after 2018

•Strong demand for investment diamonds

7. PROSPECTS

Page 13: Rockwell Diamonds Mining Indaba 2014 presentation

13 February 2014 |

THANK YOU!

116 carats SHC August 2013

Page 14: Rockwell Diamonds Mining Indaba 2014 presentation

14 February 2014 |

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.

14

Page 15: Rockwell Diamonds Mining Indaba 2014 presentation

15 February 2014 |

APPENDIX A

Four +100 carats recovered in Middle Orange River in August/September 2013

Page 16: Rockwell Diamonds Mining Indaba 2014 presentation

16 February 2014 |

43-101 MINERAL RESOURCE SUMMARY: AT 1 JULY 2013