News Update

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On December 21, 2009: News Update on Rockwell Diamonds Inc. of Vancouver, BC, diamonds operation for the period of September 1, 2009 to November 30, 2009 (third quarter fiscal 2010). The operation has won two safety awards, which also pleases the management.

Rockwell's restructuring and efficiency improvement initiatives implemented in early 2009, continues to have positive impact on the Company's mining operations at Saxendrift, Klipdam, and Wouterspan.

Wouterspan is still on care and maintenance. Improvements are expected to continue from ongoing re-engineering initiatives at the Company's processing plants.

Recruitment of personnel with engineering skills and senior operations management provides benefit to the operating systems and processing plants. Focus on better mining efficiency, improved production and lowering of operation costs, continues to be the Company's mission.

The improved production and cost cut initiatives resulted in Rockwell's operations exceeding the averaged annual target of 2,500 carats per month from the three mines during the dry winter period from June to September 2009. The Company was achieving the similar production previously from four mines.

Cash operating costs have remained below the target range of US$3--$3.50 per tonne, despite the extremely strong South African Rand relative to the US dollar. Rockwell has consistently maintained its cash operating costs at the bottom end of its targeted range.

The mine in Saxendrift has shown encouragingly low (less than US $3 per tonne) operating costs. The Company's production teams are working to ensure that similar results can be achieved at its other operations.

The News Update for the diamond industry as of December 10, 2009, is as follows: Due to the recession many buyers have been waiting for the price to bottom out in order to buy a big diamond. They were told by experts that the prices were at the bottom and they can expect to see polished diamond prices moving up shortly.

The CEO of Harry Winston Diamonds, Robert Gannicott noted that rough diamond prices improved by at least 61% from the prices at the lowest part of the market, during the first quarter of this year, 2009. In addition to its high-end jewelry stores, Harry Winston own part of the Diavik diamond mine in Canada's Northwest Territories.

Rough Diamond prices dramatically increased by the end of the quarter in October 2009, but, this price increased of 9% is still lower than in the same period last year and 13% below the highs in the summer of 2008.

The fact that polish diamond prices have been flat for most of this year, the diamond mines have been closed since the beginning of 2009. This allowed sales of the excess rough and polished diamonds in the pipeline, continue until demand and supply were aligned.

On the upswing is the demand for polished diamonds in India, the Far East and the holiday season is in full swing in the US. The cutters are back in operation and the mines have been producing for months. Demand for rough and polished diamonds is expected to match and exceed supply, implying that the prices will be moving up in the months ahead.

News Update from Hong Kong, December 5, 2009: A beautiful vivid pink diamond sold on December 1, for $10.8 million. Christie's Jewels sold the rare, 5-carat Fancy Vivid Pink cushion shaped diamond ring, setting a new price-per-carat and record for selling a pink diamond at an auction. This year, colored diamonds have been making the headlines.

The diamond was set in a platinum and 18-karat rose gold mounting with a pair of matched white shield-shaped diamonds. The diamond has a pink bubblegum hue with even saturation, rarely seen in natural pink colored diamonds. The ring was designed by the famous Graff Jewelers

It is a rare type lla diamond, its rarity and beauty reflects its high price. It was purchased by a private Asian buyer. There is optimism in the Asian market for high-end, big ticket collectible goods because, China's retail market is recovering faster than American and European markets.

As of November 4, 2009 in Johannesburg...News Update on the diamond control body investigators told about the gems that were mined by virtual slaves, who had been told to dig or die.

The slaves were smuggled out by soldiers who raped and beat them, yet, sources were told by the diamond body that those gems weren't blood diamonds.

Instead of sanctioning Zimbabwe for these terrible crimes against these civilians, they are giving this country another chance to get its Marange fields under control.

On September 28, 2009: It was reported that the Hope Diamond gets a fashion make over. Currently housed in the Hall of Geology, Gems and Minerals at the National Museum of Natural History, the diamond is getting a rare fashion make over.

The Hope Diamond was displayed to the public, out of its setting, for the first time in 50 years last week. This famous gemstone has been seen by 5 million visitors to the museum a year and it has been in an ornate setting with sixteen white pear-shaped and cushion-cut diamonds suspended from a chain containing forty-five diamonds. And this is the news update for the diamond industry.

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