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ANNUAL INFORMATION FORM

FOR THE NINE MONTHSENDEDFEBRUARY 29,
2008

PREPARED AS OF MAY 20, 2008

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|ITEM 1 | TABLE OF
      CONTENTS
|------ | -----------------------

|ITEM
      1                                                   | TABLE
      OF CONTENTS                                               | 1 
|-------------------------------------------------------------- | --------------------------------------------------------------------- | --
|ITEM
      2                                                   | PRELIMINARY
      NOTES                                               | 2 
|INCORPORATION
      OF FINANCIAL STATEMENTS AND PROXY CIRCULAR | 2                                                                    
|CURRENCY
      AND METRIC EQUIVALENTS                          | 2                                                                    
|RESOURCE
      CATEGORY (CLASSIFICATIONS) USED IN THIS AIF     | 3                                                                    
|ITEM
      3                                                   | CORPORATE
      STRUCTURE                                             | 4 
|ITEM
      4                                                   | GENERAL
      DEVELOPMENT OF THE BUSINESS                             | 7 
|THREE
      YEAR HISTORY                                       | 7                                                                    
|SIGNIFICANT
      ACQUISITIONS AND SIGNIFICANT DISPOSITIONS    | 10                                                                   
|ITEM
      5                                                   | DESCRIPTION
      OF BUSINESS                                         | 11
|TABLE1: SUMMARY OFHOLPAN-KLIPDAM
      LANDHOLDINGS            | 12                                                                   
|RISK
      FACTORS                                             | 30                                                                   
|ITEM
      6                                                   | DIVIDENDS                                                             | 37
|ITEM
      7                                                   | DESCRIPTION
      OF CAPITAL STRUCTURE                                | 37
|COMMON
      SHARES                                            | 37                                                                   
|ITEM
      8                                                   | MARKET
      FOR SECURITIES                                           | 37
|ITEM
      9                                                   | ESCROWED
      SECURITIES                                             | 38
|ITEM
      10                                                  | DIRECTORS
      AND OFFICERS                                          | 38
|ITEM
      11                                                  | PROMOTERS                                                             | 44
|ITEM
      12                                                  | LEGAL
      PROCEEDINGS                                               | 45
|ITEM
      13                                                  | INTEREST
      OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS      | 45
|ITEM
      14                                                  | TRANSFER
      AGENT AND REGISTRARS                                   | 45
|ITEM
      15                                                  | MATERIAL
      CONTRACTS                                              | 45
|ITEM
      16                                                  | INTERESTS
      OF EXPERTS                                            | 46
|ITEM
      17                                                  | ADDITIONAL
      INFORMATION                                          | 46
|ITEM
      18                                                  | DISCLOSURE
      FOR COMPANIES NOT SENDING INFORMATION CIRCULARS      | 46
|ITEM
      19.                                                 | CONTROLS
      AND PROCEDURES                                         | 47
|INTERNAL
      CONTROLS OVER FINANCIAL REPORTING PROCEDURES    | 47                                                                   
|DISCLOSURE
      CONTROLS AND PROCEDURES                       | 47                                                                   
|ITEM
      20.                                                 | AUDIT
      COMMITTEE, CODE OF ETHICS, ACCOUNTANT FEES AND EXEMPTIONS | 48
|ITEM
      21.                                                 | OFF
      BALANCE SHEET ARRANGEMENTS                                  | 49
|ITEM
      22.                                                 | TABULAR
      DISCLOSURE OF CONTRACTUAL OBLIGATIONS                   | 49

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- 2 -

|ITEM 2 | PRELIMINARY
      NOTES
|------ | -----------------------

Incorporation of Financial Statements and Proxy
Circular

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|This discussion includes certain statements that may be
      deemed "forward-looking statements". All statements in this discussion,
      other than statements of historical facts, that address future production,
      reserve potential, exploration drilling, exploitation activities and
      events or developments that the Company expects are forward-looking
      statements. 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 are discussed herein and include
      market prices, exploitation and exploration successes, continued
      availability of capital and financing and general economic, market or
      business conditions. Investors are cautioned that any such statements are
      not guarantees of future performance and that actual results or
      developments may differ materially from those projected in the
      forward-looking statements.

Incorporated by reference into this annual information form
(the Annual Information Form or AIF) are the audited consolidated financial
statements and Management Discussion and Analysis for Rockwell Diamonds Inc.
(the Company or Rockwell) for the nine months ended February 29, 2008 and
fiscal year ended May 31, 2007 together with the auditors report thereon. The
financial statements are available for review on the SEDAR website located at
www.sedar.com. All financial information in
this Annual Information Form is prepared in accordance with Canadian generally
accepted accounting principles (Canadian GAAP) using Canadian dollars.

Documents incorporated by reference in this AIF include all
audited and interim financial statements, proxy circulars, news releases and
other continuous disclosure documents filed by Rockwell, copies of which are
available on request from the offices of Rockwell or on the SEDAR web site
(www.sedar.com).

Currency and Metric Equivalents

The Companys accounts are maintained in Canadian dollars and
all dollar amounts herein are expressed in Canadian dollars unless otherwise
indicated.

The following factors for converting Imperial measurements into
metric equivalents are provided:

Metric Units
    Multiply by
    Imperial Unitshectares
    2.471
    = acresmetres
    3.281
    = feetkilometres
    0.621
    = miles (5,280 feet)grams
    0.032
    = ounces (troy)tonnes
    1.102
    = tons (short) (2,000 lbs)grams/tonne
    0.029
    = ounces (troy)/ton


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In this AIF the following defined terms have the meanings set
forth below:

|Alluvial deposit | Accumulation of mineralization as a result of deposition
      in a river or stream.                                                                                                                                                                                                                                                                                                                                                                                                                           
|---------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|BEE              | Black Economic Empowerment, a strategy aimed at
      substantially increasing participation by HDP at all levels in the economy
      of South Africa. BEE is aimed at redressing the imbalances of the past
      caused by the Apartheid system in South Africa by seeking to substantially
      and equitably increase the ownership and management of South Africas
      resources by the majority of its citizens and so ensure broader and more
      meaningful participation in the economy by HDP;
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Common Shares    | The Companys common shares without par value, being the
      only class or kind of the Companys authorized capital.                                                                                                                                                                                                                                                                                                                                                                                         
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Company          | Rockwell Diamonds Inc., including its subsidiaries,
      unless the context requires otherwise.                                                                                                                                                                                                                                                                                                                                                                                                               
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|DME              | The Government of South Africa acting through its
      Department of Minerals and Energy and its successors;                                                                                                                                                                                                                                                                                                                                                                                                  
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|JSE              | JSE Limited or Johannesburg Stock Exchange, one of the
      three stock exchanges on which the Common Shares are listed.                                                                                                                                                                                                                                                                                                                                                                                      
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Mineral Deposit  | A deposit of mineralization, which may or may not be ore.                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Mineral Symbols  | Cu  copper                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|OTCBB            | Over-the-Counter Bulletin Board, where the Companys
      stock trades in the United States.                                                                                                                                                                                                                                                                                                                                                                                                                  
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Porphyry         | A type of mineral deposit in which ore minerals are
      widely disseminated, generally of low grade but large tonnage.                                                                                                                                                                                                                                                                                                                                                                                       
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|SAMREC           | South African Mineral Resource Code                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|SARB             | The Exchange Control Department of the South African
      Reserve Bank;                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|South Africa     | The Republic of South Africa;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|TSX              | The Toronto Stock Exchange, one of the three stock
      exchanges on which the Common Shares are listed.                                                                                                                                                                                                                                                                                                                                                                                                      
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|ZAR              | South African Rand, the currency of South Africa.                                                                                                                                                                                                                                                                                                                                                                                                                                                              

Resource Category (Classifications) Used in this AIF

The discussion of mineral deposit classifications in this AIF
adheres to the resource/reserve definitions and classification criteria
developed in 2000 by the Canadian Institute of Mining and Metallurgy and updated
in 2005. There are two broad categories dependent on whether the economic
viability has been

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- 4 -

established: these are namely mineral resources (economic
viability not established) and mineral reserves (viable economic production is
feasible). Resources are sub-divided into categories depending on the confidence
level of the estimate based on level of detail of sampling and geological
understanding of the deposit. The categories, from lowest confidence to highest
confidence, are inferred resource, indicated resource and measured resource.
Reserves are similarly sub-divided by order of confidence into probable (lowest)
and proven (highest). These classifications can be more particularly described
as follows:

Mineral Resource means a deposit or concentration of
natural, solid, inorganic or fossilized organic substance in such quantity and
at such greater quality that extraction of the material at a profit is currently
or potentially possible. Inferred Resource means the estimated quantity
and grade of a deposit, or a part thereof, that is determined on the basis of
limited sampling, but for which there is sufficient geological information and a
reasonable understanding of the continuity and distribution of metals values to
outline a deposit of potential economic merit. Indicated Resource means
the estimated quantity and grade of a part of a deposit for which the continuity
of grade, together with the extent and shape, are so well-established that a
reliable grade and tonnage estimate can be made. Measured Resource
means the estimated quantity and grade of that part of a deposit for which the
size, configuration and grade have been very well established by observation and
sampling of outcrops, drill holes, trenches and mine workings.

Mineral Reserve is that part of a resource which can
be mined legally and at a profit under economic conditions that are specified
and which are generally accepted as reasonable. Economic viability must be
demonstrated by at least a preliminary feasibility study based on Indicated and
Measured Resources.

Probable Reserve means the estimated quantity and
grade of that part of an Indicated Resource for which the economic viability has
been demonstrated by adequate information and engineering, operating, economic
and legal factors, at a confidence level that will allow positive decisions on
major expenditures.

Proven reserve is the estimated quantity and grade of
that part of a Measured Resource for which the size, grade and distribution of
values, together with technical and economic factors, are so well-established
that there is the highest degree of confidence in the estimate. The term should
be restricted to that part of a deposit being mined, or being developed and for
which there is a production plan.

|ITEM 3 | CORPORATE
      STRUCTURE
|------ | -------------------------

Rockwell was incorporated under the Company Act (British
Columbia) (the predecessor legislation to the Business Corporations Act(British Columbia)) on November 10, 1988 under the name "Annabel Gold Mines
Inc."

The Company changed its name to "Carissa Mining Corporation" on
January 24, 1994. On October 26, 1995, the company changed its name to "Rockwell
Ventures Inc.", consolidated its share capital on the basis of five shares to
one and subsequently increased its authorized share capital to 200,000,000
Common Shares without par value.

On December 29, 2004, Rockwell increased its authorized share
capital to consist of an unlimited number of Common Shares without par
value.

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- 5 -

At the Company's Annual and Extraordinary General Meeting held
on November 28, 2005, the Company's shareholders approved the creation of a
class of preferred shares and the consolidation of the Company's Common Shares
on a four old shares for one new basis. Regulatory approval of this capital
reorganization was received on January 27, 2006.

The Company changed its name from "Rockwell Ventures Inc" on
May 16, 2007 to "Rockwell Diamonds Inc."

Rockwell is based in British Columbia, Canada. As at May 20,
2008, Rockwell had the following subsidiaries:

| | a) | Minera Ricardo Resources Inc. S.A. (Ricardo), an
      exploration-stage company organized pursuant to the laws of Chile, of
      which the Company owns a direct 99.9% partnership interest; Rockwell holds
      its interest in the Ricardo Property in Chile through Minera Ricardo
      Resources Inc. S.A.                                                                                                                                                                      
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | b) | 549949 BC Ltd., a wholly owned subsidiary incorporated
      under the laws of British Columbia which holds a 0.1% partnership interest
      in Minera Ricardo Resources Inc. S.A.                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | c) | N9C, a wholly owned subsidiary incorporated under the
      laws of the Cayman Islands of which Rockwell owns a direct 100%
      interest                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | d) | N10C, a wholly owned subsidiary incorporated under the
      laws of the Cayman Islands of which N9C owns a direct 100%
  interest                                                                                                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | e) | Rockwell Resources RSA (Pty) Ltd, a wholly owned
      subsidiary incorporated under the laws of South Africa of which N10C owns
      a direct 100% interest                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | f) | Durnpike Investments (Pty) Ltd (Durnpike) a wholly
      owned subsidiary incorporated under the laws of South Africa of which
      Rockwell Resources RSA owns a direct 100% interest. Durnpike holds a 51%
      interest in both HC Van Wyk Diamonds Ltd and Klipdam Mining Company
      Ltd.                                                                                                                                                                                      
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | g) | HC Van Wyk Diamonds Ltd (“HCVW”) is a subsidiary incorporated under the laws of South Africa of which Durnpike owns a direct 51% interest and Rockwell Diamond Inc. owns an additional 34% since March 2008 increasing the Company ownership to 85% of the Van Wyk Diamond Group (“VWDG”) assets HC Van Wyk Diamonds Ltd is a diamond producer that conducts diamond exploration and mining on the Holpan/Klipdam property, as well as mining on the Wouterspan and Makoenskloof property.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | h) | Klipdam Mining Company Ltd. is a subsidiary incorporated
      under the laws of South Africa of which Durnpike owns a direct 51%
      interest and Rockwell Diamond Inc. owns an additional 34% since March 2008
      increasing the Company ownership to 85% of the Van Wyk Diamond Group
      assets. Klipdam Mining Company Ltd is a diamond producer that conducts
      diamond exploration and mining on the Klipdam property.                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | i) | Virgilia Investments Inc. a wholly owned subsidiary
      incorporated under the laws of the British Virgin Islands of which
      Rockwell owns a direct 100% interest.                                                                                                                                                                                                                                                                                                                  

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| | j) | Galputs Minerale (Pty) Ltd. a wholly owned subsidiary
      incorporated under the laws of South Africa of which Virgilia Investments
      Inc. owns a direct 100% interest. Galputs Minerale holds mining rights to
      the Galputs Project.                                                                                                                                                                                                                                                         
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | k) | Saxendrift Mine (Pty) Ltd. a wholly owned subsidiary
      incorporated under the laws of the South Africa of which Rockwell
      Resources RSA (Pty) Ltd., in April 2008, acquired a 100% interest.
      Saxendrift Mine (Pty) Ltd. Saxendrift Mine (Pty) Ltd. is a diamond
      producer that conducts diamond exploration and mining on the Saxendrift
      and Niewejaarskraal properties and holds mining rights to the Kwartelspan,
      Zwemkuil-Mooidraai and Remhoogte-Holsloot
properties.

Immediately after the completion of the Durnpike Acquisition,
the organization structure of Rockwell changed to:



The head office of Rockwell is located at Suite 1020, 800 West
Pender Street, Vancouver, British Columbia, Canada V6C 2V6, telephone (604)
684-6365, facsimile (604) 684-8092. The Companys legal registered office is in
care of its Canadian attorneys Lang Michener LLP, Barristers & Solicitors,
at Suite 1500, 1055 West Georgia Street, Vancouver, British Columbia, Canada V6E
4N7, telephone (604) 689-9111, facsimile (604) 685-7084. The South African head
office of the Company is located at Level 0, Wilds View, Isle of Haughton, Cnr.
Carse OGowrie and Boundary Road, Houghton Estate, Johannesburg 2198, telephone
27 (11) 481-7250, facsimile 27 (11) 481-7247.

In this Annual Information Form, the terms Company or
Rockwell refer to Rockwell Diamonds Inc. and all its subsidiaries together
unless the context otherwise clearly requires. Certain terms used herein are
defined in the glossary of this Annual Information Form.

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|ITEM 4 | GENERAL DEVELOPMENT OF
      THE BUSINESS
|------ | -----------------------------------------

Three Year History

The consolidated financial statements have been prepared in
accordance with Canadian generally accepted accounting principles (GAAP), and
are expressed in Canadian dollars. The financial statements are available for
review on the SEDAR website located at www.sedar.com.

Overview of Operations

The principal events in the development of Rockwell's business
are:

| | (i)   | In June 2006, Rockwell entered into an agreement to
      acquire (the "Durnpike Acquisition") all of the shares and loans in
      Durnpike Investments (Pty) Limited ("Durnpike"), a private South African
      company, from eight arm's length individuals (the "Vendors"), for
      consideration paid in the common shares of Rockwell ("Common Shares").
      Durnpike held an interest and/or rights in four alluvial diamond
      properties in South Africa and the Democratic Republic of the Congo. These
      were:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |       | On January 31, 2007, all the
      conditions precedent to implementation of the Durnpike Acquisition were
      fulfilled. The Company also received the necessary regulatory approvals in
      Canada and South Africa.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (ii)  | In conjunction with the Durnpike Acquisition, HCVW had an
        option agreement to acquire the Makoenskloof alluvial diamond project. As
        a result of the acquisition of HCVW by Durnpike, and concurrent
        acquisition of Durnpike by Rockwell, the Company assumed the option to
    purchase the Makoenskloof property.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (iii) | On March 6, 2007, the Company and Trans Hex Group Limited
        (Trans Hex) entered into a conditional agreement whereby the Companys
        wholly owned South African subsidiary, Rockwell Resources RSA (Pty) Ltd.
        (Rockwell RSA), would acquire two open pit alluvial diamond mines and
        three alluvial diamond exploration projects from Trans Hex (the
        Transaction). Trans Hex, through its wholly-owned subsidiary, Trans Hex
        Operations (Pty) Ltd. (THO), is the owner of two open pit alluvial
        diamond mines, namely Saxendrift and Niewejaarskraal, and three alluvial
        diamond exploration projects, namely Kwartelspan, Zwemkuil-Mooidraai and
        Remhoogte-Holsloot, which are located along the southern bank of the
        Middle Orange River between Douglas and Prieska in the Northern Cape
        Province of South Africa (Northern Cape) and which are collectively
        referred to as the Middle Orange River Operations and Projects (or
        MORO). The acquisition was completed subsequent to year end on April 11,
    2008.

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- 8 -

| | (iv) | During fiscal 2008, the Company received 51% of the
      revenues from production and sales of alluvial diamonds on the
      Holpan/Klipdam and Wouterspan properties and from sale of diamonds
      recovered from bulk sampling on the Makoenskloof property.                                                                                                                                                                                           
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (v)  | The final conditions of the Durnpike Acquisition were
      completed in March 2008. As of March 2008, the Company has received 74% of
      the revenue from the operating properties acquired under the Durnpike
      Acquisition.                                                                                                                                                                                                                        
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (vi) | During the year ended May 31, 2007, a BEE group purchased 15% of the VWDG from the Van Wyk Trust for an amount of ZAR 22.5 million ($3.4 million). Subsequent to the nine months ending February 29, 2008, the BEE group is in the process of increasing its shareholding from 15% to 26% by subscribing for an additional 11% shares in the VWDG. The BEE company is African Vanguard Resources (Pty) Ltd., the holding company of Richtrau No 136 (Pty) Ltd

Mining in the Republic of South Africa

South Africa has recently undergone major constitutional
changes to effect majority rule, and also to effect mineral title. Accordingly,
many laws may be considered relatively new, resulting in risks such as possible
misinterpretation of new laws, modification of mining or exploration rights,
operating restrictions, increased taxes, environmental regulation, mine safety
and other risks arising out of a new sovereignty over mining, any or all of
which could have an adverse impact upon Rockwell. Rockwell's operations may also
be affected in varying degrees by political and economic instability, terrorism,
crime, extreme fluctuations in currency exchange rates and inflation.

Changes, if any, in mining or investment policies or shifts in
political attitude in South Africa may adversely affect Rockwell's operations or
likelihood of future profitability. Operations may be affected in varying
degrees by government regulations with respect to, but not limited to,
restrictions on production, price controls, export controls, currency
remittance, income taxes, expropriation of property, foreign investment,
maintenance of claims, environmental legislation, land use, land claims of local
people, water use and mine safety.

The political situation in South Africa introduces a certain
degree of risk with respect to Rockwell's activities. The Government of South
Africa exercises control over such matters as exploration and mining licensing,
permitting, exporting and taxation, which may adversely impact on Rockwell's
ability to carry out exploration, development and mining activities. Failure to
comply strictly with applicable laws, regulations and local practices relating
to mineral right applications and tenure could result in loss, reduction or
expropriation of entitlements or in the imposition of additional local or
foreign parties as joint venture partners with existing or other interests.

Government Regulation

The exploration and mining activities of Rockwell are subject
to various South African national, provincial and local laws governing
prospecting, development, production, taxes, labour standards and occupational
health, mine safety, toxic substance and other matters. Exploration activities
and mining are also subject to various national, provincial and local laws and
regulations relating to the protection of the environment. These laws mandate,
among other things, the maintenance of certain air and water quality standards,
and land reclamation. These laws also set forth limitations on the generation,
transportation, storage and disposal of solid and hazardous waste. Although
Rockwell's activities are currently carried out in accordance with all
applicable rules and regulations, to the best of its knowledge and belief no
assurance can be given that new rules and regulations will not be enacted or
that existing rules and regulations will not be applied in a manner which could
limit or curtail production or development. Amendments to current laws and
regulations governing operations and activities of exploration, mining and
milling or more stringent implementation thereof could have a material adverse
effect on Rockwell's business, results of operation and financial condition.

In October 2006, the Government of South Africa released the
Mineral and Petroleum Resources Royalty Bill 2006(the "Royalty Bill")
and the Diamond Export Levy Bill 2006(the "Export Levy Bill"). The

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- 9 -

Royalty Bill proposes, among other things, that companies
extracting diamonds pay a royalty of 5% from the sales of those metals, payable
on gross revenue. The Export Levy Bill contemplates an additional 5% levy on any
rough diamonds that are cleared for export under the South African Diamonds
Act, based on the value of such diamonds established or assessed under that
Act. If enacted, the Royalty Bill and the Export Levy Bill may reduce the
viability of diamond projects undertaken by the Company in South Africa. The
Bills are presently under discussion and comment.

The mining industry in South Africa, where the Company's
projects are located, is subject to extensive regulation. The regulatory
environment is developing, lacks clarity in a number of areas and is subject to
interpretation, review and amendment as the mining industry is further developed
and liberalized. In addition, the regulatory process entails a public comment
process, which makes the outcome of legislation and regulatory controls
uncertain and may cause delays in the regulatory process. A number of
significant matters have not been finalized, including the Royalty Bill
as well as legislation dealing with beneficiation. Rockwell cannot predict the
outcome or timing of any amendments or modifications to applicable regulations
or the interpretation thereof, the release of new regulations or their impact on
its business.

In order to address inequalities to Historically Disadvantaged
Persons ("HDP") engendered by South Africa's former apartheid system, the South
African government has initiated certain government empowerment initiatives (See
discussion in Risk Factors).

Mining in the Democratic Republic of the
Congo

The renewed interest by the international mining industry in
the DRC has been as a result of the 2003 implementation of the new DRC Mining
Code, which was drafted in consultation with the World Bank.

The Mining Code provides the prospecting permit holder with
broad access to explore its properties under a transparent and efficient permit
process. In the case of diamond exploration, the new Mining Code gives the
prospecting permit holder exclusive rights for a period of four years, renewable
for two additional two-year periods. Upon development of an economically viable
deposit, the holder can apply for a mining permit.

The Congo Mining Code states that an Exploitation License is a
real property, exclusive, conveyable and transferable right which can be leased,
in accordance with the provisions of the present Code, the surface rights
therefore form an integral part of the mining rights. The Code identifies that
any applicant for an Exploitation License must submit an environmental impact
study (EIS) together with an environmental management plan for the project
(EMPP), and obtain the approval for the EIS and EMPP, as well as implement the
EMPP.

The Exploitation License entitles its holder to the exclusive
right to carry out, within the perimeter over which it has been granted, and
during its term of validity, exploration, development, construction and
exploitation works in connection with the mineral(s) for which the license has
been granted. In addition, it entitles the license holder, without restriction,
to:

- enter the Exploitation License area to conduct mining operations;
- build the installations and infrastructures required for mining
  exploitation;
- use the water and wood within the Exploitation License perimeter for the
  requirements of the mining, complying with the requirements set forth in the
  EIS and the EMPP;

---

- 10 -

- use, transport and freely sell his products originating from within the
  exploitation perimeter;
- proceed with concentration, metallurgical or technical treatment
  operations, as well as the transformation of the mineral substances extracted
  from the deposit within the exploitation perimeter; and
- proceed to carry out works to extend the mine.

As long as a perimeter is covered by an Exploitation License,
no other application for a mining or quarry right for all or part of the same
perimeter can be processed. However, an applicant to whom the holder of the
exploitation license has refused to provide his consent to open a quarry within
the perimeter may submit an application for quarry exploitation license over
part of the perimeter which is the subject of the exploitation license but which
is not being used for the mining operations. Failing that, the application is
processed and is the subject of an administrative litigation process in which
the holder and the applicant participate if the latter submits, together with
his application, evidence that the holder has refused to give his consent and is
acting in bad faith. The mining regulations set forth the basic and substantive
rules for this administrative litigation process.

Significant Acquisitions  Middle Orange River
Operations

On March 6, 2007, the Company and Trans Hex entered into a
conditional agreement whereby Rockwell RSA would acquire two open pit alluvial
diamond mines, namely Saxendrift and Niewejaarskraal, and three alluvial diamond
exploration projects, namely Kwartelspan, Zwemkuil-Mooidraai and
Remhoogte-Holsloot, located along the southern bank of the Middle Orange River
and which are collectively referred to as the MORO. Pursuant to the terms of the
Transaction, Trans Hex transferred all its relevant mineral rights and
associated assets into a new special purpose vehicle (Saxendrift Mine (Pty)
Ltd.) which Rockwell acquired via Rockwell RSA.

Rockwell has paid Trans Hex approximately ZAR100.4 million in
cash and interest, and assume liabilities for previous staff retrenchments of
approximately ZAR4.7 million for a total consideration of approximately ZAR105.1
million (CDN$15.4 million). Trans Hex has effectively provided an amount to
Rockwell of ZAR7.8 million in environmental guarantees for previous mining and
prospecting liabilities which have been assumed by Rockwell as part of its plan
to re-process and rehabilitate material from previously mined areas and tailings
sites on the Saxendrift property, and to mine and rehabilitate remaining areas
of undisturbed in-situ alluvial deposits.

The acquisition was  completed subsequent to nine months ended February 29, 2008 on April 11, 2008.  Registration of transfer to Saxendrift Mine (Pty) Ltd. of the Saxendrift mining  right, as well as prospecting rights in respect of the Kwartelspan, Zwemkuil-Mooidraai  and part of the Remhoogte-Holsloot projects has already been obtained.  Cession of the Niewejaarskraal mining right  is still awaited at this time from the DME, and the Remhoogte prospecting right  is in the process of being renewed.  Both  companies are confident that these rights will be awarded pending which the  funds of R26.8 million allocated for their purchase will continue to be  retained in an interest-bearing Trust account.   Once the DME has issued the necessary cession and renewal documents,  these rights will also be transferred to Rockwell RSA via Saxendrift Mine (Pty)  Ltd. and the funds in Trust released to Trans Hex.

---

- 11 -

|ITEM 5 | DESCRIPTION OF
      BUSINESS
|------ | -----------------------------

Technical Summary

The following disclosure is derived from Rockwell files and
technical reports. Additional details can be found in technical reports on each
property filed on www.sedar.com.

Properties in South Africa

Figure 1 shows the location of the Holpan/Klipdam, Wouterspan,
Makoenskloof and Saxendrift/Niewejaarskraal (part of the Middle Orange River
Operations) properties located in the Republic of South Africa ("RSA" or "South
Africa").



Figure 1. Location of the Holpan/Klipdam, Wouterspan,
Makoenskloof and Saxendrift/Niewejaarskraal Properties

---

- 12 -

The Holpan/Klipdam Property

Location, Access and Infrastructure

The Holpan/Klipdam property is located 45 km from Kimberley in
the Northern Cape Province of central South Africa. Holpan and Klipdam are
adjacent properties that are accounted for separately because VWDG mined at
Holpan and Klipdam was mined by Klipdam Mining Co.

The property has ready access to all required infrastructure.
Operations are located next to an irrigation canal, so have year-round water
supply with necessary pumping stations and water supply pipelines in place. The
property is situated on a tarred road and is 45 km from Kimberley, a modern town
of 200,000 inhabitants with comprehensive mining support services, spares and
supplies. Kimberley has a regional airport and air service that links to all
major cities in South Africa. The property is connected to the national
electricity grid and the necessary transformers and supply lines are in place.
In fiscal 2008, the Company placed orders for generators to be commissioned end
of May 2008.

Property Description and Ownership

The Holpan/Klipdam property consists of the adjacent Holpan 161
and Klipdam 157 farms, covering an area of 3,836 hectares. Details are provided
in Table 1.

Table 1: Summary of Holpan-Klipdam landholdings

Company
    Property Name
    Area (ha)
    Permit No.
    Renewal DateHCVW
    Remaining extent of farm Holpan 161,
      Barkley West
    2 370.0518
    ML 1/2002
    09-11-2014Klipdam
    Remaining extent of the farm
      Klipdam 157, West
    1 466.0095
    MP 86/2002
    06-06-2004*


* An application (No. B/2004/06/07/001)
for renewal has been submitted on June 10, 2004 to the Department of Minerals
and Energy. The application for conversion was granted on 11 October 2006. The
execution of the right is dependent on Klipdam resubmitting BEE document as per
an undertaking made by Klipdam to the DME. This undertaking was complied with by
Klipdam which will allow the notarial execution to proceed. Klipdam is currently
waiting for the notarial execution to proceed.

Exploration History

Holpan and Klipdam have been the focus of intermittent mining
since the early 1900s and have consistently been known for yielding large
diamonds. In historic records George Beet (1931) discusses the Broderick
diamond  a perfect Cape white, weighing 412.5 carats.

From 1994 to 2005 at Holpan-Klipdam, extensive mining of
Rooikoppie and primary gravels took place, as well as drilling and bulk testing.
A high efficiency 200 tonnes per hour (tph) Dense Media Separation (DMS) plant
with X-ray Flowsort recovery and grease table final recovery apparatus began
operation in August 2005 and has done most of the processing since that time.
Forty-one units of Volvo and Komatsu equipment currently moves 159,000 cubic
meters (m3) of gravel and overburden on a monthly basis.

Due to the significant burial depth of the Primary gravels at
Holpan-Klipdam, the thickness and distribution of the alluvial gravel deposits
have been investigated through systematic percussion drilling. A total of 3,243
boreholes with a combined depth of 14,486 m were drilled on the Holpan-Klipdam
property between 1994 and 2005. Drill holes extended to bedrock in the majority
of cases. Boreholes were spaced at 50 m intervals along traverses 100 m apart.
Chip samples were collected at 1-m intervals

---

- 13 -

and logged on site by a geologist. Procedures were audited in
conjunction with the original field logs under the supervision of Rockwell's
consultant in November 2005.

In March 2006, RH De Decker, Pr.Sci.Nat., an independent
Qualified Person, estimated the inferred mineral resources for Holpan and
Klipdam based on operational statistics, drilling and other sampling completed
to that time as 12,339,700 m3 grading 1.16 carats per 100
m3, with an average value of US$848/carat. De Decker also suggested
that 4,800,000 m2 of gravel, that is similar, visually, to the
Rooikoppie gravels, surrounds the area of the inferred resource and that this
gravel feature, readily identifiable from the prevalent red chert clasts
(pebbles) in the regolith, abandoned artisanal workings, and vegetation features
discernable from aerial photography, should be evaluated to determine its
diamond content. This area is being assessed by exploration work that began in
fiscal 2008 and is continuing in fiscal 2009.

Dr Tania R. Marshall, Pr.Sci.Nat., an independent Qualified
Person, updated the mineral resource estimates at Holpan/Klipdam in March 2007
based on production between January 2006 and March 2007. Mining at the Holpan
and Klipdam properties focused on the Rooikoppie gravels, and a volume of
1,889,308 m3was mined and processed during the period. The total
Holpan and Klipdam mineral resources as of March 31, 2007 were estimated to be
10,450,000 m3 grading 0.95 carats per 100 m3.

Geology

A key factor in the origin of the extensive and rich alluvial
diamond deposits found in South Africa and Namibia is the existence of over 1000
diamond bearing kimberlites across southern Africa on the Kaapvaal Craton.
Kimberlite emplacement was followed by liberation and entrainment of diamonds
and deposition in terraces on the ancient Vaal and Orange Rivers between
approximately 4.8 million years ago (Ma) and 4 Ma.

The Holpan-Klipdam deposit comprises an extensive flat-lying
alluvial sequence located on the right bank of the modern Vaal River and 6 km
inland from a bend in the river known as "the Horseshoe". The sequence extends
across an area of approximately 5 km by 2.5 km. Economic concentrations of
diamonds within the sequence are found both in the deflational "Rooikoppie"
deposit and in well developed, clearly-defined palaeo-channels that were
preserved by a highly resistant calcrete cap. The palaeo-channels extend over
several km and are up to 500 m wide in places. At Holpan and Klipdam, the
bedrock consists of Archaean Ventersdorp lavas, and shales and diamictites of
the 300 to 250 million year old Dwyka Group of the Karoo Supergroup.

The Rooikoppie unit varies in thickness from a few cm up to
about 2 m and has an estimated average thickness in the order of 1 m. Solution
cavities up to 3 m deep in the calcretised bedrock form sharp, discontinuous
depressions and are filled with the overlying Rooikoppie gravel. Since such
cavities, when considered in a hydrodynamic context, have very high diamond
trapping potential and are of key economic importance. Given the high incidence
of pronounced solution features in the palaeo-land surface underlying the
Rooikoppie (as observed in current mine workings at Holpan-Klipdam), this area
is considered to be of high interest with regard to its exploration
potential.

The primary gravels found in the palaeo-channels typically
comprise the lower third of the sedimentary sequence and rest directly on the
bedrock. The thickness of the gravel bed varies from about 1 to 6 m and average
approximately 3 m thick. The primary gravels comprise a poorly sorted assemblage
of large boulders (up to 45 cm in diameter at the base of the unit), cobbles and
pebbles set in a sandy matrix that is considered to have been deposited by a
large, middle-stage, meandering river system.

---

- 14 -

High-resolution digital aerial photographs of the
Holpan-Klipdam properties clearly show the distribution of mine workings in the
area, including the adjacent Leicester kimberlite pipe. Tonal darkening, seen
immediately to the west of the Klipdam plant area, corresponds closely to a
buried palaeo-channel as defined by exploration drilling, and is interpreted to
be its surface expression.

Exploration and Operation

A program of 400 boreholes (6,000 m) is currently underway to
delineate the edges of the Klipdam Channel and to identify palaeo-channel
remnants on Holpan. Once the information from this program is compiled, a new
resource estimate will be reported.

Estimates of Mineralization

|Cautionary Note to Investors Concerning Estimates of
      Inferred Resources                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|The following discussion includes references to "inferred
      resources". Rockwell advises investors that while this term is recognized
      and required by Canadian securities regulations (under National Instrument
      43-101 Standards of Disclosure for Mineral Projects), the
      U.S. Securities and Exchange Commission does not recognize it. Readers
      cannot assume that all or any part of mineral deposits in this category
      will ever be converted into reserves. In addition, "inferred resources"
      have a great amount of uncertainty as to their existence, and great
      uncertainty as to their economic and legal feasibility. Under Canadian
      rules, estimates of Inferred Mineral Resources may not form the basis of
      feasibility or preliminary feasibility studies, except in rare cases.
      Investors are cautioned not to assume that part or all of an
      inferred resource exists, or is economically or legally mineable.

During the period of April 1, 2007 and February 29, 2008,
1,591,429 m3 were mined at Holpan and Klipdam. The mineral resources
at February 29, 2008 as estimated by Rockwells in-house qualified person G.
Norton, Pr.Sci.Nat., are:

Table 2. Holpan and Klipdam Inferred Mineral Resources

|Gravel Resource                                         | Volume(m3) | Grade(carats per 100m3)
|------------------------------------------------------- | ---------- | -----------------------
|Holpan and Klipdam alluvial
      and Rooikoppie Gravel | 8,858,000  | 0.84                   

Planned Program for fiscal 2009

The proposed budget is as follows:

Table 3. Holpan and Klipdam Planned Program

|Description            | Amount ZAR | Amount C$
|---------------------- | ---------- | ---------
|Drilling and Trenching | 3,000,000  | 400,000  

(ZAR:C$ exchange rate of 7.50)

The Wouterspan Property

Location, Access and Infrastructure

The Wouterspan Property is located on the northern bank of the
Orange River, about 100 km west of Douglas in the Northern Cape Province, South
Africa.

---

- 15 -

The area has ready access to good infrastructure. Water is
available from the Orange River. The property is directly linked to an
all-weather gravel road. It is 200 km from the town of Kimberley, where
comprehensive back up services for mining, spares and other supplies are
available. Staff quarters have been built on site and transport provisions have
been made for personnel to work on a two week on, four day off basis. The
property is connected to the national electricity grid. In fiscal 2008, the
Company placed orders for generators to be commissioned end of May 2008.

Wouterspan is situated on the edge of the Karoo, an arid semi
desert that forms part of the high plateau (or highveld) of South Africa.
Rainfall is about 200 mm per annum primarily during the summer. Winter
temperatures range from 0°C at night time to approximately 14°C during the day;
summer daytime temperatures may reach 45°C.

The project area comprises a relatively flat raised terrace
adjacent to the modern day Orange River. The main relief features include a
gentle rise towards the western limit of the permit area, together with a sharp
topographic descent of approximately 12 m in the south-east, adjacent to the
Orange River, defining the limit of the terrace. Subtle hollows, some of which
host minor ephemeral drainages are also seen in the project area.

Property Description and Ownership

The property comprises portions of the Lanyon Vale 376 farm
that total 969.4 hectares.

The surface rights of Wouterspan are held by Mr. J.F. Gouws. No
servitudes exist with regard to these landholdings. These are described below:

Table 4. Permits for Wouterspan Property

Company
    Property Name
    Area (ha)
    Permit No.
    Renewal DateFarhom Mining and Construction
    Portion 16 (a portion of Portion 9) of
      Lanyon Vale 376
    188.7926
    MP144/2004
    29-04-2006*Okapi Diamonds
    Remainder of Portion 9
      (Wouter) of Lanyon Vale 376
    779.0389
    PP86/2004
    21-11-2008HCVW
    Portion 16 (a portion of
      Portion 9) of Lanyon Vale 376
    240.4480
    PP36/2007
    07-09-2009HCVW
    Remainder of Portion 9
      (Wouter) of Lanyon Vale 376 Portion 14 (Stofdraai) of Lanyon
      Vale 376
    1369.9544 1640.6412
    PP45/2005
    21-11-2007*


*The Farhom renewal has been lodged and
accepted *The HCVW renewal has been lodged and accepted, renewal is
awaited

Exploration History

The first diamond discovered in South Africa was about 75 km
upstream of Wouterspan on the Middle Orange River ("MOR"), and led to the rapid
proliferation of small-scale artisanal mining activities. Early mining
concentrated on the surface deflation deposits, known as Rooikoppie gravels.
Rooikoppie gravels were mined extensively between Douglas and Prieska from 1926
to 1936 and again during 1943 to 1945.

The MOR had not seen much prospecting and mining activity since
that time because large areas are covered by a very hard layer of calcrete, 0.5
m  3 m thick, which limits access to the underlying gravel horizons; and the
gravels contain a high percentage of banded ironstone clasts, which makes the
treatment and concentration of the gravels technically difficult when using the
traditional pan plant processes.

---

- 16 -

More recently, the mining problem of the MOR was solved by the
use of blasting and heavy earthmoving equipment to rip and remove the hard
calcrete-silcrete layer. This new technology has resulted in the area being
effectively explored and mined for the first time.

A number of companies have been active in the area. The MOR
alluvial deposits have regularly yielded exceptional large diamonds such as a
211 carat stone recovered from a terrace on a high level terrace upstream from
Wouterspan and was reportedly sold for ZAR 28 million; a 181 carat stone
recovered from Terrace B on Saxendrift; a 205 carat stone recovered by Trans Hex
from Saxendrift and a 175 carat stone from Trans Hexs MOR mine.

In 2005, drilling indicated that the size of the gravel
deposits at Wouterspan could be at least 30 million tonnes with a targeted
recoverable diamond grade abased on bulk sampling in the order of 0.4 - 0.5
carats per 100 m3.

Between March 2005 and January 2006, a total of 513,892
m3 of Primary gravel and 24,013 m3 of Rooikoppie from 11
localities at Wouterspan property were tested during trial mining operations by
VWDG. Bulk sampling locations were selected according to the most well-developed
gravel assemblages both laterally and vertically as identified by drilling and a
series of box-cuts were excavated. This work indicated that the property hosts
an extensive alluvial deposit with a large average stone size within the
Rooikoppie and Primary gravel units. Approximately 4,481,000 m3 of
Rooikoppie Gravel and 43,259,000 m3 of Primary Gravel were defined as
a result of this work.

Additional drilling was done in 2006. An independent resource
estimate was done as at March 31, 2007. The estimate was updated as of October
31, 2007 (see Estimates of mineralization below).

Geology

Large areas of the terrace are covered by diamond bearing
surface deposits known as Rooikoppie gravels, often separated from the
underlying primary gravel by a hard layer of calcrete The basal gravels, termed
"Primary Gravels", are well exposed in the workings and shales and tillites of
the Dwyka Group, together with lava are common substrates of the gravels. The
bedrock displays gully and pothole features creating high diamond trapping
potential. At Wouterspan, the gravels occur 20 - 30 m above the Orange River and
appear to have been deposited in a braided river system. Suspended gravel
deposits found between the Rooikoppie and Primary gravels have also been shown
to contain diamonds.

The majority of the alluvial diamonds found in gravel deposits
along the MOR are found in two distinct gravel horizons: an upper deflation
deposit called the Rooikoppie gravel and the basal Primary gravels.

The Rooikoppie unit varies in thickness from a few cm up to
about 2 m and has an average thickness of about 1 m. The deposit typically rests
on sand, gravel or in places a hard, semi-continuous layer of calcrete and
silcrete. Solution cavities up to 2 m deep in the calcretised material form
sharp, discontinuous depressions that are filled with the overlying Rooikoppie
gravel.

The Primary gravel deposits comprise the lower half to one
third of the sedimentary sequence and rest directly on the bedrock. These
Primary gravels comprise a poorly sorted assemblage of large boulders (up to 45
cm in diameter at the base of the unit), cobbles and pebbles set in a sandy
matrix that is considered to have been deposited by a large, high-energy braided
system that would be readily capable of transporting diamonds. The total
sequence varies from about 8 m to 18 m in thickness.

The Wouterspan alluvial deposits represent typical remnant
river terraces comprising gravel sequences formed, in large part, through
reworking of glacial outwash deposits and appear to have a common or similar
origin as seasonal flood deposits. The secondary or younger gravels represent
re-working of

---

- 17 -

earlier deposits by late stage erosion and re-deposition as
sheetwash flood gravels in low level terraces often associated with river
damming situations and splays.

The surface deflation Rooikoppie deposits comprise a
diamond-bearing lag deposit created by erosion, winnowing and removal of light
components, and enrichment of heavy components including diamonds.

Estimates of Mineralization

|Cautionary Note to Investors Concerning Estimates of
      Indicated Resources                                                                                                                                                                                                                                                                                                                                                                                                                    
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|The following discussion includes references to "indicated
      resources". Rockwell advises investors that while this term is recognized
      and required by Canadian securities regulations (under National Instrument
      43-101 Standards of Disclosure for Mineral Projects), the
      U.S. Securities and Exchange Commission does not recognize it. Readers
      cannot assume that all or any part of mineral deposits in this category
      will ever be converted into reserves.

The mineral resources based on work to October 31, 2007 were
estimated by T. Marshall, PhD, Pr.Sci.Nat., a qualified person who is
independent of the Company. Depletion from mining since that time was estimated
by Rockwells Manager, Resources, G. Norton, Pr.Sci.Nat., who is a qualified
person but not independent of the Company. The estimated mineral resources as of
February 29, 2008 are tabulated below:

Table 5a. Wouterspan Indicated Mineral Resources

Area
    Volume
      (m3)
    Grade (carats per
      100 m3)Rooikoppie
    737,000
    0.71Fluvial-alluvial
    4,528,000
    0.71TOTAL
    5,265,000
    0.71


|Cautionary Note to Investors Concerning Estimates of
      Inferred Resources                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|The following discussion includes references to "inferred
      resources". Rockwell advises investors that while this term is recognized
      and required by Canadian securities regulations (under National Instrument
      43-101 Standards of Disclosure for Mineral Projects), the
      U.S. Securities and Exchange Commission does not recognize it. Readers
      cannot assume that all or any part of mineral deposits in this category
      will ever be converted into reserves. In addition, "Inferred resources"
      have a great amount of uncertainty as to their existence, and great
      uncertainty as to their economic and legal feasibility. Under Canadian
      rules, estimates of Inferred Mineral Resources may not form the basis of
      feasibility or preliminary feasibility studies, except in rare cases.
      Investors are cautioned not to assume that part or all of an
      inferred resource exists, or is economically or legally mineable.

Table 5b. Wouterspan Inferred Mineral Resources

Area
    Volume
      (m3)
    Grade (carats per
      100 m3)Rooikoppie
    5,911,000
    0.71Fluvial-alluvial
    31,863,000
    0.71TOTAL
    37,774,000
    0.71


Planned Program for fiscal 2009

Some 20,000 m of additional drilling was planned for fiscal
2008. A second phase 15,000 m program is currently underway, with the budget
shown in the table below. Once the information from this program is completed, a
new resource estimate will be done.

---

- 18 -

Table 6. Wouterspan Planned Program

Description
    Amount ZAR
    Amount C$Drilling
    1,000,000
    159,235


Makoenskloof Project

Property Agreement

In conjunction with the acquisition of Durnpike, HCVW had an
option agreement to acquire the Makoenskloof alluvial diamond project. The
Makoenskloof property is located on the north bank of the Middle Orange River, approximately 20 km from the town of Douglas, South Africa, and 40 km
upstream from the Wouterspan diamond operation. As a result of the acquisition
of HCVW by Durnpike, and concurrent acquisition of Durnpike by Rockwell, the
Company assumed the option to purchase the Makoenskloof property.

In November 2006, HCVW exercised its option to purchase the
property and the company that held the mineral rights of the Makoenskloof
property. HCVW paid ZAR5.4 million in January 2007 for the property and mining
permits. Pursuant to this option exercise, HCVW also entered into a
sub-contracting agreement with Folmink Delwery CC to perform bulk sampling
commencing in March 2007. In April 2007, HCVW entered into an agreement to
purchase ZAR21.3 million in plant and equipment from the sub-contractor and to
terminate the sub-contracting arrangement. The Company has paid a total
consideration of ZAR1.5 million in during the year and is committed to pay the
remaining consideration in the following manner:

- ZAR3 million shall be payable by way of Common Shares of the Company. The
  shares cannot be exchanged, or traded, or sold in any manner, by the seller
  for a period of one year after the date a listing on the JSE. In the event a
  listing is not concluded or is not finalized on or before February 28, 2008,
  the outstanding balance (including the ZAR3 million) shall be payable by way
  of monthly cash payments of ZAR1 million and shall incur interest calculated
  at the prime rate of the Standard Bank of South Africa.
- During August 2007, an amount of ZAR10.6 million was paid to settle the
  outstanding balances owing on certain equipment that was purchased. The
  remaining balance payable of ZAR$2.3 million shall be paid in monthly payments
  of ZAR500,000. The monthly payments shall incur interest calculated at the
  prime rate of the Standard Bank of South Africa. The final payment will occur
  at the end of July 2008.

Location and Access

The Makoenskloof alluvial diamond project is located on the
north bank of the MOR, approximately 20 km from the town of Douglas, South
Africa, and 40 km upstream from the Wouterspan diamond operation. The property
is accessible by road from Douglas.

---

- 19 -

Property Description

The Makoenskloof Project is a Portion 22 of Reads Drift 74
farm, located in the Herbert District of the Northern Cape Province of the
Republic of South Africa. The Makoenskloof farm is 1,808.08 hectares in
size.

Geology

The Makoenskloof deposit comprises an extensive flat lying
alluvial sequence located on a terrace developed on the right bank of the
present Orange River. The bedrock is well exposed in the workings and shale and
tillite of the Karoo age Dwyka Group are common. Also visible in outcrop are
limestone and siltstone (flagstone) of the Griqualand West Group (Transvaal
Supergroup). The bedrock characteristically displays an irregular erosional
surface with gully and pothole features creating high diamond trapping
potential. At Makoenskloof, the gravel terrace occurs approximately 20 to 40 m
above the Orange River and appears to have been deposited in a braided river
environment. These terraces may be classified as Lower to Intermediate deposits,
presumably of Plio-Pleistocene age.

Only small isolated outcrops of Rooikoppie gravels are known
from the property. These deposits have not yet been investigated and will be
described at a later date.

The fluvial-alluvial gravels on Makoenskloof comprise a
sequence of (basal) gravels 2-4 m thick overlain by generally less than 5 m of
variably calcreted sands and silts and covered by a thin layer of soil and
scree. The cobble sized clasts within the gravels consist mostly of lava and
quartzite, with minor limestone, chert, tillite, agate and banded iron formation
(BIF). The matrix is sandy to gritty. As is usual with these types of deposits
the degree of calcretisation decreases downwards, from hard pan or laminar
calcrete at the surface to loosely cemented gravels at depth.

The gravels are, generally, not well sorted, massive to
horizontally - bedded and more matrix - supported. The larger clasts are,
generally, in the 300 - 500 mm range. They are typical of braid bars that
migrate through sections of river channels in response to variable water
speed.

Numerous sand-silt lenses (0.5 1.5 m thick) are also present,
indicative of relatively low energy environments such as are found on bar tails.
However, incised into the sequence are scour channels filled with clast
supported, large cobble to boulder units. These are locally referred to as high
speed channels that reflect deposition in a much higher energy environment. It
is, typically, from these higher energy environments, especially where incised
into the bedrock that the larger diamonds are recovered.

It is important to note that, in contrast with the deposits
further down the Orange River the gravel on Makoenskloof has minimal BIF, which
means that the processing and metallurgy is less complicated and overall mining
costs are lower, thereby compensating for potentially low grades.

Recent Exploration

Plant and infrastructure were upgraded and commissioning of the
recovery plant began in July. Bulk sampling was conducted during fiscal 2008,
and recovered stones were included in tender sales in October and November 2007
and January 2008. No further work is planned.

---

- 20 -

The Galputs Minerale Project

Location and Access

The Galputs property is located on the Koa River in
Namaqualand, in the Northern Cape Province, South Africa.

Galputs Pan, located on an extensive plain with little
topographic relief, is one of a series of deflation pans located along the
palaeo-Koa River that actively flowed for about 5 million years. Access to the
project site is possible via a number of well-maintained gravel roads. The roads
are adequate for large vehicle use and link to both Springbok and Upington which
have regular daily air-links to major centres in South Africa. The nearest large
town is Springbok, about 110 km west of Galputs. Aggenys, 45 km north of
Galputs, is connected to the town of Springbok in the west by an excellent
tarred road and with Upington to the north-east by an equally good paved road. A
wellmaintained paved landing strip suitable for small to mid-sized aircraft is
located at Aggenys.

The Namaqualand region is extremely arid with annual rainfall
averaging only 125 mm, occurring mainly in the summer months from November to
February.

Property Description

The property is comprised of the mining rights to the Galputs
104 farm on which diamondiferous gravels have been identified.

A mining license (ML 1/2003) was issued to Galputs Minerale
(Pty) Limited on January 8 2003 and is valid until January 7 2018. This mining
license was granted in respect of a property comprising 791,183 hectares. The
mining license constitutes an Old Order Mining Right and must be converted to a
New Order Right by 2009. A valid Environmental Management Program (EMPR) is in
place for the prospecting and mining operations. A surface use agreement is also
in place with the landowner of the property.

In terms of diamond mining operations the South African
government receives a 5% state royalty from diamond revenues, while South
African company tax is 29%. A 5% royalty is paid to the farmer after deduction
of the State royalty.

The Galputs Project is indirectly owned by Virgilia Investments Inc  ("Virgilia"), a British Virgin Islands  corporation.  Virgilia's wholly-owned  subsidiary, Galputs Minerale (Pty) Limited, a private SA company, holds mining  rights to the Galputs Project.  Rockwell  will acquire, for nominal consideration and subject to DME approval, all of the  outstanding shares of Virgilia from Marla Trust.

History

Exploration and prospecting work has been conducted
intermittently at Galputs since 1936, with systematic prospecting only
commencing in 1960. Between 1936 and 1986, a total of 4,110 carats were
recovered. No previous data are available to reliably determine the in situ
grade of the gravels at the Galputs Project. Mining at Bosluis Pan, a nearby
site in the Koa Valley, on gravel deposits similar to that of Galputs, has
indicated an average grade of about 3 carats per hundred tons, with reports of
exceptionally rich areas reaching grades of 70 carats per hundred tons.

---

- 21 -

Production by Galputs Minerale commenced in March 2002 and
processing increased in August 2002, resulting in an estimated mining rate of
about 14,000 tonnes of gravel and 42,000 tonnes of waste overburden per month.
Mining was hampered by a hard layer of silcrete overlying the gravel and
excessive groundwater found in certain areas. The largest stone recovered during
prospecting in 2002 was 17.5 carats, the average stone size for the period June
to August 2002 was 0.98 carats with the average selling price from March 2002 of
US$388 per carat.

Exploration by Galputs Minerale comprised a drilling program
along lines 500 m apart over selected areas and construction of simple 3D models
for these areas. Galputs Minerale also undertook prospecting by means of
excavation and processing of gravels to recover diamonds so that estimates could
be made of in-situ grades. Prospecting work was undertaken in the Central or
Main Pan, the Northern Pan and the Neck area, Gravels remaining in areas
previously mined were also delineated, excavated and mined, and tailings
material which still contained a high proportion of clasts was also retreated.
Final diamond recovery was by concentration in a Plietz jig at different size
fractions (typically 1.5 mm, 4-8 mm, 8-16 mm, and +16 mm), after which the
different concentrates were hand sorted.

Results of the bulk sampling work indicate a consistent
distribution of diamonds across the pan and show that the gravel sequences
produce consistently high value gem diamonds. Results produced by Galputs
Minerale are compatible with previous prospecting results obtained at Galputs by
other operators.

A total of 139 percussion boreholes were drilled along lines
500 m apart and with hole spacing 20 m apart over a localized portion of the
deposit; 67 holes of these holes intersected gravel in the Northern Pan and Neck
Area, and the Main Pan, and Southern Pan. The work was done by Mine Track
Solutions and indicated that the gravel deposit was relatively intact and
prospective in the Northern Pan and the neck Area between the Northern and Main
Pans. Computer modeling of the drill results was carried out to make an initial
estimate of volumes and tonnages.

Based on a drilling program and computer modeling by Van Breda
(2004), a number of observations with respect to the diamondiferous gravels at
the Galputs Project may been made. The reader is advised that the following
observations are based on historic data alone and do not constitute a mineral
resource under the terms of Canadian National Instrument 43-101.

|(i)   | Northern Pan and Neck Area  potential gravel resource is
      510,000 tonnes.                                                                                                                                                                                                                                       
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(ii)  | Main and South Pans  potential gravel resource of 82,800
      tonnes for the Main Pan, with further gravels covered by silcretes which
      could yield diamonds as well. No drilling was done on the South Pan,
      though excavations from previous prospecting indicate the presence of
      gravel horizons.
|(iii) | Tailings Heaps - There are large tailings heaps that are
      known to contain diamonds.                                                                                                                                                                                                                             

Based on estimates of Cooke (2002a) and selective drilling and
resource delineation undertaken by Mine Track Solutions on behalf of Durnpike,
it is reasonable to assume there is a gravel volume of between 700,000 and 2.1
million tonnes. Note that this does not constitute a mineral resource under the
terms of Canadian National Instrument 43-101.

Geology

The Koa River and region around Galputs was probably occupied
by the Orange River during Miocene times (5 Ma). It is now generally accepted
that the diamonds found in both the coastal marine deposits and fluvial gravels
of Namaqualand have been derived from the kimberlite pipes occurring in the
hinterland of southern Africa. The hinterland is underlain by rocks of the
ancient Kaapvaal Craton and from which as much as 500  1,500 m of erosion has
taken place since the intrusion of kimberlites in the late Cretaceous (120  85
Ma). The considerable quantity of diamonds released would have been

---

- 22 -

transported through the Koa Valley with possible deposition of
some stones in favourable hydrological traps eroded into the bedrock.

The geology of the region comprises granite gneiss rocks of the
Gladkop Metamorphic Suite. These are Proterozoic basement sequences of the
Bushmanland Metamorphic Complex which yield ages of about 1,300 million years.
Locally, as in the Koa River Valley, ancient drainages are found with sequences
of diamondiferous gravel deposits. Diamonds found in the Koa Valley were
deposited during the transport of vast amounts of material eroded from
kimberlite pipes and fissures situated in the hinterland, to the Atlantic coast
during the Tertiary (65 to 2 Ma). Regionally the cover deposits are extensive
wind blown sequences of Quaternary age.

Diamonds are found in the alluvial gravel successions that have
been exposed in a series of large pans, which are represented by large flat
depressions typically about 1 to 2 km in length, and 200 to 500 m in width
located along the palaeo-Koa River drainage. The gravel deposits are located on
the granite gneiss basement and comprise a thin horizon varying in thickness
from a few centimeters to about 1 meter in places. The gravel layer is overlain
by coarse silty sandstones, which in places is lithified to a hard silcrete and
sand.

The rock assemblages comprising the gravels are mainly quartz
and quartzite pebbles with minor amounts of banded ironstone, epidote and
jasper. Abundant garnet and ilmenite are present in heavy mineral concentrate.
Cobbles and boulders are dominantly granitic in composition and are frequently
highly weathered.

The Galputs Pan comprises three interleading pan-shaped
features: the Northern Pan and Neck Area, the Main or Central Pan and the
Southern Pan.

Diamond mineralization in the Galputs deposit is primarily
confined to the extensive basal gravel sequence that occurs immediately above
the granite-gneiss basement that underlies the Galputs Pan. Silcretes which
overlie the well developed gravel horizon at Galputs also contain clasts and
gravel fragments in places and it is possible that they could be diamond
bearing.

Planned Program

In 2006, a program was proposed to systematically test the
Galputs deposit by trial mining at an initial scale of about 25,000 tonnes per
month with the ability to rapidly expand this to about 50,000 tonnes per month.
No work was done in 2007 and 2008 and no work is planned in 2009.

---

- 23 -

The Middle Orange River Operations  South
Africa

Agreement

See Significant Acquisitions  Middle Orange River Operations
under Item 4 above.

Property Location and Access

The properties are located adjacent to the Wouterspan Property
on the Middle Orange River.

Property Description

The mineral rights holding of the properties acquired by
Rockwell on successful completion of the MORO transaction are indicated in Table
8. Note that the cessation of the Niewejaarskraal mining right and renewal of
the Remhoogte prospecting right is underway and final transfer will occur once
these are received.

Table 8. Middle Orange River Operations Mineral Rights

|                           | FARM NAME          | PORTION      | SIZE (HA) | STATUS     
|-------------------------- | ------------------ | ------------ | --------- | -----------
|Saxendrift Operations      | Saxendrift 20      | Ptn Of Rem   |           |            
|                           | Saxendrift 21      | Remainder    | 1368.294  | Transferred
|                           | Saxendrift 21      | Ptn Of Ptn 1 |          
|                           | Saxendrift 20      | Ptn Of Rem   | 359.000   |            
|Niewejaarskraal Operations | Niewejaarskraal 40 | Ptn Of Ptn 6 |           |            
|                           | Niewejaarskraal 40 | Ptn Of Ptn 4 | 1766.390  | Pending    
|                           | Niewejaarskraal 40 | Ptn Of Ptn 2 |           |            
|                           | Viegulands Put 39  | Ptn Of Rem   | 324.105   | Transferred
|                           | Viegulands Put 39  | Ptn Of Rem  
|                           | Niewejaarskraal 40 | Ptn Of Ptn 6 | 995.200  
|Kwartelspan Project        | Kransfontein 19    | Ptn 1        | 903.650   | Transferred
|                           | Kwartelspan 25     | Remainder   
|Remhoogte-HolslootProject  | Remhoogte 152      | Ptn Of Ptn 1 | 2798.511  | Pending    
|                           | Holsloot 47        | Ptn Of Ptn 3 | 1049.590  |            
|Zwemkuil-Mooidraai Project | Zwemkuil 37        | Ptn Of Rem   | 2488.124  | Transferred
|                           | Mooidraai 36       | Ptn Of Rem   | 2901.000  |            

Ptn - portion; Rem - remainder

Project History

The MORO comprise two open pit alluvial diamond mines currently
on care and maintenance, namely Saxendrift Mine and Niewejaarskraal Mine, and
three alluvial diamond exploration projects, namely Kwartelspan,
Zwemkuil-Mooidraai and Remhoogte-Holsloot.

The Saxendrift area has had a long history of diamond
production dating back to the mid 1920s. An estimated 96,000 carats of diamonds
were extracted from the area between 1928 and 1964. Trans Hex

---

- 24 -

commenced exploration and mining in the area in 2000 through a
merger with GEM Diamond Mining Limited, which held the mineral rights to
Saxendrift at that time.

The Saxendrift Mine comprises three mining areas: Brakfontein
(not included in the disposal to Rockwell), Saxendrift Terrace A and Saxendrift
Terrace B. From commissioning to the end of 2005, the Saxendrift Mine produced a
total of 76,803 carats. The largest gem quality stone ever produced by Trans Hex
 a 216 carat octahedron  was from the Saxendrift operation in 2001. Saxendrift
also held the Trans Hex record for the highest dollar per carat price with a
9.22 -carat blue stone that was sold in 2003 for in excess of US$45,000/carat.
Production on Saxendrift was achieved by open cast mining methods with
processing and recovery being achieved by a combination of rotary pan plants,
Dense Media Separation and Flow-sort X-ray recovery.

Trans Hex began its development of the Niewejaarskraal Mine with a  bulk-sampling program in mid-2001. A DMS plant was erected on site and  full-scale production commenced in April 2002. This operation was suspended in  late 2006.

During its tenure of the MOR operations, Trans Hex also conducted  exploration and evaluation work on several large alluvial gravel terraces to  the north east of Saxendrift, namely Kwartelspan, and to the south west of  Niewejaarskraal, namely Vieglandsput, Zwemkuil-Mooidraai and  Remhoogte-Holsloot. Exploration work conducted on the adjacent properties  included reverse circulation drilling, trenching and bulk sampling.

In 2006, in anticipation of the  disposal of the projects, Trans Hex mandated Venmyn to undertake a techno economic  valuation of the MORO and present their findings in the form of a SAMREC  compliant Competent Persons Report, highlighting the status of the mining,  prospecting and surface rights held over the projects and indicating that  several of the old order rights would lapse if no application was made for  conversion to new order rights before May 2006. These applications were duly  submitted by Trans Hex to the relevant government departments.

Since the date of issue of the report in April 2006, only
limited mining production has taken place at Niewejaarskraal and Saxendrift
Mines. In January 2007, Saxendrift Mine was placed on care and maintenance and
shortly thereafter Niewejaarskraal Mine followed suit. Venmyn updated the
resource estimate in 2007 for Rockwell.

Estimates of Mineralization

The mineral resources at March 2007 as estimated by G.D.
Stacey, B.Sc.Eng and C.A. Telfer, Pr.Sci.Nat., of Venmyn Rand (Pty) Ltd. Ms
Telfer is an independent qualified person as defined by National Instrument
43-101.

|Cautionary Note to Investors Concerning Estimates of
      Indicated Resources                                                                                                                                                                                                                                                                                                                                                                                                                    
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|The following discussion includes references to
      "indicated resources". Rockwell advises investors that while this term is
      recognized and required by Canadian securities regulations (under National
      Instrument 43-101 Standards of Disclosure for Mineral
      Projects), the U.S. Securities and Exchange Commission does not
      recognize it. Readers cannot assume that all or any part of mineral
      deposits in this category will ever be converted into reserves.

---

- 25 -

Table 9a. Middle Orange River Operations Indicated Mineral
Resources

PROJECT
    AREA
    VOLUME (m3)
    GRADE (carats/100 m3)Saxendrift
    Saxendrift Terrace A
    1,824,000
    0.83Saxendrift Terrace B
    422,000
    1.15Stockpiles
    385,539
    0.46Total/Average Saxendrift Indicated
    2,631,539
    0.82Niewejaarskraal
    Niewejaarskraal
    4,164,745
    0.80Viegulandsput
    1,802,822
    1.16Total/Average Niewejaarskraal Indicated
    5,967,567
    0.91TOTAL INDICATED
    8,599,106
    0.88


|Cautionary Note to Investors Concerning Estimates of
      Inferred Resources                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|The following discussion includes references to "inferred
      resources". Rockwell advises investors that while this term is recognized
      and required by Canadian securities regulations (under National Instrument
      43-101 Standards of Disclosure for Mineral Projects), the
      U.S. Securities and Exchange Commission does not recognize it. Readers
      cannot assume that all or any part of mineral deposits in this category
      will ever be converted into reserves. In addition, "Inferred resources"
      have a great amount of uncertainty as to their existence, and great
      uncertainty as to their economic and legal feasibility. Under Canadian
      rules, estimates of Inferred Mineral Resources may not form the basis of
      feasibility or preliminary feasibility studies, except in rare cases.
      Investors are cautioned not to assume that part or all of an
      inferred resource exists, or is economically or legally mineable.

Table 9b. Middle Orange River Operations Inferred Mineral
Resources

PROJECT
    AREA
    VOLUME (m3)
    GRADE (carats/100 m3)Saxendrift
    Saxendrift Terrace A
    5,723,000
    0.48Saxendrift Terrace B
    1,821,000
    0.68Stockpiles
    263,000
    0.29Total/Average Saxendrift Inferred
    7,807,000
    0.52Niewejaarskraal
    Niewejaarskraal
    1,696,000
    0.48Viegulandsput
    1,465,000
    0.47Nieweskraal TB2
    4,919,000
    0.90Total /Average Niewejaarskraal Inferred
    8,080,000
    0.73Zwemkuil-Mooidraai
    N/A
    1,640,000
    0.95Remhoogte-Holsloot
    N/A
    11,503,000
    1.15Kwartelspan
    N/A
    1,385,000
    1.50Total/Average of Exploration Projects Inferred
    14,528,000
    1.16TOTAL INFERRED
    30,415,000
    0.88


Studies by THO indicated densities or specific gravities at the
Saxendrift operations: 2.2 for Basal gravels, and 1.90 for Middlings gravels.
The deposits are similar at all the mines and projects described above and an
average density or specific gravity of 2.1 is be used to convert cubic meters to
tonnes. The total indicated mineral resources would be 18.3 million tonnes and
the total inferred mineral resources would be 63.9 million tonnes.

---

- 26 -

Properties in the Democratic Republic of the
Congo

The Kwango River Project

Location and Access

The property is located on the Kwango River in the Bandundu
Province of southeastern Democratic Republic of the Congo ("DRC") (Figure
2).



Figure 2 Location of Kwango River Property

Roads in the DRC are passable for the purposes of moving heavy
equipment associated with project startup. The country's aging railway
infrastructure provides important connections domestically as well as with the
Angolan port of Luanda and with southern Africa. Daily flights are available
between Kinshasa and Tembo.

Cell phone signals can be picked up from Mawangu, the village 5
km from the Midamines campsite on top of the plateau. At present, satellite
technology represents the only viable option for the communication of voice and
data outside the project area.

The project area is also accessible via Angola, through the
town of Malange, about 250 km south-southwest from Tembo. Luanda lies a further
400 km to the west and could be used as port of disembarkation for the
equipment.

The country's regional climate is tropical to sub-tropical.
While annual average rainfall is in the order of 1,300 mm in the south, it is
nevertheless possible to work in the river for most of the year, which

---

- 27 -

Midamines have reportedly done in the nineties. The Kwango
River is navigable by light vessel for the full length of the Kwango Project
area. During the dry season the river level drops considerably and water flow
ceases altogether, leading to the exposure of sandbars.

Property Description

The Kwango River Project encompasses over 75 km of river
frontage and also extends across elevated, palaeo-river terraces. Alluvial
diamond deposits occur as gravel assemblages within the modern Kwango River,
underlying its banks and in the adjacent terraces.

The Kwango River Project in the DRC comprises approximately 109
square km within Exploitation Permit Number 331 ("PPE331") held by Midamines
SPRL ("Midamines"), a company incorporated, and operating, in the DRC. Durnpike
has an agreement with Midamines to manage and carry out exploration and mining
on a portion of PPE331, as contractor for and on behalf of Midamines, and is
entitled to an 80% share of the net revenue from the sale of any diamonds
produced from the contract area. PPE 331, issued in December 2003, is valid
until January 2017 (and is renewable for a second term) and allows the holder to
conduct exploration, develop and exploit the deposit as well as market the
diamonds produced from the deposit according to local government requirements
and the Kimberley Process.

History

Subsequent to the discovery of the rich West Kasai diamond
fields in the DRC in 1907, other diamond bearing deposits were noted in
south-west DRC along the Kwango (also spelled Cuango) River and extensive
exploration work was undertaken in the region during the 1950's. Reports state
that "the results of washing gravels about 25km south of the Tembo Falls brought
immediate results of 81 diamonds weighing 9.42 carats". Following good results
in Angola, prospecting by the company Forminiere took place in the recent
fluvial deposits between the Franz-Jozef and Tembo Falls. The conclusion from
that work was that the primary origin of the Kwango diamonds lies upstream of
the Cuango-Quissema confluence. In 1961, another investigation of the region
between Tembo and Franz-Jozef Falls confirmed the earlier work of 1959: the
presence of potholes and gullies with locally important concentrations of
diamonds. The difference between the Angolan and DRC diamonds are in their size:
in DRC the average is between 10 and 20 stones per carat and in Angola between 1
and 10 stones per carat.

Due to the vast number of diamonds and easy mining conditions
encountered in the West Kasai deposits, emphasis on exploitation of diamonds in
the DRC has remained focused on this area, with areas such as those noted along
the Kwango River having been subjected only to artisanal mining.

Since the implementation of political changes in the DRC, the
new Minerals Act of 2003, and the implementation of the Kimberley Process to
which the DRC is a signatory, diamond production has grown steadily.

Midamines has been active in the Kwango River since the mid
nineties. This appears to have been the first mining operations to have been
undertaken in the Kwango Valley from the DRC. The results of their earlier work
are not known. No activity is recorded from the Angolan side of the river in
this part of the Kwango River, despite the good results achieved further
upstream at Luzamba and Luremo.

The river deposits are currently being mined using small
dredges, and the river bank and terraces are being mined by small scale
excavations. The Government Valuator in Kinshasa has valued parcels of diamonds
from recent small scale mining on the property in the range of US$85 to US$110
per carat. The recoveries from both sources are 0.15 to 0.2 carats per 30 kg
samples.

---

- 28 -

Midamines has not maintained precise production records and no
other reports are available to give an indication of the size of the diamond
resource along the Kwango River. However since the commencement of the project
the author is aware that Midamines produced a parcel of diamonds in the order of
2,700 carats in September 2005 which attracted average sales prices of US$115 to
$125 when marketed in Antwerp.

Approximately 84% of the diamonds produced by Midamines are gem
diamonds and only about 6% classify as industrials and rejects. Of the gem
population, a significant 34% classify as sawables, and 60% classify as
makables. Typically, diamonds recovered from the Kwango River comprise a well
sorted population of stones, with an average size of approximately 0.25 carats
per stone.

Geology

The project area lies in the broad valley cut by the Kwango
River into the Cretaceous Kwango Formation conglomerates, sandstones and
siltstones. These rocks are the equivalent of the diamondiferous Calonda
Formation in Angola. The Calonda Formation is considered to be a prime source of
the secondary diamond deposits that are mined in recent drainage systems, for
example, diamonds being mined at Luzamba and elsewhere along the Cuango and Lui
Rivers in Angola, which both lead into the Kwango River to the north.

The Kwango Formation is generally covered by younger Quaternary
age sediments of the barren Kalahari Formation. The sequence forms low rolling
hills that terminate in a plateau that lies about 150 m above the river.

The bedrock is granitic gneiss, displaying potholes and gullies
exhibiting extremely high diamond trapping potential. Extensive indurated,
closely-packed diamondiferous gravel was observed in these potholes and gullies.
The gravel lies below 5 to 10 m of overburden that consists of well-sorted buff
to reddish-brown sand, interfingered with silty to clayey sand.

Extensive raised terrace deposits are found adjacent to the
modern river system, formed in an earlier geological period when the base level
of the river valley was at a higher elevation. The significance of the terrace
deposits are that they may be indurated Kwango Formation and therefore present a
different metallurgical challenge for their exploitation.

It is apparent that the basal gravel units should be targeted
as a potential source of alluvial diamonds. Funnelling of the stream flow
prevents the deposition of fine sediments. Under suitable conditions and
resistant lithologies, the higher flow rates generated would create potholes,
gullies and other irregularities in the bedrock that would act as trapsites for
diamonds. Because of their high specific gravity and small size, the diamonds
would quickly settle to the bottom and be covered (and consequently protected)
by cobbles, pebbles and boulders. This process would continually add diamonds to
the same trapsites, thereby enriching the grade of the basal deposits.

Planned Program

A preliminary budget scenario has been compiled for the Kwango
River project based on the observations of manufacturing companies including
Marine and Mineral Projects' (Pty) Limited and ADP Projects (Pty) Limited, of
Cape Town, South Africa, both with extensive experience of operating conditions
in Angola and the DRC. The scenario is very preliminary in nature and is
intended as a guide for initial financial planning. No members of personnel from
either of the above companies have visited the project area or examined the
project data and no exclusive planning or feasibility study has been undertaken.

A provisional budget for the initial exploration work and bulk
sampling program is:

---

- 29 -

Table 10. Planned Program

Description
    AmountC$Desk
      top geological studies, resource delineation, 3D modeling, field vehicles,
      site
    200,000surveysEstablishment of operational infrastructure
    100,000Purchase of rotary pan plant and X-ray flowsort final
      recovery unit
    1,300,000Purchase of Earth moving equipment
    2,700,000Logistics, road construction and site infrastructure
    2,200,000Fuel
    1,400,000Total
    7,900,000


In late 2006 and early 2007, Rockwell has been advancing the
logistical activities for its planned exploration and bulk sampling initiative
with Midamines. Rockwell has established a working base in Kinshasa and
conducted geophysical and other investigations on site.

One of the 50% shareholders of  Midamines has, subsequent to the conclusion of the Midamines Agreement denied  the validity of that agreement. The other 50% shareholder disputes this  view and remains committed to the Midamines Agreement.  Due to this dispute, Midamines has not  afforded Durnpike access to the site, and assistance as regards its proposed  operations on the site, in the manner contemplated in the Midamines Agreement.  This failure has significantly delayed the Company’s proposed operations on the  site, and it is consequently the Company’s position that the required royalty  payments have become suspended for the duration of the dispute.

The Company will obtain formal  legal advice from counsel and evaluate its available remedies.  Although the outcome is not currently determinable the project is not a  material operation of the Company. During the third quarter of 2008 the Company  paid consideration of $600,000 to Midamines in order to increase the size of  the concession (Permit 331).

Ricardo Property, Chile

Rockwell also holds a 100% interest in the Ricardo Property, a
copper prospect in the Chuquicamata district of Chile. Although exploration on
the Ricardo Property to date has not identified a deposit containing economic
mineralization, Rockwell's management remains optimistic that given its
location, the Ricardo Property represents a property that warrants further
exploration or the possibility of a farm-out to another party prepared to fund
its exploration.

Rockwell is looking for new partners to advance exploration at
the Ricardo Property.

---

- 30 -

RISK FACTORS

This annual report contains forward-looking statements which
relate to future events or Rockwell's future performance, including its future
financial performance. In some cases, you can identify forward-looking
statements by terminology such as "may", "should", "expects", "plans",
"anticipates", "believes", "estimates", "predicts", or "potential" or the
negative of these terms or other comparable terminology. These statements are
only predictions and involve known and unknown risks, uncertainties and other
factors, including the risks in enumerated in this section entitled "Risk
Factors", that may cause Rockwell's or the mining industry's actual results,
levels of activity, performance or achievements to be materially different from
any future results, levels of activity, performance or achievements expressed or
implied by these forward-looking statements.

While these forward-looking statements, and any assumptions
upon which they are based, are made in good faith and reflect Rockwell's current
judgment regarding the direction of its business, actual results will almost
always vary, sometimes materially, from any estimates, predictions, projections,
assumptions or other future performance suggested in this annual report. Except
as required by applicable law, including the securities laws of the United
States, Rockwell does not intend to update any of the forward-looking statements
to conform these statements to actual results.

An investment in Rockwell's common stock involves a number of
very significant risks. You should carefully consider the following risks and
uncertainties in addition to other information in this annual report in
evaluating Rockwell and its business before purchasing shares of Rockwell's
common stock. Rockwell's business, operating results and financial condition
could be seriously harmed due to any of the following risks. The risks described
below are not the only ones facing Rockwell. Additional risks not presently
known to Rockwell may also impair its business operations. You could lose all or
part of your investment due to any of these risks.

Risks Associated With Mining

There is no assurance that Rockwell can formally
establish the existence of any mineral reserve on any of its properties. Until
Rockwell is able to establish a mineral reserve, there can be no assurance that
production from these properties will continue for any period of time and if
production fails, Rockwell's business may ultimately fail.

Although Rockwell now owns and operates properties with a
history of sporadic to regular diamond production, these properties have never
been subject to a formal reserve estimation through scientific exploration
techniques. Accordingly, there is no assurance that Rockwell can formally
establish the existence of any mineral reserve on any of its properties. A
mineral reserve is defined by the Securities and Exchange Commission in its
Industry Guide 7 (which can be viewed over the Internet at http://www.sec.gov/divisions/corpfin/forms/industry.htm#secguide7)
as that part of a mineral deposit which could be economically and legally
extracted or produced at the time of the reserve determination. The probability
of an individual prospect ever having a "reserve" that meets the requirements of
the Securities and Exchange Commission's Industry Guide 7 is remote. If none of
our current or future mineral resource properties contains any "reserve," any
funds that Rockwell spends on exploration will be lost.

---

- 31 -

Even if Rockwell discovers a mineral reserve, there can
be no assurance that the related property will be developed.

Even if Rockwell eventually discovers a mineral reserve on one
or more of its properties, there can be no assurance that it will be able to
develop the properties into producing mines. Both mineral exploration and
development involve a high degree of risk and few properties which are explored
are ultimately developed into producing mines.

The commercial viability of an established mineral deposit will
depend on a number of factors including, by way of example, the size, grade and
other attributes of the mineral deposit, the proximity of the resource to
infrastructure such as a smelter, roads and a point for shipping, government
regulation and market prices. Most of these factors will be beyond Rockwell's
control, and any of them could increase costs and make extraction of any
identified mineral resource unprofitable.

Mineral operations are subject to applicable law and
government regulation. Even if Rockwell discovers a mineral resource in a
commercially exploitable quantity, these laws and regulations could restrict or
prohibit the exploitation of that mineral resource. If Rockwell cannot exploit
any mineral resource that it might discover on our properties, its business may
fail.

Both mineral exploration and extraction require permits from
various foreign, federal, state, provincial and local governmental authorities
and are governed by laws and regulations, including those with respect to
prospecting, mine development, mineral production, transport, export, taxation,
labor standards, occupational health, waste disposal, toxic substances, land
use, environmental protection, mine safety and other matters. There can be no
assurance that Rockwell will be able to obtain or maintain any of the permits
required for the continued exploration of its mineral properties or for the
construction and operation of a mine on its properties at economically viable
costs. If Rockwell cannot accomplish these objectives, our business could
fail.

Rockwell believes that it is in compliance with all material
laws and regulations that currently apply to its activities but there can be no
assurance that it can continue to do so. Current laws and regulations could be
amended and the Company might not be able to comply with them, as amended.
Further, there can be no assurance that Rockwell will be able to obtain or
maintain all permits necessary for our future operations, or that it will be
able to obtain them on reasonable terms. To the extent such approvals are
required and are not obtained, Rockwell may be delayed or prohibited from
proceeding with planned exploration or development of its mineral
properties.

In addition, environmental hazards unknown to Rockwell which
have been caused by previous or existing owners or operators of the properties
may exist on the properties in which Rockwell holds an interest. Even if
Rockwell relinquishes its licenses, it will still remain responsible for any
required reclamation and rehabilitation of the properties.

Mineral exploration and development are subject to
extraordinary operating risks. Rockwell does not currently insure against these
risks. In the event of a cave-in or similar occurrence, Rockwell's liability may
exceed its resources, which would have an adverse impact on
Rockwell.

Mineral exploration, development and production involve many
risks which even a combination of experience, knowledge and careful evaluation
may not be able to overcome. Hazards such as unusual or unexpected formations
and other conditions are involved.

Rockwell's operations will be subject to all the hazards and
risks inherent in the exploration, development and production of resources,
including liability for pollution, cave-ins or similar hazards against which it

---

- 32 -

cannot insure against or which it may elect not to insure. Any
such event could result in work stoppages and damage to property, including
damage to the environment. Rockwell does not currently maintain any insurance
coverage against these operating hazards. The payment of any liabilities that
arise from any such occurrence would have a material, adverse impact on
Rockwell.

The prediction of grade can be more challenging for the
type of deposit which the Company is exploiting.

In the case of alluvial diamond deposits, the prediction of
grade can be challenging due to the inherent geological nature of such deposits.
The alluvial diamonds are laid down by rivers flowing over uneven terrain and
the diamonds vary in terms of size and quality. Individual diamonds are not
evenly or uniformly distributed through out an alluvial deposit; neither are
they randomly distributed. Rather, their distribution has been described as a
random distribution of clusters of points. The clusters are both randomly
distributed in space, and the point density of the cluster is also random. In
order to determine grade under such circumstances it is necessary to process
large volumes of material (bulk testing) in order to be sure that grade
calculations are representative and accurate. Moreover, in the case of such
deposits, drilling is only of use in the determination of gravel distribution
and not diamond content, since the volume of material recovered is
insufficiently representative of grade. Notwithstanding the above caution, bulk
testing is a straightforward technique that is currently being applied across
all of Rockwell's South African operations. Furthermore, size frequency
distribution curves can be used to accurately predict the relative abundance of
diamonds in terms of stone size, thus mitigating risk.

Mineral prices are subject to dramatic and unpredictable
fluctuations.

Rockwell expects to derive revenues from the extraction and
sale of diamonds and, possibly, from the extraction and sale of base metals such
as copper. The prices of those commodities have fluctuated widely in recent
years, and are affected by numerous factors beyond Rockwell's control including
international, economic and political trends, expectations of inflation,
currency exchange fluctuations, interest rates, global or regional consumptive
patterns, speculative activities and increased production due to new extraction
developments and improved extraction and production methods. The effect of these
factors on the price of diamonds and base metals, and, therefore, the economic
viability of any of Rockwell's projects, cannot accurately be predicted.

The mining industry is highly competitive and there is no
assurance that Rockwell will continue to be successful in acquiring mineral
claims. If Rockwell cannot continue to acquire properties to explore for mineral
resources, it may be required to reduce or cease operations.

The mineral exploration, development, and production industry
is largely unintegrated. Rockwell competes with other exploration companies
looking for mineral resource properties and the resources that can be produced
from them. However, the mining business operates in a worldwide market, and
prices for minerals are derived from relatively pure market forces. Accordingly,
competition to sell any metals or concentrates produced should not be an issue
if metals prices warrant production

Rockwell competes with many companies possessing greater
financial resources and technical facilities. This competition could adversely
affect Rockwell's ability to acquire suitable prospects for exploration in the
future. Accordingly, there can be no assurance that Rockwell will acquire any
interest in additional mineral resource properties that might yield reserves or
result in commercial mining operations.

---

- 33 -

Risks Related to Rockwell

In January 2007, the Company completed all the conditions under
the Definitive Agreement to acquire Durnpike. Commencing January 31, 2007 (Date
of Acquisition), the results of operations from the acquisition of the
Companys rights and/or interest in the following properties have been included
in the consolidated statement of operations: Holpan/Klipdam Property in South
Africa, Wouterspan Property in South Africa, Galputs in South Africa and Kwango
River Project in the DRC.

The recoverability of the amounts shown for the Companys
mineral property interests, property, plant and equipment and inventory is
dependent upon the existence of economically recoverable mineral resources and
future profitable production or proceeds from the disposition of the mine. The
Companys continuing operations are also dependent upon the discovery and
existence of economically recoverable mineral reserves, the ability of the
Company to obtain the necessary financing to complete the exploration and
development of its mineral property interests, and upon future profitable
production or proceeds from the disposition of its mineral property
interests.

Rockwell requires additional financing in order to
continue in business as a going concern, the availability of which is
uncertain.

Rockwell requires additional financing to fund its operations.
At February 29, 2008, the Company had a working capital of $26,094,261 compared
to a working capital of $26,742,798 at May 31, 2007.

The Company has estimated that it will have adequate funds from
existing working capital to meet our corporate, operational, development,
administrative and property obligations for the coming year. The Company will
periodically need to obtain additional financing, and while it has been
successful in the past, there can be no assurance that it will be able to do so
in the future. Any additional equity financing that Rockwell undertakes could be
dilutive to existing shareholders, and any debt financing that Rockwell
undertakes could involve restrictive covenants with respect to future capital
raising activities and other financial and operational matters.

Management recognizes that the group will need to generate
additional financial resources in order to discharge its liabilities and achieve
its planned business objectives. Since the operations of Rockwell have been
primarily funded through funds raised from equity financing, the groups ability
to continue operations and exploration activities as a going concern is
dependent upon its ability to obtain additional funding. While the Company is in
production from its operating properties and has been successful in obtaining
its required financing in the past, there is no assurance that raising funds
from these sources will be successful or, if successful, will be sufficient to
support the groups operations and exploration activities in the future.

There is no guarantee of title to Rockwell's
properties.

Although Rockwell has obtained the usual industry standard
title reports with respect to its properties, this should not be construed as a
guarantee of title. Properties may be subject to prior unregistered agreements
or transfers, or native land claims, and title may be affected by undetected
defects. Certain of the claims may be under dispute and resolutions of a dispute
may result in the loss of all of such property or a reduction in Rockwell's
interest therein.

Surveys have not been performed on all the
properties.

Not all of Rockwell's properties have been surveyed and,
accordingly, the precise location of the boundaries of the properties and
ownership of mineral rights on specific tracts of land comprising the

---

- 34 -

properties may be in doubt. It is therefore possible that if
Rockwell discovers a mineral deposit near the boundary of one of its properties,
such mineral deposit may end up being outside the boundary of its property and
therefore not owned by Rockwell.

Some of Rockwell's directors and officers serve on the
boards of other exploration companies, which could potentially give rise to
conflicts of interest.

Some of Rockwell's directors and officers are engaged, and will
continue to be engaged, in the search for additional business opportunities on
their own behalf and on behalf of other companies. Situations may arise where
these directors and officers will be in direct competition with Rockwell.
Conflicts, if any, will be dealt with in accordance with the relevant provisions
of the Business Corporations Act (British Columbia) and applicable
law.

The loss of any of Rockwell's key management employees
could have a material adverse effect on Rockwell's business.

The nature of Rockwell's business and Rockwell's ability to
continue its exploration activities and to exploit any mineral reserves that it
may find in the future depends, in large part, on Rockwell's ability to attract
and maintain qualified key management personnel. Competition for such personnel
is intense, and there can be no assurance that Rockwell will be able to attract
and retain such personnel. Rockwell's development now and in the future will
depend on the efforts of key management figures, such as John W. Bristow,
Rockwell's Chief Executive Officer, and Dominique de la Roche, Chief Financial
Officer. The loss of any of these key people could have a material adverse
effect on Rockwell's business. Rockwell does not currently maintain key-man life
insurance on any of its key employees.

Rockwell's properties are located in South Africa, the
Democratic Republic of the Congo, and Chile and its operations there may be
affected by varying degrees of political and economic uncertainties.

Rockwell's properties are located in South Africa and the
Democratic Republic of the Congo (the DRC) and Chile, and mineral exploration
and mining activities in these countries may be affected in varying degrees by
political stability and economic uncertainties. Operations also may be affected
in varying degrees by government regulations with respect to restrictions on
production, repatriation of profits, price controls, export controls, income
taxes, expropriations or property, environmental legislation and mine
safety.

South Africa has recently undergone major constitutional
changes to effect majority rule, and also to effect mineral title. Accordingly,
many laws may be considered relatively new, resulting in risks such as possible
misinterpretation of new laws, modification of mining or exploration rights,
operating restrictions, increased taxes, environmental regulation, mine safety
and other risks arising out of a new sovereignty over mining, any or all of
which could have an adverse impact upon Rockwell. Rockwell's operations may also
be affected in varying degrees by political and economic instability, terrorism,
crime, extreme fluctuations in currency exchange rates and inflation.

The DRC has been the subject to significant political and civil
unrest. In 1992, the DRC completed a transition to multi-party democracy after a
long history of one-party Marxist rule. However, the 1990s were subject to
periods of violent civil unrest, including a low-level guerrilla war waged
against the government by a group known as the "Ninjas" in the Pool region of
the country. The DRC has remained stable and calm since the signing of a peace
accord with the Ninjas in March 2003.

In March 2006, the World Bank and International Monetary Fund
("IMF") approved Heavily Indebted Poor Countries decision point treatment for
the DRC. However, the IMF and World Bank noted that the DRC

---

- 35 -

needed to address serious concerns about governance and
financial transparency in order to qualify for completion point and irrevocable
debt relief. Any resources that are freed by interim debt relief granted to
Congo must be used for poverty reduction under a reform program closely
monitored by the international financial institutions.

There is no assurance that Rockwell's operations in the DRC
will not be affected in the future by political and economic instability,
terrorism, crime, extreme fluctuations in currency exchange rates and inflation.

There can be no assurance that the current economic and
political stability in Chile will continue throughout the period in which
Rockwell is looking to explore and operate its properties or that government
regulations will not be changed in a way that will adversely affect Rockwell's
operations in the country. Any shifts in political or economic conditions, and
any changes to government regulations relating to the mining industry and
foreign investors in Chile are beyond the control of Rockwell and may adversely
affect its business.

South African government empowerment initiatives may
adversely affect Rockwell's ability to obtain or maintain permits and licenses
for mining rights in South Africa.

In order to address inequalities to Historically Disadvantaged
Persons ("HDP") engendered by South Africa's former apartheid system, the South
African Government has initiated certain government empowerment initiatives.

In October 2002, the South African government enacted the
Mineral Development Act that deals with the state's policy towards the future of
ownership of minerals rights and the procedures for conducting mining
transactions in South Africa. The Mineral Development Act is a statute with
wide-ranging objectives, including sustainable development and the promotion of
equitable access to South Africa's mineral wealth by the inclusion of HDP into
the industry. The Mineral Development Act came into effect in May 2004. The
South African government has stated that, under the Mineral Development Act, it
will be issuing permits and licenses for prospecting and mining rights to
applicants using a "scorecard" approach. Applicants will need to demonstrate
their eligibility for consideration based upon the number of credits accumulated
in terms of quantifiable ownership transformation criteria, such as employment
equity and human resource development.

Future amendments to, and interpretations of, the economic
empowerment initiatives by the South African government and the South African
courts could adversely affect the business of Rockwell and its results of
operations and its financial condition.

Absence of dividends

Rockwell has paid no dividends on its shares since
incorporation, and does not anticipate doing so in the foreseeable future.

Rockwell is subject to potentially volatile exchange rate
fluctuations

Rockwell conducts operations in currencies other than Canadian
dollars. Of particular significance is the fact that Rockwells operations in
South Africa are almost entirely paid for in South African Rand, which has
historically devalued against the United States dollar, but which recently has
shown unexpected and substantial strength against most major world currencies,
including the United States dollar. The strength in the South African Rand, if
it continues, will negatively impact the potential profitability of Rockwells
mining operations.

---

- 36 -

Rockwell expects to be a passive foreign investment
company, which could have consequences for U.S. investors.

Potential investors who are U.S. taxpayers should be aware that
Rockwell expects to be a passive foreign investment company ("PFIC") for the
current fiscal year, that it may also have been a PFIC in prior years, and that
it may also be a PFIC in subsequent years. If Rockwell is a PFIC for any year
during a U.S. taxpayer's holding period, then such U.S. taxpayer generally will
be required to treat any so-called "excess distribution" received on its common
shares, or any gain realized upon a disposition of common shares, as ordinary
income and to pay an interest charge on a portion of such distribution or gain,
unless the taxpayer makes a qualified electing fund ("QEF") election or a
mark-to-market election with respect to the shares of Rockwell. In certain
circumstances, the sum of the tax and the interest charge may exceed the amount
of the excess distribution received, or the amount of proceeds of disposition
realized, by the taxpayer. A U.S. taxpayer who makes a QEF election generally
must report on a current basis its share of Rockwell's net capital gain and
ordinary earnings for any year in which Rockwell is a PFIC, whether or not
Rockwell distributes any amounts to its shareholders.

Rockwell's stock is a penny stock. Trading of Rockwell's
stock may be restricted by the SEC's penny stock regulations which may limit a
stockholder's ability to buy and sell Rockwell's stock.

Because the market price for Rockwell's shares is less than
US$5.00, its securities are classified as "penny stock". For transactions
involving a penny stock, brokers or dealers are required to approve a previous
account for penny stock transactions, which involves obtaining financial
information concerning the investor and satisfying themselves that the investor
has sufficient knowledge and experience to evaluate the risks associated with
penny stock. The broker or dealer must also deliver certain information to
investors on penny stock, including disclosure concerning the risks associated
with penny stock, and must receive a written agreement from investors prior to
the transactions. As a result of the penny stock restrictions, brokers or
potential investors may be reluctant to trade in Rockwell's securities, which
may result in less liquidity for Rockwell's stock.

NASD sales practice requirements may also limit a
stockholder's ability to buy and sell Rockwell's stock.

In addition to the "penny stock" rules promulgated by the
Securities and Exchange Commission (see above for discussions of penny stock
rules), the National Association of Securities Dealers (NASD) has adopted
rules that require that in recommending an investment to a customer, a
broker-dealer must have reasonable grounds for believing that the investment is
suitable for that customer. Prior to recommending speculative low priced
securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customer's financial status,
tax status, investment objectives and other information. Under interpretations
of these rules, the NASD believes that there is a high probability that
speculative low priced securities will not be suitable for at least some
customers. The NASD requirements make it more difficult for broker-dealers to
recommend that their customers buy Rockwell common stock, which may limit your
ability to buy and sell Rockwell stock and have an adverse effect on the market
for Rockwell shares.

Rockwell has a significant number of outstanding options
and warrants, the exercise of which could result in significant equity
dilution.

At February 29, 2008, Rockwell had a significant number of
share purchase options (7,462,000) and warrants (161,379,154), which will likely
act as an upside damper on the trading price range of Rockwell's shares. The
underlying shares issuable upon exercise of these securities represent
approximately 75% of Rockwell's currently issued shares.

---

- 37 -

|ITEM 6 | DIVIDENDS
|------ | ---------

The Company has paid no dividends in any of the two fiscal
years ending May 31, 2006 and 2007 or for the nine months ending February 29,
2008. The Company does not pay dividends and has no plans to do so in the
foreseeable future.

|ITEM 7 | DESCRIPTION OF CAPITAL
      STRUCTURE
|------ | --------------------------------------

Rockwell's share capital consists of one class of no par value
common shares.

Common Shares

There are unlimited common shares authorized and 223,755,854
common shares without par value were issued and outstanding as fully paid and
non-assessable as of February 29, 2008. As of May 31, 2007, there were
186,976,219 common shares issued and outstanding as fully paid and
non-assessable.

There has been one change in the classification of common
shares (reclassifications, consolidations, reverse splits or the like) within
the previous five years ended February 29, 2008. All common shares of Rockwell
rank pari passu (i.e. equally) for the payment of any dividends and
distributions in the event of a windup.

There are no constraints imposed on the ownership of securities
of Rockwell. Rockwells securities have not received any ratings from any rating
organization

|ITEM 8 | MARKET FOR
      SECURITIES
|------ | ---------------------------

Rockwells common shares are listed and posted for trading in
Canada on the TSX under the symbol RDI. Until February 2008, Rockwells common
shares traded in Canada on the TSX Venture Exchange. Rockwells common shares
are posted for trading in the United States on the OTCBB under the symbol RDIAF.
Commencing November 2007, Rockwells common shares have traded in the Republic
of South Africa on the Johannesburg Stock Exchange (JSE) under the symbol
RDI.

The following table shows the historical high and low trading
prices and average daily trading volume of the common shares of Rockwell on the
Toronto Stock Exchange (TSX), TSX Venture Exchange, JSE and the OTCBB for the
periods listed.

|                |   | RDI.TO (in CAD) |  |   | RDIAF.OB (in USD) |  |  | RDI.JSE (in ZAR) | 
|--------------- | - | --------------- |  | - | ----------------- |  |  | ---------------- | 
|                |   |                 |  |   |                   |  |  | Avg              | 
|                |   | High            |  |   | Low               |  |  | Volume           | 
|Last **twelve** |   |                 |  |   |                   |  |  |                  | 
|months          |   |                 |  |   |                   |  |  |                  | 
|May-08          | $ | 0.55            |  | $ | 0.42              |  |  | 401,600          | 
|Apr-08          | $ | 0.50            |  | $ | 0.45              |  |  | 54,400           | 
|Mar-08          | $ | 0.64            |  | $ | 0.45              |  |  | 168,000          | 
|Feb-08          | $ | 0.59            |  | $ | 0.50              |  |  | 70,300           | 

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- 38 -

|Jan-08   | $ | 0.67 |  | $ | 0.54 |  |  | 163,400 |  | $ | 0.68 |  | $ | 0.30 |  |  | 8,200  |  |  | 450 |  |  | 420 |  |  | 3,000   | 
|-------- | - | ---- |  | - | ---- |  |  | ------- |  | - | ---- |  | - | ---- |  |  | ------ |  |  | --- |  |  | --- |  |  | ------- | 
|Dec-07   | $ | 0.64 |  | $ | 0.56 |  |  | 760,300 |  | $ | 0.71 |  | $ | 0.55 |  |  | 2,400  |  |  | 450 |  |  | 420 |  |  | 7,800   | 
|Nov-07   | $ | 0.70 |  | $ | 0.55 |  |  | 261,200 |  | $ | 0.73 |  | $ | 0.55 |  |  | 18,100 |  |  | 440 |  |  | 440 |  |  | 120,900 | 
|Oct-07   | $ | 0.70 |  | $ | 0.61 |  |  | 364,100 |  | $ | 0.74 |  | $ | 0.60 |  |  | 6,300  |  |  |     |  |  |     |  |  |         | 
|Sept -07 | $ | 0.71 |  | $ | 0.58 |  |  | 730,900 |  | $ | 0.65 |  | $ | 0.55 |  |  | 4,400  |  |  |     |  |  |     |  |  |         | 
|Aug-07   | $ | 0.75 |  | $ | 0.62 |  |  | 372,500 |  | $ | 0.72 |  | $ | 0.60 |  |  | 9,100  |  |  |     |  |  |     |  |  |         | 
|July-07  | $ | 0.80 |  | $ | 0.68 |  |  | 191,000 |  | $ | 0.75 |  | $ | 0.59 |  |  | 8,300  |  |  |     |  |  |     |  |  |         | 
|June-07  | $ | 0.70 |  | $ | 0.60 |  |  | 355,600 |  | $ | 0.66 |  | $ | 0.57 |  |  | 7,700  |  |  |     |  |  |     |  |  |         | 
|May-07   | $ | 0.78 |  | $ | 0.58 |  |  | 266,500 |  | $ | 0.70 |  | $ | 0.54 |  |  | 22,100 |  |  |     |  |  |     |  |  |         | 

|ITEM 9 | ESCROWED
      SECURITIES
|------ | -------------------------

There are no shares of Rockwell held in escrow.

|ITEM 10 | DIRECTORS AND
      OFFICERS
|------- | ----------------------------

The names and municipalities of residence of the directors and
senior officers of the Company, their principal occupations during the past five
years, and the period of time they have served as directors or officers of
Rockwell are as follows. Except where indicated, each director and senior
officer of Rockwell has held the same or similar principal occupation with the
organization indicated or a predecessor thereof for the last five years.

---

- 39 -

Name, Position and Country of Residence
    Period a Director of Rockwell
    Securities Beneficially Owned or
      Controlled(1)D. Mark Bristow 4, 5
    Director Johannesburg, South
      Africa
    Since March 2007
    1,117,000 Common Shares 1,177,000 Warrants
      450,000 OptionsJohn Bristow President, Chief Executive Officer, Chief
      Operating Officer and Director Pretoria, South Africa
    Since 
      August 2006
    Nil Common Shares 600,000 Options Nil
      warrantsRene Carrier 2,3
    Director West Vancouver, British
      Columbia, Canada
    Since 
      April 1993
    258,359 Common Shares 300,000 Options
      50,000 WarrantsDavid Copeland 4, 5
    Chairman and Director
      Vancouver, British Columbia, Canada
    Since September 2006
    1,224,373 Common Shares 500,000 Options
      192,000 WarrantsScott Cousens3, 4
    Director Vancouver, British
      Columbia, Canada
    Since 
      November 2000
    3,242,436 Common Shares 450,000 Options 6
      977,000 Warrants 9Dominique de la Roche Chief Financial Officer and
      Director Johannesburg, South Africa
    Since May 2007
    Nil Common Shares 300,000 OptionsDouglas Silver 2
    Director Englewood, Colorado,
      United States of America
    Since 
      March 1998
    Nil Common Shares 300,000 Options Nil
      WarrantsPatrick Bartlett 2, 3, 4, 5
    Director Pretoria
      Gauteng, South Africa South Africa
    Since September 2007
    Nil Common Shares Nil Options Nil
      Warrants


Notes:

|1. | The information as to securities beneficially owned or
      controlled is not within the knowledge of the management of the Company
      and has been furnished by the respective nominees and are based on insider
      reports filed on www.sedi.caas at May
      28, 2008.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2. | Member of the Audit Committee                                                                                                                                                                                                                                                    
|3. | Member of the Nominating and Governance
  Committee                                                                                                                                                                                                                              
|4. | Member of the Compensation Committee                                                                                                                                                                                                                                             
|5. | Member of the Technical Committee                                                                                                                                                                                                                                                
|6. | Mr. John Bristow, Mr. Mark Bristow, Mr. Carrier, Mr.
      Copeland, Mr. Cousens, and Mr. Silver each hold options to purchase common
      shares at $0.62 per share expiring on September 24, 2012                                                                             
|7. | Mr. De la Roche holds options to purchase common shares
      at $0.68 per share expiring on July 10, 2010                                                                                                                                                                       
|8. | Share purchase warrants exercisable over three years with
      the option to exercise at $0.60 expiring on November 22, 2007, the option
      to exercise at $0.80 expiring on November 22, 2008 and the option to
      exercise at $1.00 on November 22, 2009                

At the annual general meeting held in November 22, 2007, all
directors listed above were re-elected to a term of office expiring at the next
annual general meeting of Rockwell, which is currently scheduled for August 21,
2008. Some of the directors serve together on a number of boards of other
publicly listed companies.

Although the directors oversee the management of Rockwells
affairs, a cost sharing arrangement exists between a number of the public
resource companies on which several of the directors serve pursuant to a

---

- 40 -

1996 administrative and geological service agreements with
Hunter Dickinson Inc. (HDI). HDI is a private company owned equally by nine
public companies including Rockwell. HDI provides executive, engineering,
geological and administrative services to, and incurs costs on behalf of, these
companies and allocates the full costs to them. All officers have a term of
office lasting until their removal or replacement by the Board of Directors
however there are certain services agreements in place with respect to these
persons which will affect any termination of services.

Principal Occupations and Other Information about Rockwells
Directors and Management

DAVID COPELAND, P.Eng.  Chairman and Director

David Copeland is a geological engineer who graduated in
economic geology from the University of British Columbia. With over 30 years of
experience, Mr. Copeland has undertaken assignments in a variety of capacities
in mine exploration, discovery and development throughout the South Pacific,
Africa, South America and North America. His principal occupation is President
and Director of CEC Engineering Ltd., a consulting engineering firm that directs
and co-ordinates advanced technical programs for exploration on behalf of
companies for which Hunter Dickinson Inc. provides services. He is also a
director of Hunter Dickinson Inc.

Mr. Copeland is, or was within the past five years, an officer
and/or director of the following public companies:

Company
    Positions Held
    From
    ToAmarc Resources
      Ltd.
    Director
    September 1995
    PresentAnooraq Resources
      Corporation
    Director
    September 1996
    September 2004Continental Minerals Corporation
    Director
    November 1995
    PresentPresident & CEO
    January 2008
    PresentFarallon Resources
      Ltd.
    Director
    December 1995
    PresentGreat Basin Gold
      Ltd.
    Director
    February 1994
    PresentNorthern Dynasty
      Minerals Ltd.
    Director
    June
      1996
    PresentRockwell Diamonds Inc.
    Director
    September 2006
    PresentChief
      Executive Officer
    September 2006
    September 2007Chairman
    September 2007
    PresentTaseko Mines
      Limited
    Director
    March
      1994
    Present


DR. JOHN BRISTOW  President, Chief Executive Officer, Chief
Operating Officer and Director

John Bristow holds a PhD degree in geology from the University
of Cape Town and has over 30 years experience in the diamond business,
encompassing the exploration, evaluation, and mining of kimberlite and alluvial
diamond deposits in Africa and internationally. His career began with De Beers
in 1983 in Kimberley and moved to Johannesburg in 1990 where he was Manager of
the Anglo American Research Laboratories, prior to establishing an independent
international diamond consultancy in 1994.

He was employed by the Anglo AmericanandDe Beers
Group of companies for 12 years from 1983 1994. He served as Head of
International Research with De Beers in Kimberley (South Africa), and was

---

- 41 -

subsequently Head of the Geology Laboratory at the Anglo
American Research Laboratories in Johannesburg. Thereafter he moved to the
New Projects Division of the Anglo American Research Laboratories.

In 1994 John started an international diamond consultancy, and
helped establish the Minerals and Energy Policy (MEPC) Johannesburg. This
non-Governmental Organization (NGO) was created to build capacity in minerals
and mining skills amongst previously disadvantaged role players. In 1996 he
raised Cdn$3 million for the MEPC minerals and mining capacity building
program.

During 1996  1997 he served as technical director to
Moonstone Diamonds (an Australian junior), and from 1996 - 1998 was
diamond analyst for financial securities company Huysamer Stals - ABN 
Amro.

In 1998 John played a key role in creating and listing
successful alluvial diamond producer Gem Diamond Mining Corporationon
the Johannesburg Stock Exchange, in which Tokyo Sexwales Mvelaphanda
Diamonds subsequently acquired an interest. Gem Diamonds Saxendrift
mining operation consistently produced amongst the worlds highest value alluvial
diamonds, and was merged with the

Trans Hex Group in 2000.

From 2002 he was a Director and CEO of Kalahari Diamonds
Limitedand its subsidiary Sekaka Diamonds (Pty) Limitedin Botswana
until Kalahari was merged with Petra Diamonds in late 2005.

He has provided consulting and contracting services to the
local and international minerals industry, specializing in diamonds, and has
considerable local (Southern African and African) and international experience
in the exploration, prospecting, evaluation and mining of kimberlites, and land
and marine alluvial diamond deposits. He has wide ranging management and
corporate experience, and has been active in Black Empowerment business ventures
in South Africa.

Most recently he was CEO of Kalahari Diamonds plc in Botswana,
which successfully merged with Petra Diamonds in 2005. Dr. Bristow is, or was
within the past five years, an officer and/or director of the following public
companies:

Company
    Positions Held
    From
    ToOropa Limited
    Director
    December 2000
    April
      2004Rockwell Diamonds Inc.
    Director
    August
      2006
    PresentPresident
    August
      2006
    PresentChief
      Operating Officer
    August
      2006
    PresentChief
      Executive Officer
    September 2007
    Present


DOMINIQUE DE LA ROCHE  Chief Financial Officer and
Director

Dominique de la Roche is a Chartered Accountant with an Honours
Degree in Accounting Sciences from the University of South Africa (UNISA), and a
Higher Diploma in Tax from UNISA. He completed his articles at Price Waterhouse,
and subsequently worked for Vaal Reefs Exploration & Mining Company (Anglo
American), Standard Corporate and Merchant Bank in Johannesburg, and BCL (Ltd)
in Botswana and was Financial Director at Kairos Industrial Holdings/Witbank
Brickworks.

---

- 42 -

Mr. de la Roche has extensive operational experience in the
senior and junior mining sectors, finance and corporate environments, as well as
expertise in the South African mining taxation regime. He has gained past
working experience in mining activities and legislative environments within
different southern African countries.

Mr. de la Roche replaced Jeffrey Mason as CFO and joined the
Board of Directors effective September 26, 2007. Mr. de la Roche is not a
director of any other public company.

Company
    Positions Held
    From
    ToRockwell Diamonds Inc.
    Chief
      Financial Officer
    May
      2007
    PresentDirector
    September 2007
    Present


DR. PATRICK BARTLETT  Director

Dr. Bartlett, a geologist and mining engineer with extensive
experience in exploration evaluation and mining of alluvial diamond and
kimberlite deposits, joined the Board of Directors as an Independent Director on
September 26, 2007.

Patrick Bartlett holds a BSc Honours degree from Rhodes
University, and MSc in Minerals Exploration from London University, a BA in
Economics and Communications from the University of South Africa, and a PhD in
Mining Engineering from the University of Pretoria. He worked for De Beers for
some 38 years and during that time gained experience in the evaluation and
development of West Coast alluvial diamond deposits, undertook feasibility work
of the Jwaneng mine in Botswana and other diamond mines, was the mine geologist
of the Kimberley Central Mines, and later was the Chief geologist of the
Cullinan diamond mine.

Mr. Bartlett has extensive experience in grade control, size
frequency analysis and mineral resource management, and processing and recovery
methods as applied to diamond deposits. He is an internationally recognized
expert on block cave mining methods and since his retirement from De Beers in
2003, he has consulted to many of the world leading diamond and base metal
mining companies.

Mr. Bartlett is a director of Rockwell Diamonds Inc. since
September 2007. He has not been an officer or director of any other public
companies in the past five years.

DR. MARK BRISTOW  Director

Dr. Mark Bristow was appointed to the Rockwell Diamonds Inc.
Board of Directors in December 2006. Dr. Bristow comes to Rockwell with 20 years
experience in exploration, development, project and corporate finance and
management in the mining sector in Africa.

From 1992 to 1995, Dr. Bristow had executive responsibility for
the exploration and new business activities of Randgold & Exploration. In
August 1995 he was appointed Managing Director and subsequently, in October
1995, CEO of Randgold Resources, which he helped establish as Randgold &
Explorations international mining and exploration subsidiary and subsequently
built it into an independent, public gold mining and exploration company which
is listed on the London Stock Exchange as well as NASDAQ in New York. He has
held director positions on the boards of: Harmony Gold Mining Company Limited;
Durban Roodepoort Deep, Limited; Blyvooruitzicht Gold Mining

---

- 43 -

Company Limited; Buffelsfontein Gold Mines Limited; and The
Grootvlei Proprietary Mines Limited and until recently AFPLATS Plc., the AIM
listed, junior Platinum company. Besides his affiliation with Randgold, Dr.
Bristow was the Chairman of SOMISY (Syama) until that company was sold to
Resolute in 2004. He is currently the Chairman of the SOMILO Board of Directors
(Loulo Gold Mining Company), a non-executive Director of Morila Limited and a
member of the President of Senegals Economic Advisory Committee as well as the
President of Malis advisory council. He is also a fellow of the Geological
Society of South Africa and he holds a PhD in geology from Natal University.

Dr. Bristow has been CEO of Randgold Resources, a
publicly-traded company since it was incorporated in 1995. He currently is, or
was within the past five years, an officer and/or director of the following
public companies:

Company
    Positions Held
    From
    ToMidway Resources
      Intl.
    Director
    November 2005
    PresentRandgold Resources
      Limited
    CEO
      and Director
    August
      1995
    PresentRockwell Diamonds
      Inc.
    Director
    December 2006
    Present


RENE CARRIER  Director

Rene Carrier is a past Vice-President of Pacific International
Securities Inc. where he worked for ten years, until 1991. Since that time he
has been President of Euro-American Capital Corporation, a private company which
specializes in restructuring, administration, and raising venture capital funds
for junior companies.

Mr. Carrier currently is, or was within the past five years, an
officer and/or director of the following public companies:

Company
    Positions Held
    From
    ToAcrex Ventures
      Ltd.
    Director
    September 2000
    September 2003Chartwell
      Technology Inc.
    Director
    June
      1991
    April
      2007Continental
      Minerals Corporation
    Director
    February 2001
    PresentInternational
      Royalty Corporation
    Lead
      Director
    June
      2003
    PresentQuartz Mountain Resources Ltd.
    Director
    January 2000
    PresentPresident
    June
      2005
    PresentRockwell Diamonds
      Inc.
    Director
    April
      1993
    Present


---

- 44 -

SCOTT COUSENS  Director

Scott Cousens provides management, technical and financial
services to a number of publicly traded companies. Mr. Cousens focus since 1991
has been the development of relationships within the international investment
community. Substantial financings and subsequent corporate success has
established strong ties with North American, European and Asian investors.

Mr. Cousens is, or was within the past five years, an officer
and/or director of the following public companies:

Company
    Positions Held
    From
    ToAmarc Resources
      Ltd.
    Director
    September 1995
    PresentAnooraq Resources
      Corporation
    Director
    September 1996
    PresentContinental
      Minerals Corporation
    Director
    June
      1994
    PresentFarallon Resources
      Ltd.
    Director
    December 1995
    April
      2007Great Basin Gold
      Ltd.
    Director
    March
      1993
    November 2006Northern Dynasty
      Minerals Ltd.
    Director
    June
      1996
    PresentRockwell Diamonds
      Inc.
    Director
    November 2000
    PresentTaseko Mines
      Limited
    Director
    October 1992
    Present


DOUGLAS SILVER  Director

Douglas Silver, the president and owner of Balfour Holdings
Inc., holds a Bachelor of Geology and Zoology degree from the University of
Vermont and a Masters degree in Economic Geology from the University of Arizona.
Mr. Silver, who is based in Englewood, Colorado, has had twenty years of
professional experience in the base and precious metals industry ranging from
exploration geologist to activities in the areas of corporate business
development, capital raising and investor relations.

Mr. Silver has been a director of Rockwell since March 1998 and
is, or was within the past five years, an officer and/or director of the
following public companies:

Company
    Positions Held
    From
    ToRockwell Diamonds
      Inc.
    Director
    March
      1998
    PresentInternational
      Royalty Corporation
    Chairman and CEO
    February 2005
    PresentMirasol Resources
      Ltd
    Director
    February 2005
    Present


|ITEM 11 | PROMOTERS
|------- | ---------

Not applicable.

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- 45 -

|ITEM 12 | LEGAL
      PROCEEDINGS
|------- | -----------------------

The Company is not involved in any outstanding litigation or
legal proceedings and to the knowledge of the management of the Company, no
material legal proceedings involving the Company or its subsidiaries are
contemplated.

|ITEM 13 | INTEREST OF MANAGEMENT
      AND OTHERS IN MATERIAL TRANSACTIONS
|------- | ----------------------------------------------------------------

None of the directors or senior officers of the Company, nor
any person who has held such a position since the beginning of the last
completed financial year end of the Company, nor any associate or affiliate of
the foregoing persons, has any substantial or material interest, direct or
indirect, by way of beneficial ownership of securities or otherwise, in any
material transaction of the Company other than as set out herein.

Hunter Dickinson Inc. (HDI) is a private company owned
equally by nine public companies, one of which is Rockwell. HDI has certain
directors in common with the Company and provides geological, corporate
development, administrative and management services to, and incurs third party
costs on behalf of, the Company and its subsidiaries on a full cost recovery
basis pursuant to an agreement dated December 31, 1996. Certain of the Companys
senior management are employed by HDI rather than by Rockwell directly.

|ITEM 14 | TRANSFER AGENT AND
      REGISTRAR
|------- | ----------------------------------

Computershare Trust Company of Canada (Vancouver) and
Computershare Investor Services 2004 (Pty) Ltd. (Johannesburg) are the
co-transfer agents and co-registrars for the common shares of Rockwell Diamonds
Inc.

|ITEM 15 | MATERIAL
      CONTRACTS
|------- | ------------------------

Except for contracts entered into in the ordinary course of
business, the only material contracts entered into by Rockwell Diamonds Inc. for
the nine months ending February 29, 2008 or before the financial ended May 31,
2007 but which are still in effect are the following:

| | (a) | HCVW and Rockwell share exchange agreement to acquire an
      additional 23% of the Van Wyk Diamond Group assets.                                                                                                                                                                                                                                                                      
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                         
| | (b) | Acquisition Agreement to acquire between Trans Hex Group
      Limited and the Company to acquire the Saxendrift Mine.                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                         
| | (c) | Acquisition Agreement amongst Rockwell Diamonds Inc.,
      Hunter Dickinson Inc. and Jeffrey Brian Brenner, Robert Pinkas Blau, Larry
      Lipschitz, Dennis Mark Bristow, John Bristow, Leslie Johnston, Gabriel
      Rousseau Malan, Ira Sasha Epstein and Jester Investment Trust for the
      purchase of the common shares of Durnpike Investments (Proprietary)
      Limited.

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- 46 -

| | (d) | Contractor Agreement between Galputs Minerale
      (Proprietary) Limited and Durnpike Investments (Proprietary)
    Limited.
| | --- | -----------------------------------------------------------------------------------------------------------------------------

The material contracts are available for review on the SEDAR website  located at www.sedar.com.

|ITEM 16 | INTERESTS OF EXPERTS
|------- | --------------------

Dr Tania Marshall, Pr.Sci.Nat., Mr Glenn Norton,  Pr.Sci.Nat., Ms CA Telfer, Pr.Sci.Nat., Mr A. Clay, Pr.Sci.Nat., and Mr. N. McKenna, Pr.Sci.Nat., are persons  who:

|(a) | are named as having prepared, or co-prepared, a report
      described in a filing, or referred to in a filing, made under National
      Instrument 51-102 by the Company during, or relating to, the Companys
      most recently completed financial year; and
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                   
|(b) | whose profession or business gives authority to the
      report made by him or her.                                                                                                                                                                              

Dr Marshall, Mr Norton, Ms Telfer, Mr Clay and Mr McKenna have interest in the common shares of the Company, directly or indirectly, or through stock options, that represent less than 1% of the Company's outstanding share capital.

|ITEM 17 | ADDITIONAL INFORMATION
|------- | ----------------------

Additional information, including directors' and officers'
remuneration, indebtedness of officers, executive stock options and interests of
management and others in material transactions, where applicable, is contained
in annual financial statements, proxy circulars and interim financial statements
available at the SEDAR internet web site (www.sedar.com).

The following documents can be obtained upon request from
Rockwell's Shareholder Communication Department by calling (604) 684-6365:

|(i)   | this Annual Information Form, together with any document
      incorporated herein by reference;                                                                                                                                      
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                       
|(ii)  | the Annual Report of the Company and any interim
      financial statements filed with Securities Commissions subsequent to the
      audited financial statements for the Company's most recently completed
      financial year; and
|      |                                                                                                                                                                                                                                       
|(iii) | the Proxy Circular for the May 2007 annual general
      meeting of the Company.                                                                                                                                                      

The Company may require the payment of a reasonable charge from
persons, other than security holders of the Company, requesting copies of these
documents.

|ITEM 18 | DISCLOSURE
      FOR COMPANIES NOT SENDING INFORMATION
  CIRCULARS
|------- | ------------------------------------------------------------------

Not applicable.

---

- 47 -

|ITEM 19. | CONTROLS AND
      PROCEDURES
|-------- | -----------------------------

Internal Controls over Financial Reporting
Procedures

The management of the Company is responsible for establishing
and maintaining adequate internal controls over financial reporting. The
Companys internal control system was designed to provide reasonable assurance
to the Companys management and the board of directors regarding the preparation
and fair presentation of published financial statements. Internal control over
financial reporting includes those policies and procedures that: (1) pertain to
the maintenance of records that in reasonable detail accurately and fairly
reflect the transactions and dispositions of the assets of the Company (2)
provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with GAAP, and that
receipts and expenditures of the Company are being made only in accordance with
authorizations of management and directors of the Company and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the Companys assets that could have a
material effect on the financial statements. All internal control systems, no
matter how well designed, have inherent limitations. Therefore, even those
systems determined to be effective can provide only reasonable assurance with
respect to financial statement preparation and presentation.

The Companys management, with the participation of the Chief
Executive Officer and the Chief Financial Officer, has evaluated the
effectiveness of internal control over financial reporting based on the
framework and criteria established in Internal Control  Integrated Framework,
issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Based on this evaluation, our management has concluded that internal control
over financial reporting was effective as of February 29, 2008 to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements in accordance with GAAP.

Disclosure Controls and Procedures

As of the end of the period covered by this report, our
management carried out an evaluation, with the participation of our Chief
Executive Officer and Chief Financial Officer, of the effectiveness of our
disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e)
under the Securities Exchange Act of 1934 (the Exchange Act)). Based
upon that evaluation, our Chief Executive Officer and Chief Financial Officer
concluded that, as of the end of the period covered by this report, our
disclosure controls and procedures were effective in recording, processing,
summarizing and reporting, on a timely basis, information required to be
disclosed in reports that we file or submit under the Exchange Act.

While our Chief Executive Officer and our Chief Financial
Officer believe that our disclosure controls and procedures provide a reasonable
level of assurance of effectiveness, they do not expect that our disclosure
controls and procedures or internal control over financial reporting will
prevent all errors and fraud. A control system, no matter how well conceived or
operated, can provide only reasonable, not absolute, assurance that the
objectives of the control system will be met.

---

- 48 -

|ITEM 20. | AUDIT COMMITTEE, CODE OF
      ETHICS, ACCOUNTANT FEES AND **EXEMPTIONS**
|-------- | -------------------------------------------------------------------------

A. AUDIT COMMITTEE FINANCIAL EXPERT

The members of the audit committee are Messrs. Rene G. Carrier,
Douglas Silver and Patrick Bartlett. Mr. Carrier, Mr. Silver and Mr. Bartlett
are independent members of the audit committee. All members are considered to be
financially literate.

A member of the audit committee is independent if the member
has no direct or indirect material relationship with the Company. A material
relationship means a relationship which could, in the view of the Companys
Board of Directors, reasonably interfere with the exercise of a members
independent judgment.

A member of the audit committee is considered financially
literate if he or she has the ability to read and understand a set of financial
statements that present a breadth and level of complexity of accounting issues
that are generally comparable to the breadth and complexity of the issues that
can reasonably be expected to be raised by the Company.

B. CODE OF ETHICS

The Company has adopted a code of ethics that applies to all
personnel of the Company. A copy of the Code of Ethics, which is included as a
part of the Companys Governance Policies and Procedures Manual, is available on
the Companys website at www.rockwelldiamonds.com.

C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table discloses the aggregate fees billed for
each of the last two fiscal years for professional services rendered by the
Company's audit firm for various services.

|                      |   | Year ended        |  |   | Year ended         | 
|--------------------- | - | ----------------- |  | - | ------------------ | 
|Services:             |   | February 29, 2008 |  |   | May
      31, 2007 | 
|Audit Fees            | $ | 150,000           |  | $ | 214,400            | 
|Audit-Related Fees(1) |   | 130,000           |  |   | NIL                | 
|Tax Fees              |   | 7,500             |  | $ | 3,500              | 
|All Other Fees        |   | -                 |  |   | NIL                | 
|                      | $ | 287,500           |  | $ | 220,900            | 

|Note: | (1) "Audit-Related Fees" include services that are
      traditionally performed by the auditor. These audit-related services
      include employee benefit audits, due diligence assistance, accounting
      consultations on proposed transactions, internal control reviews and audit
      or attest services not required by legislation or regulation.
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Management of the Company requests approval from the audit
committee for all audit and non-audit services to be provided by the Company's
auditors. The audit committee pre-approves all such services with set maximum
dollar amounts for each itemized service. During such deliberations, the audit
committee assesses, among other factors, whether the services requested would be
considered "prohibited

---

- 49 -

services" as contemplated by the US Securities and Exchange
Commission, and whether the services requested and the fees related to such
services could impair the independence of the auditors.

|ITEM 21. | OFF BALANCE SHEET
      ARRANGEMENTS
|-------- | ------------------------------------

None.

|ITEM 22. | TABULAR DISCLOSURE OF
      CONTRACTUAL OBLIGATIONS
|-------- | ---------------------------------------------------

Payments due by periodTotal
    Less than one year
    1 to 3 years
    3-5 years
    More than 5 yearsContractual
      obligation
    Nil
    Nil
    Nil
    Nil
    NilLong term debt
      obligations (1)
    16.9m
    8.4m
    8.5m
    Nil
    NilOperating lease
      obligations
    Nil
    Nil
    Nil
    Nil
    NilPurchase
      obligations
    Nil
    Nil
    Nil
    Nil
    NilOther
    Nil
    Nil
    Nil
    Nil
    NilTotal
    Nil
    Nil
    Nil
    Nil
    Nil


The term purchase obligation means an agreement to purchase
goods or services that is enforceable and legally binding on the registrant that
specifies all significant terms, including: fixed or minimum quantities to be
purchased; fixed, minimum or variable price provisions; and the approximate
timing of the transaction.

(1) The Companys long term debt obligations are
denominated in South African Rand (ZAR). Payments and settlement on the
obligation is denominated in ZAR. Long term obligations have been presented at
an exchange rate of 1 Canadian dollar = 7.91 ZAR.

---