Pala Investments Makes Premium Offer To Acquire All Shares of Rockwell Diamonds Inc.

Pala Investments Holdings Limited ("Pala") announced today that, through an indirect wholly owned subsidiary, it is making an offer of $0.36 per share in cash to acquire all the outstanding common shares of Rockwell Diamonds Inc. ("Rockwell", TSX: RDI, JSE:RDI, OTCBB: RDIAF).

The offer includes the rights associated with the common shares under the Rockwell shareholder rights plan, but not other rights, options or warrants.

At $0.36 per share, the offer is valued at $85.7 million and represents a premium of approximately 84.6% over the closing price of the Rockwell common shares on the Toronto Stock Exchange on September 8, 2008, the last trading day prior to the announcement of the offer. It also represents a premium of approximately 83.5% over the volume-weighted average trading price of Rockwell shares on the TSX during the last 20 days on which it has traded.

Pala has purchased shares of Rockwell over the past year and currently beneficially owns approximately 19.9% of the company's outstanding shares.

"This all-cash offer provides other Rockwell shareholders with a substantial premium and significant value certainty for their investment," said Joseph Belan, Managing Director of Pala Investments AG, advisor to Pala. "It is the culmination of our efforts in recent months to convince the management and Board of Directors of Rockwell to pursue a range of value-enhancing options, including Pala's recent friendly offer to acquire the company. No action was taken on any of these options, leaving us with no alternative but to take this offer directly to Rockwell shareholders."

The offer expires at 5:00 p.m. Vancouver time, November 10, 2008. It is conditional on, among other things, a sufficient number of Rockwell shares being validly deposited under the offer and not withdrawn that, combined with the number of Rockwell shares then owned by Pala and its affiliates, would represent not less than 66 2/3% of the then-outstanding Rockwell shares, on a fully-diluted basis.

It is also conditional on Pala being provided with information relating to Rockwell and its subsidiaries and their respective businesses, including access to the management of Rockwell and its subsidiaries by no later than September 24, 2008, as well as Pala being satisfied, upon completion of its review of the information, that there are no facts or other information that might make it inadvisable Pala to proceed with its offer. Pala expects to complete such review within three weeks of the date upon which it is provided access.

In addition, the offer is subject to customary conditions and regulatory approvals. The full terms of the offer and its conditions are included in a takeover bid circular dated September 9, 2008 being filed with Canadian securities regulators today. The circular will be available at www.sedar.com.

Pala has engaged CIBC World Markets as financial advisor and Stikeman Elliott LLP as legal counsel for this transaction.

Based in Vancouver, B.C., Rockwell Diamonds Inc. owns interests in alluvial diamond projects and properties in South Africa and the Democratic Republic of Congo.

Pala Investments Holdings Limited, based in Jersey, Channel Islands, is a US$1.2 billion multi-strategy investment company with a particular focus on mining and natural resource companies in both developed and emerging markets. Pala Investments' exclusive investment advisor, Pala Investments AG, is a Switzerland-based team with extensive experience within the mining and natural resource sectors. Pala Investments seeks to assist companies in which they have long-term shareholdings by providing strategic advice and innovative financing solutions.

This press release contains summary information only about the bid by Pala. Complete information about the bid can be obtained by referring to the offer and take-over bid circular filed today with Canadian securities regulators.

Certain statements in the press release are forward-looking statements and are prospective in nature. Forward-looking statements are not based on historical facts, but rather on current expectations and projections about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. These statements generally can be identified by the use of forward-looking words such as "may", "should", "will", "could", "intend", "estimate", "plan", "anticipate", "expect", "believe" or "continue", or the negative thereof or similar variations. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Important factors that could cause actual results to differ materially from the expectations of Pala include, among other things, general business and economic conditions globally or in particular geographic regions in which Rockwell and its subsidiaries conduct business, the failure to meet certain conditions of the Offer, the inability to attract and retain qualified employees, competition, regionally and internationally, changes in law, disruptions in business operations due to reorganization activities, and interest rate and foreign currency fluctuations. Such forward-looking statements should therefore be construed in light of such factors, and Pala is not under any obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Information concerning Rockwell contained in this press release and has been taken from, or is based upon, publicly available information and records on file with Canadian securities regulatory authorities and other public sources. Rockwell has not reviewed this press release and has not confirmed the accuracy and completeness of the information in respect of Rockwell contained herein. Although Pala has no knowledge that would indicate that any statements contained herein concerning Rockwell taken from or based on such documents and records are untrue or incomplete, neither Pala, nor any of its affiliates, nor any of their respective directors or officers, assumes any responsibility for the accuracy or completeness of such information or for any failure of Rockwell or its directors or officers to disclose events or facts which may have occurred or which may affect the significance or accuracy of any such information but which are unknown to it.

The offer is being made for the securities of a Canadian issuer and the offer is subject to Canadian disclosure requirements. Shareholders should be aware that such disclosure requirements are different from those of the United States.

SOURCE: Pala Investments Holdings Limited

John Lute, Lute and Company, (416) 929-5883