Filed by Automated Filing Services Inc. (604) 609-0244 - Rockwell Ventures Inc.

[ ] REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) or 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934

[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended May 31, 2006 (with other information to November 28, 2006 except where noted)

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

[ ] SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Suite 1020, 800 West Pender Street
Vancouver, British Columbia, Canada, V6C 2V6
(Address of principal executive offices)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act. None

Number of outstanding shares of Rockwell's only class of capital stock as at May 31, 2006.
23,694,776 Common Shares without Par Value

Indicate by check mark if the Registrant is a well known seasoned issuer as defined in Rule 405 of the Securities Act.

If this report is an annual or transition report, indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Indicate by check mark whether Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer or non-accelerated filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12b 2 of the Exchange Act.

Indicate by check mark which financial statement item Registrant has elected to follow:

If this is an annual report, indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b 2 of the Exchange Act):

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether Registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

All monetary amounts contained in this Annual Report are, unless otherwise indicated, expressed in Canadian dollars. On May 31, 2006 the Bank of Canada noon rate for Canadian Dollars was US$1.00:Cdn$ 1.1015 (see Item 3A for further historical Exchange Rate Information).

Except for statements of historical fact, certain information contained herein constitutes “forward-looking statements” including, without limitation, statements containing the words “believes,” “anticipates,” “intends,” “expects” and words of similar import, as well as all projections of future results. Such forward-looking statements involved known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Rockwell to be materially different from any future results, performance or achievements of Rockwell expressed or implied by such forward-looking statements. Such risks are discussed in Item 3D “Risk Factors.” The statements contained in Item 4B “Business Overview”, Item 5 “Operating and Financial Review and Prospects” and Item 11 “Quantitative and Qualitative Disclosures About Market Risk” are inherently subject to a variety of risks and uncertainties that could cause actual results, performance or achievements to differ significantly.

The following table summarizes selected consolidated financial data for Rockwell Ventures Inc. (the “Company” or “Rockwell” or the "Registrant") for the last five fiscal years ended May 31, 2006, in Canadian dollars, presented in accordance with Canadian generally accepted accounting principles (“Cdn GAAP”). Additional information is presented to show the differences which would result from the application of United States generally accepted accounting principles (“US GAAP”) to the Company’s financial information. Refer to note 11 to the consolidated financial statements included herein for a discussion of the material differences between Cdn GAAP and US GAAP and their effect on the Company’s financial position and results of operations. The information in the table was extracted from the detailed consolidated financial statements and related notes included in this annual report, and should be read in conjunction with such financial statements and with the information appearing under the heading, “Item 5. Operating and Financial Review and Prospects.”

⁽¹⁾Loss from continuing operations and loss for the year are the same for all periods presented.

Except as otherwise indicated, all dollar amounts are stated in Canadian dollars, Rockwell’s functional and reporting currency, unless otherwise stated. The following table sets out the exchange rates, based on the noon rates as reported by the Bank of Canada, for the conversion of United States dollars into one Canadian dollar in effect at the end of the specified periods, the average exchange rates during such

periods (based on daily noon rates as reported by the Bank of Canada) and the range of high and low exchange rates for such periods:

The following table sets out the high and low exchange rates, based on the noon rate as reported by the Bank of Canada, for the conversion of Canadian dollars into one United States dollar, for the following periods:

Exchange Rates
	High	Low
March 2006	0.8832	0.8530
April 2006	0.8982	0.8533
May 2006	0.9099	0.8902
June 2006	0.9099	0.8893
July 2006	0.9041	0.8760
August 2006	0.9037	0.8838
September 2006	0.9047	0.8871
October 2006	0.8966	0.8783
November 2006	0.8868	0.8715

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.

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.

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 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.

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.

Rockwell has been an exploration stage mining company with a history of operating losses and no assurance of revenues

Rockwell has been an exploration stage company whose operating history has been restricted to the acquisition and exploration of properties for mineral deposits. This does not provide a meaningful basis for an evaluation of Rockwell’s prospects if it ever determines that it has a mineral reserve and commences the construction and operation of a mine. Rockwell has, to date, no revenue from operations and a history of net losses resulting in an accumulated deficit of over $13.2 million at May 31, 2006.

Rockwell expects to continue to incur significant losses into the foreseeable future. There can be no assurance that Rockwell will be successful in finding an economic ore body, and therefore there can be no assurance that Rockwell will ever be able to earn revenues.

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 May 31, 2006 working capital deficit was approximately $0.9 million. Rockwell’s cash resources are currently not sufficient to continue operations at current levels. There can be no assurance that additional financing will be available to Rockwell when needed or, if available, that it can be obtained on commercially reasonable terms.

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.

If Rockwell fails to raise sufficient financing to meet its ongoing cash needs, it will be forced to scale down or perhaps even cease the operation of its business, which may result in the loss of some or all of your investment in Rockwell’s common stock.

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.

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 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 common 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 Ronald W. Thiessen, Rockwell’s Chief Executive Officer, and Jeffrey R. Mason, 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 Chile, South Africa and the Democratic Republic of Congo, and its operations there may be affected by varying degrees of political and economic uncertainties.

Rockwell’s properties are located in Chile, South Africa and the Democratic Republic of Congo, and mineral exploration and mining activities there 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.

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 an 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 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.

Congo has been the subject to significant political and civil unrest. In 1992, Congo 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. Congo 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 Congo. However, the IMF and World Bank noted that Congo 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 Congo will not be affected in the future by political and economic instability, terrorism, crime, extreme fluctuations in currency exchange rates and inflation.

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.

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.

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

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 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 November 28, 2006, Rockwell had a significant number of share purchase options (462,917) and warrants (42,000,000), 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 63% of Rockwell’s currently issued shares.

As provided in the Definitive Agreement, Rockwell will also execute a definitive agreement in relation to the acquisition of control of the mineral rights relating to the Galputs Mineral Project.

Rockwell’s Ricardo Property is located along the West Fissure fault in 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.

In June 2006, Rockwell entered into the Agreement in Principle to acquire interests and/or rights in the Holpan/Klipdam Property, the Wouterspan Property and Galputs Minerale Project in South Africa, and the Kwango River Project in the DRC. In November 2006, Rockwell and the Vendors of Durnpike executed the “Definitive Agreement”, setting out the binding terms and conditions of the Acquisition in line with the Agreement in Principle. The Company has received the necessary regulatory approvals in Canada and South Africa and all conditions of such approval have been fulfilled. The Acquisition was completed in November 2006. Pursuant to the Definitive Agreement, Rockwell will acquire all of the shares and shareholder loans in Durnpike from the Vendors for the consideration set forth below, payable in Common Shares at a deemed issue price per share equal to the closing price of the Common Shares on the TSX Venture Exchange on June 29, 2006, being the trading day immediately preceding the issue of a press release by Rockwell announcing the acquisition. The consideration is payable on the dates described below.

Durnpike holds or is in the process of acquiring an interest and/or rights in four alluvial diamond properties, the Holpan/Klipdam Operation, the Wouterspan Operation, the Galputs Project and the Kwango River Project, all situated in Southern Africa.

Rockwell intends to seek a secondary listing of its share capital on the Johannesburg Stock Exchange in South Africa (“the JSE Inward Listing”) (An inward listing is a South African term for a company that is already listed on a stock exchange outside of the country and will be seeking an additional listing in South Africa).

As provided in the Definitive Agreement, Rockwell will execute a definitive agreement in relation to the acquisition of control of the mineral rights relating to the Galputs Minerale Project.

All Common Shares issued to the Vendors pursuant to the Acquisition will be held in escrow for at least 12 months from the date of issuance, provided that a limited portion of those escrowed Common Shares may be released to enable the Vendors to meet specified government regulatory obligations.

The Holpan/Klipdam property and the Wouterspan property, are indirectly owned by the H.C. Van Wyk Diamante Trust (“Van Wyk Trust”), a business trust registered in RSA. Van Wyk Trust holds 99% of HC Van Wyk Diamonds (Pty) Ltd (“HCVW”), a private RSA company (the remaining 1% owned by the Van Wyk Trust nominees), and 99% of Klipdam Mining Company Limited (“Klipdam”), an unlisted RSA public company (the remaining 1% owned by the Van Wyk Trust nominees). HCVW and Klipdam, are collectively referred to as The Van Wyk Diamond Group of companies (“VWDG”). VWDG is an independent diamond producer that conducts diamond exploration and mining on the Holpan/Klipdam property, which VWDG owns, and also conducts contract mining on the Wouterspan Property, over which HCVW holds options to acquire title.

Durnpike completed the acquisition of an initial 49% of the issued and outstanding shares of HCVW and 51% of the issued and outstanding shares of Klipdam (the “Acquisition Interest”) prior to July 7, 2006. To acquire the Acquisition Interest, Durnpike will pay the Van Wyk Trust ZAR50 million (US$6.8 million) on closing and ZAR30 million (US$ 4.1 million) on the one-year anniversary of the closing. Durnpike has an option to increase its shareholding in HCVW to a 51% control interest, upon obtaining necessary South African regulatory and corporate approvals, by subscribing for additional shares in HCVW in an amount of ZAR1 million (US$0.14 million) and obtaining the requisite corporate approvals for the introduction of a ZAR24 million (US$3.3 million) working capital loan into VWDG.

Rockwell also entered into an Exchange agreement with the Van Wyk Trust in terms by which it was granted a call option, and granted a corresponding put option to the Van Wyk Trust, to acquire an additional 23% of VWDG for ZAR60 million (US$8.2 million), payable in Common Shares. The Exchange shall become effective upon Rockwell having completed the JSE Inward Listing. It is expected that a Black Economic Empowerment company will acquire a 26% interest in VWDG. Talks with specific parties are well advanced.

Rockwell does not have full-time management or employees. Hunter Dickinson Inc. ("HDI") provides management services to Rockwell, pursuant to a geological and administrative services agreement dated January 1, 2001. HDI is one of the larger independent mining exploration groups in North America and employs or retains approximately 90 staff or service providers substantially on a full-time basis. These individuals include professional technical staff (which include accredited professional engineers and geoscientists), professionally accredited accountants (the majority of whom have professional accreditations); and administrative, office and field support staff.

HDI has supervised mineral exploration projects throughout Canada and internationally in Brazil, Chile, China, the United States (Nevada and Alaska), Mexico and South Africa. HDI allocates the costs of staff input into projects based on time records of involved personnel. Costs of such personnel and third party contractors are billed to the participating public companies on a full cost recovery basis (inclusive of HDI staff costs and overhead) for amounts that are considered by Rockwell's management to be competitive with arm’s-length suppliers. The shares of HDI are owned equally by each of the participating corporations (including Rockwell) as long as HDI services are being provided. However, should the Company terminate the service agreement, the Company will be required to surrender its single share at the time of termination pursuant to the terms of the service agreement. HDI is managed by certain directors of Rockwell and who are generally also directors of the other corporate participants in similar arrangements with of HDI.

Rockwell is based in British Columbia, Canada. As at May 31, 2006, Rockwell had the following subsidiaries:

Immediately upon the completion of the Acquisition described in Item B. Business Overview – Alluvial Diamond Properties, the organization structure of Rockwell changed to:

Rockwell has no plant or equipment located on any of its properties as at May 31, 2006.

Glossary: In this Annual Report on Form 20-F, the following terms have the meanings set forth herein:

Metric Units	Multiply by	Imperial Units
hectares	2.471	= acres
meters	3.281	= feet
kilometers	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

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.

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 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 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.

The renewed interest by the international mining industry in the Congo has been as a result of the 2003 implementation of the new Congo 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 Licence must submit an environmental impact study (EIS) together with an environmental management plan for the project (EMPP), and obtain the approval of his EIS and EMPP, as well as implement the EMPP.

The Exploitation Licence 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 licence has been granted. In addition, it entitles the licence holder, without restriction, to

As long as a Perimeter is covered by an Exploitation Licence, 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 Licence has refused to provide his consent to open a quarry within the Perimeter may submit an application for Quarry Exploitation Licence over part of the Perimeter which is the subject of the Exploitation Licence 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.

The following disclosure is derived from Rockwell files and technical reports. Additional details can be found in technical reports by RH De Decker, Pr.Sci.Nat., filed on www.sedar.com.

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. “Inferred resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or 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.

Figure 1 shows the location of the Holpan/Klipdam, Wouterspan and Galputs properties located in the Republic of South Africa (“RSA” or “South Africa”).

The Holpan/Klipdam property is located 45 km from Kimberley, in the Northern Cape Province, in central South Africa.

The property has ready access to all required infrastructure. Given that the operations are located next to an irrigation canal, the operations have year-round water supply and the necessary pumping stations and water supply pipelines are 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.

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.

Company	Property Name	Area (ha)	Mineral Right	Permit Number	Renewal Date
HC van Wyk Diamonds Pty Ltd	Remaining extent of farm Holpan 161, Barkly West	2370.0518	Mineral Lease K55/2000S	ML 1/2002	09 November 2014
Klipdam Diamond Mining (Pty) Ltd	Remaining extent of the farm Klipdam 157, Barkly West	1466.0095	Mineral Lease K54/2000RM	MP 86/2002	06 June 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. A favourable response is expected.

Holpan and Klipdam have been the focus of intermittent mining since the early 1900’s and have consistently been known for yielding large diamonds. There are regular references to this in historic records such as the work of George Beet (1931), who discusses the ‘Broderick’ diamond – a perfect Cape white, weighing 412.5 carats. HC Van Wyk Diamonds (“HCVWD”) has produced in excess of 90,000 carats of diamonds from Holpan and Klipdam since 1994. The Klipdam Mining Company has produced 18,333 carats between July 1996 and February 1999 from the Klipdam Farm.

The work conducted from 1994 to date at Holpan-Klipdam comprises extensive mining of Rooikoppie and Primary gravels, drilling and bulk testing. Since August 2005, the majority of processing has been undertaken using a state of the art, high efficiency 200 tonnes per hour (tph) Dense Media Separation plant with X-ray Flowsort recovery and grease table final recovery apparatus. A large new earth moving fleet, comprising 41 units of Volvo and Komatsu equipment, currently moves 159,000 cubic meters (m³) of gravel and overburden on a monthly basis.

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 “Rookoppie” 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 shales and diamictites of the 300 to 250 Ma 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 so these features 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.

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.

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 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.

As of January 2006 the drilling program, supported by trial mining test work and field observation, has outlined gravel volumes of approximately 7,500,000 m³for the Rooikoppie unit and 4,300,000 m³for the Primary unit on the Holpan-Klipdam properties.

The production and survey data obtained from HCVWD have been accepted following on-site observation of mining and treatment processes, extended discussions with company personnel and detailed presentations by Managing Director as well as other individuals responsible for the compilation of the state diamond logs.

According to historic records for the period beginning October 1994 and ending December 31 2005, a total of 90,292.11 carats of diamonds with a total sale value of US$63,722,121 have been recovered from the Holpan-Klipdam properties by HCVWD. Given that no volumetric data are available for this period, it is not possible to estimate a grade for this period. At least 3,267,400 m³ of gravel has been bulk sampled or mined within the Holpan-Klipdam properties by HCVWD between June 2003 and December 31 2005. Systematic and professional surveying information are available for this period.

Geological continuity for both the Primary gravels and the Rooikoppie gravels has been established and demonstrate the continuity of diamond mineralization along these alluvial diamond “runs” and within the defined resource area. A simple aggregated global average diamond grade of 1.16 carats per 100 m³ is implied. When evaluated on a the basis of a 6-month rolling weighted average for the same period, grade ranges from 0.89 carats per 100 m³ to 1.93 carats per 100 m³. Therefore, the estimated grade of 1.16 carats per 100 m³ is considered to be conservative.

Diamond values presented in this report represent information collated from actual diamond sales concluded by HCVWD. They are determined by an official tender process whereby goods are cleaned, sorted and parcelled into different sizes and categories (either individually, which is typical for larger stones, or collectively for smaller stones) before being shown to registered buyers who make sealed offers

on the different diamond parcels. Typically, diamonds are sold to registered local and international buyers who offer the best price on a parcel. This process is underpinned by professional valuation of the stones to arrive at a reserve or market price prior to tender and the entire process is conducted through officially registered diamond marketing facilities or ‘bourses’. Strict adherence to the Kimberley Process is maintained throughout the mining, recovery, marketing and sales process.

For the period June 2003 to December 2005 (for which survey information is available and the data on which the grade has been estimated) the average weighted diamond value is US$848 per carat.

Using stone-by-stone weight records compiled by HCVWD production staff for the period January –April 2006, a diamond size-frequency distribution analysis was carried out in order to gain a better understanding of the diamond population present at Holpan-Klipdam. This approach was used to predict the frequency with which large stones would be expected to be present at Holpan-Klipdam. This is of key importance as a small number of large, high value stones can significantly increase the value of production. When compared to nearby properties such as Zoutpan, Riverview and Pniel, there appears to be a significant population of large stones, possibly representing a distinct kimberlitic source or a higher degree of fluvial sorting.

The continuity of the geology and mineralisation, together with the degree of confidence in grade and stone value are considered sufficient to classify the diamondiferous gravels, as an inferred resource. The production information used to support this contention covers a mined volume of 3,267,400 m³ and a total of 37,809 carats. The drilling information is deemed sufficiently dense, accurate and clearly defined to support this classification. Although reconciliation of carats produced to volumes mined is only possible in a global sense, RH De Decker, Pr. Sci. Nat., the independent Qualified Person responsible for the resource estimate, is of the opinion that it constitutes an inferred resource.

It is also estimated that 4,800,000 m² of gravel, that is similar, visually, to the Rooikoppie gravels, surrounds the area of the inferred resource. While this gravel feature is readily identifiable from the prevalent red chert clasts (Pebbles) in the regolith and abandoned artisanal workings, as well as vegetation features discernable from aerial photography, its diamond content should be independently evaluated to determine whether a classifiable resource exists. It is Mr. De Decker’s opinion that the classified resource base could be expanded significantly by a limited but systematic program of pitting and sterile bulk testing trenching.

The property hosts an extensive alluvial diamond deposit. An estimated inferred resource of 12,000,000 m³ of diamondiferous gravel with a grade of 1.16 carats per 100 m³ and a mean value of US$848 per carat (as assessed from production records) has been identified on the property. RH De Decker, Pr. Sci Nat., is the independent Qualified Person responsible for the resource estimate.

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.

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. The property is connected to the national electricity grid. 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.

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.

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. H.C. Van Wyk Diamante (HCVWD) has concluded prospecting and option agreements to purchase the two companies Farhom Mining and Construction Limited and Okapi Diamonds (Pty) Limited together with their surface and mineral rights holdings at Wouterspan. These are described below:

Company	Property Name	Area (ha)	Permit Number	Expiry Date
Farhom Mining and Construction Limited	Portion 16 (a portion of Portion 9) of Lanyon Vale 376	188.7926 hectare	Mining Permit No. 144/2004	29 April 2006*
Okapi Diamonds (Pty) Limited	Remainder of Portion 9 (Wouter) of Lanyon Vale 376	780.61 hectare	Prospecting Permit No. PP 86/2004	29 April 2006*

*Both permits expired on April 29 2006, but a renewal application has been lodged and a favourable response is expected.

The first diamond discovered in South Africa was about 75 km upstream of Wouterspan on the Middle Orange River (“MOR”). This discovery 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. Subsequently, the MOR has not seen much prospecting and mining activity until relatively recently. The reasons for this are twofold: a) 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 b) 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.

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 R28 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 work indicated that the size of the gravel deposits at Wouterspan could be at least 30 million tonnes. Based on the trial mining project that had commenced in April 2005, a targeted recoverable diamond grade is in the order of 0.4 - 0.5 carats per hundred tons.

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 shales 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 centimetres 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 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.

Given that the terrace extends beyond the boundary of the Wouterspan properties, the entire property is considered prospective. The thickness and distribution of the alluvial gravel deposits have been investigated through systematic percussion drilling. Geological logging and surveying of all boreholes has been undertaken and has been used in the construction of a geological model, which has itself been used as a guide to trial mining operations.

Quantitative reconciliation and modeling of grade is not possible through the analysis of drill data. The only way to establish diamond presence and grade is through trial mining operations.

The purpose of the trial mining was to: (i) expose the gravels in section over a wide lateral area in order to gain a better understanding of the sedimentology and (ii) to process sufficient gravel to be able to determine the diamond grade of the gravels and lateral consistency thereof. 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 by HCVWD during trial mining operations. Trial mining locations were selected by HCVWD according to the most well-developed gravel assemblages (both laterally and vertically) as identified by the drilling program and a series box-cuts were excavated. Currently operations are taking place on two portions of the property called Farhom and Okapi farms.

Drilling and trial mining indicate that the property hosts an extensive alluvial deposit with a large average stone size within the Rooikoppie and Primary gravel units. The work to date on the Wouterspan Project has established the presence of diamondiferous gravels, but without having determined a mineral resource.

A drilling program, conducted in 2005 by VWDG at Wouterspan, identified 4,481,000 m³ of Rooikoppie Gravel and 43,259,000 m³ of Primary Gravel. In trial mining operations, 2,868 carats of diamonds have been recovered from 514,000 m³ of Primary and 24,000 m³ of Rooikoppie gravel.

Diamonds of exceptional value have been recovered from this property, including the recent discovery of a 157 carat stone that sold for approximately US$5.7 million at official tender.

A budget of CDN$5 million has been proposed, to be used for bulk sampling and purchase or replacement of equipment for the Wouterspan operations, as summarized below:

Description	Amount (CDN$)
Further drilling, geologic interpretation and compilation	$600,000
Additional bulk sample activities including test process plant additions	$1,300,000
Trial mining operation (including equipment addition) based on operational planning with regard to exercising the Farhom and Okapi options	$2,300,000
General environmental	$400,000
Geological and engineering, operational planning including supervision	$400,000

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 Ma. The first diamonds from the Koa Valley were discovered at Galputs in 1936.

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

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

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

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 The Galputs Project. Durnpike conducts contract mining operations at The Galputs Project. Rockwell will acquire, for nominal consideration, all of the outstanding shares of Virgilia from Marla Trust and make a payment as set out in (c) above under acquisition.

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

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.

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 and the average selling price since March 2002 has been US$388. An estimation of the potential gravel resource contained within the Galputs licence area was completed in 2002.

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 Quarternary 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 centimetres to about 1 metre 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.

Exploration by Galputs Minerale comprised a drilling programme 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 trial mining 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 have been 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 modelling of the drill results was carried out to make an initial estimate of resources volumes and tonnages.

Based on the initial focussed drilling programme and computer modelling, the following estimates of diamondiferous gravels were presented for the Galputs Project:

Northern Pan and Neck Area - a gravel resource of 510,000 tonnes was arrived at for this portion of the deposit.

Main and South Pans - Van Breda (2004) gives an estimate 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 operations indicate the presence of gravel horizons in this area.

Tailings Heaps - There are large tailings heaps located on Galputs which 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.

A budget has been constructed which will allow the Galputs deposit to be tested systematically 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.

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.

A budget of CDN$ 1.7 million is proposed for further exploration and trial mining operations.

Description	Amount (CDN$)
Reverse Circulation drilling programme, 3D modelling, Resource delineation	60,000
Purchase of excavator	430,000
Purchase of front end loader	200,000
Purchase of 2 articulated dump trucks	430,000
Construction and purchase of rotary pan metallurgical treatment plant	100,000
Construction and purchase of mobile X-ray Flow-sort final diamond recovery	480,000

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

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 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.

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 Democratic Republic of Congo comprising approximately 109 square km within Exploitation Permit Number 331 (“PPE331”) held by Midamines SPRL (“Midamines”), a Democratic Republic of Congo company. 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.

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 of 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 numbers of diamonds and easy mining conditions encountered in the West Kasai deposits, emphasis on exploitation of diamonds in the DRC has remained focussed on this area, with areas such as those noted along the Kwango River that have 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.

Midamines has not maintained precise production records of 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.

Aproximately 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.

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 as 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.

A preliminary budget scenario has been compiled for the Kwango 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 CDN$ 7.9 million provisional budget for the initial exploration work and bulk sampling program is:

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

On March 2, 1998, Rockwell received final approval from the TSX Venture Exchange to acquire 100% of the issued and outstanding shares of Minera Ricardo Resources Inc. S.A. (“Ricardo”), in exchange for 22,400,000 shares of Rockwell. Rockwell subsequently transferred a 0.1% interest in Ricardo to 549949 BC Ltd., Rockwell’s wholly-owned British Columbia subsidiary. Ricardo is the owner of 66 exploration and exploitation mining concessions covering an area of approximately 162.5 square km immediately south of the City of Calama, Chile (the “Ricardo Property”).

The Ricardo Property was purchased from Mesquite Resources LLC. Ricardo is the legal owner of the exploration and exploitation concessions comprising the Ricardo Property. Pursuant to Chilean mining law the grant of mining concessions provides the holder with the rights to the mineral substances within a concession but not the surface rights. Concession holders are initially granted exploration concessions having a two-year term and are required to pay annual taxes to keep the concession in good standing. Subject to being able to apply to have one-half of an exploration concession renewed for a further two years an exploration concession holder must, prior to the end of the initial two year term, apply to convert the exploration concession to an exploitation concession and as part of such process cause the concession to be surveyed. Exploration concessions and exploitation concessions are subject to forfeiture in the event the holder fails to pay annual taxes. Rockwell has received a legal opinion from Chilean legal counsel confirming that Ricardo has good title to the Ricardo Property.

The following discussion represents management’s understanding based on discussions with its personnel and consultants in Chile. In 1989 Chile completed the transition from a military government to democracy with Christian Democrat Party leader Patricio Alwyn taking office as President in March 1990 after winning

a majority in nationwide elections held in December 1989. A second democratic election held in December 1993 resulted in the government led by President Eduardo Frei. In March 2000, Ricardo Lagos was elected as President of Chile.

Mining has historically been a significant factor in the Chilean economy. Given the history of mining in the country, management believes that Chile has the infrastructure and trained personnel required for modern mining operations.

Management believes that the labor situation in Chile is currently relatively stable, with a low incidence of strike action, particularly in the private sector.

There are currently no significant restrictions on the repatriation from Chile of earnings to foreign entities. Foreign entities have the right to repatriate from Chile their earnings after payment of all Chilean tax, including a tax on the amount of earnings distributed to foreign persons by way of a dividend. Chile does not currently have a tax treaty with the United States.

The Ricardo mineral property is located immediately south of the City of Calama, Chile at elevations of 2,400 to 2,600 meters. The area is accessed by Highway 25 from the port city of Antofagasta, located 205 kilometers to the southwest (Figure 3).

The Corporación Nacional del Cobre de Chile (“Codelco”), the Chilean national copper company, is currently erecting housing and other infrastructure, as part of a relocation of its workers for its Chuquicamata project, in certain areas of the Ricardo Property. Rockwell believes this construction usurps Ricardo's constitutional mining rights. Accordingly, in order to preserve access to its mineral

concessions, in November 2002 Ricardo applied for several easements on its Ricardo Property to prevent Codelco from further developing its construction project over Ricardo's mining rights. On June 28, 2006, the application for the easements was denied by the Supreme Court of Chile.

Figure 4 below illustrates the exploration and exploitation concessions controlled by Ricardo, covering an area of approximately 16,250 hectares:

In 1988, Dr. Richard Baker and Jay Fuller acquired control of the Ricardo Property. A series of geological and geophysical programs, including limited drilling, were subsequently carried out on the property.

In July-December, 1991, Codelco drilled 10 vertical rotary holes and one vertical diamond drill hole in the western portion of the Ricardo concession area. Total depths of the 11 drill holes ranged from 167 to 606 meters. Five of the holes of the program failed to penetrate bedrock. Spot core and rotary hole samples of alluvial material contained erratic anomalous copper and zinc values. In February 1992, Codelco terminated its agreement with Ricardo.

Freeport McMoRan Copper Company (“Freeport”) executed an Option to Purchase Agreement with Ricardo in 1992 and commenced a drilling program in early 1993. During the period January 1993 through May 1994, a total of 5,095 meters were drilled in one diamond core and 13 rotary holes with spot coring. Six of the 11 Freeport holes that may have been drilled to bedrock encountered steep fault zones at their bottoms. Two of the other five holes were logged as having drilled into barren bedrock. A number of Freeport drill

hole samples contained anomalous copper and zinc values. Detailed descriptions of Freeport drill hole RF-6 refers to bedrock as consisting of “leached capping” composed of “sheared, oxidized and leached, intensely altered, coarse-grained porphyry” as evidenced by rotary hole cuttings commencing at 138 meters and continuing to about 428 meters. This is an impressive thickness of alteration, although the fragments may be extraneous material within a thick section of fault gouge penetrated by the drill hole. If the cuttings are truly representative of bedrock, the area warrants additional drilling. It is also significant that the relatively shallow bedrock surface in RF-6 (138 meters) may indicate a buried topographic high related to a leached, and possibly mineralized, porphyry body.

Freeport contracted two geophysical studies in 1993 including compilation of a composite gravity map. The gravity study report describes a major structure striking northwest-southeast immediately north of the Ricardo mineral holdings. Gravity, magnetic and very low frequency-electromagnetic (VLF-EM) geophysical surveys, conducted on the property in July 1993, were designed to delineate structural trends and to identify areas of shallow bedrock occurrences on the Ricardo property.

In 1995, owners of the property negotiated an exploration agreement with International Nickel Company Limited (“INCO”) who drilled a total of 12 holes in two stages during its evaluation. The first six holes drilled by INCO consisted of four, reverse-circulation rotary drill holes targeting gravity highs to the southwest, and two holes in the area drilled by Freeport in the eastern portion of the property. The holes ranged in depth from 268 to 448 meters. None of the holes penetrated bedrock.

The second phase of the INCO drilling program also consisted of six holes, five angled and one vertical combination, of rotary plus coring. All six were drilled approximately two to three kilometers east of Calama to test “irregular areas of high resistivity”. Four of the holes penetrated faulted andesitic volcanics, one hole intersected a short section of monzonite, and the sixth hole encountered clay-altered granite cut by quartz veins. A sample of the upper portion of the granite section contained a “high molybdenum/copper ratio”.

INCO contracted induced polarization (“IP”) and continuous magnetotelluric surveys to be conducted on the Ricardo property during the term of its exploration agreement. The caliche cover also complicated a continuous magnetotelluric survey, however, the contractor concluded that the survey successfully determined the thickness of the gravels and detected extensions of the West Fissure. INCO did not follow up any of the encouraging geophysical results with drilling as it terminated the agreement with Ricardo in 1996.

In February 2000, Rockwell entered into a letter of intent (the “Letter of Intent”) for an option to purchase agreement on its Ricardo Property with Empresa Minera de Mantos Blancos S.A. (“Mantos Blancos”), a subsidiary of Anglo-American PLC, and Ricardo, by then a wholly owned subsidiary of Rockwell. In July 2000, Mantos Blancos terminated its Option to Purchase Agreement on the Ricardo Property after having completed a 16-drill hole program on a small section of the Property to depths of up to 250 meters.

In January 2004, Ricardo signed a Letter of Understanding with Rio Tinto Mining and Exploration Ltd. (“Rio Tinto”), which contemplated the acquisition by Rio Tinto of a 100% interest in a majority of the claims which make up the Ricardo Property. From April to June 2004, Rio Tinto carried out an exploration program at Ricardo comprising 8 vertical drill holes, totaling 2,296 meters, drilled by reverse circulation or part reverse circulation and part core rigs. The seventh hole was drilled within the West Fault Zone to test the possible southwestward extension of an altered intrusion hosting pyritic mineralization that had been intersected in a previous hole by INCO. It tested a horst block between the east and west faults within the West Fault system, and intersected unaltered Paleozoic rocks. Although Rio Tinto concluded that the alteration system was closed off by the hole, there may be further potential in this area.

Geophysicists from Zonge, a geophysical contractor, conducted a review of existing IP and analogue magnetotelluric (AMT) geophysical images and processed data, and where available, raw data for Rio Tinto to detect mineralized or altered zones beneath the thick gravel cover. Rio Tinto concluded that none of the areas warranted further drilling, although targets associated with the West Fissure Zone remained. In January 2005, Rio Tinto terminated its Letter of Understanding with Rockwell.

The Ricardo Property is situated within the Precordillera of Northern Chile, over a major north-south striking complex zone, locally known as the West Fault system or West Fissure. The oldest units in the area are Paleozoic metamorphosed sedimentary and intrusive rocks; intrusions are associated with copper occurrences. Triassic sedimentary rocks, and rhyolitic to andesitic volcanic rocks overlie the Paleozoic sedimentary and intrusive rocks. From drill hole information, it has been determined that volcanic rocks of dacite composition are the dominant rock type to the east of the West Fault system in the Ricardo area. These units are overlain by Jurassic and Lower Cretaceous sedimentary rocks, then Upper Cretaceous sediments with intercalated volcanic units. In the Ricardo area, the main unit is Lower Cretaceous porphyritic andesite, with intercalated dacites and andesitic breccias. Chuquicamata Porphyry Complex, Toki Cluster and Opache Porphyry and other intrusions in this area are of Eocene and Oligocene age. The sequence was also uplifted and eroded, forming alluvial fan and fluvial sedimentary deposits known in the area as the Calama Formation. These units are covered by Miocene clays, limestones and gravels in the Ricardo area. There is no outcrop on the property.

Seven drilling campaigns have been completed. For details of the sampling procedures see Rockwell’s Form on 20F for 2005.

Drilling programs have tested a number of areas on the Ricardo Property. However, Rockwell believes that a significant potential remains in along the West Fault system in the central part of the property.

A drilling program, consisting of a minimum of four to six angled holes, totaling 2,000 meters, along two east-west lines across the West Fault are proposed to fully test this area. The program would cost approximately US$270,000. Rockwell has deferred further work at Ricardo, while it focuses on its alluvial diamond properties.

In November 2004, Rockwell entered into a Farmout Agreement with Amarc Resources Ltd. (“Amarc”), a company related by virtue of certain directors in common. Pursuant to the agreement with Amarc, Rockwell had to incur $600,000 in exploration expenditures to earn up to 50% interests in the Crystal and Hook projects located in the Cariboo region of British Columbia, and in the M3, M4, M5, Tsil and Kalder projects located in the Prince George region of British Columbia. The companies could then either form a joint venture to jointly fund further exploration on the projects, or Amarc could purchase all or any of Rockwell's earned interests in the projects for the fair value of those interests in cash or shares, as valued at the time of acquisition. In December 2004, Rockwell earned its 50% interests in these properties, but these interests were allowed to lapse during the 2006 fiscal year.

Crystal is located 30 kilometers from 100 Mile House and Hook is near the town of Likely. Preliminary ground surveys, consisting of geological mapping, geochemical sampling and geophysical surveys, were carried out by Amarc prior to the Amarc/Rockwell agreement. Reconnaissance drilling performed under the Amarc/Rockwell agreement on the Crystal property yielded negative results and the property was allowed to lapse. Reconnaissance drilling on the Hook property also yielded negative results, and the Hook property was subsequently vended to Wildrose Resources Ltd., a company holding adjoining claims to the property, in consideration for Wildrose paying for the filing of assessment work and submitting a report to Amarc and Rockwell on the exploration potential of the consolidated claim group. Amarc and Rockwell had an exclusive right for 45 days after receipt of the report to acquire an option to purchase an interest in the consolidated claim group, but this right was allowed to lapse during the 2006 fiscal year.

The M3 to M5 properties, located north of Prince George, were staked by Amarc in 2004. Preliminary geophysics was carried out on M3 and M4 by Amarc. The Tsil and Kalder properties are located north of Fort St James. Amarc carried out preliminary geophysical surveys prior to the Amarc/Rockwell agreement. A number of anomalies were identified and tested by a total of eight drill holes in early 2005. An evaluation of these results was completed and the results did not warrant further exploration by Rockwell. Rockwell held these properties on assessment credits for the purpose of reviewing their potential for joint venture status, but they were allowed to lapse during the 2006 fiscal year.

The following discussion and analysis of Rockwell’s financial condition and results of operations for the three years ended May 31, 2006 should be read in conjunction with the Company’s consolidated financial statements and related notes included in this annual report. The consolidated financial statements included in this annual report were prepared in accordance with Cdn GAAP. For a reconciliation of the consolidated financial statements to US GAAP, see note 11 to the consolidated financial statements.

Rockwell is an exploration stage company whose operating history has been restricted to the acquisition and exploration of properties for mineral deposits. It has not earned any revenues to date. In management's opinion, given that the nature of the Company's business, meaningful financial information consists primarily of the Company's liquidity and solvency.

Rockwell’s consolidated financial statements are prepared on the basis that it will continue operations as a going concern. However, the Company has no revenues and has incurred operating losses since inception. The ability for the Company to continue as a going concern depends on its ability to develop profitable operations and to continue to raise adequate financing to fund exploration activities on its properties. There can be no assurance that the Company will be able to secure the necessary financial resources, nor achieve profitability or positive cash flows. If the Company is unable to obtain adequate additional financing, it will be required to curtail its operations and exploration activities. Furthermore, failure to continue as a going concern may result in the Company not being able to realize the carrying value of its projects and could result in potential losses to the Company’s shareholders. Failure to continue as a going concern would require that the Company's assets and liabilities be restated on a liquidation basis, which would differ significantly from the going concern basis.

Rockwell’s consolidated financial statements are prepared in accordance with Cdn GAAP and reconciled to US GAAP. Amounts are presented in Canadian dollars unless otherwise indicated. Canadian GAAP requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting period. Significant areas requiring the use of management estimates relate to the impairment of mineral property interests, determination of asset retirement obligations and the assumptions used in determining stock-based compensation expense. The Company bases its estimates on historical experience and other assumptions that it believes are reasonable in the circumstances. Actual results may differ from these estimates. During the fiscal period ended May 31, 2006, the Company did not adopt any new accounting policy that would have a material impact on the consolidated financial statements, nor did it make changes to existing accounting policies.

The following critical accounting policies affect the Company’s more significant estimates and assumptions used in preparing its consolidated financial statements:

Under Canadian GAAP, the acquisition costs of mineral properties are deferred until the property is placed into production, sold, or abandoned, or when management has determined that there has been an impairment in value. Acquisition costs which have been deferred will be amortized on a unit-of-production basis, over the estimated useful life of the related property following the commencement of production, or written off if the property is sold, allowed to lapse or abandoned, or written down to fair value when an impairment has been determined to have occurred.

Mineral property acquisition costs include the cash consideration and the fair market value of common shares, based on the trading price of the shares, on the date of issue or as otherwise provided under the agreed terms for the mineral property interest.

Exploration costs are expensed in the period incurred. Recoveries are recorded in the period received.

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable.

In March 2004, the Emerging Issues Task Forces (“EITF”) reached a consensus that mineral interests covered by leases should be considered tangible assets. On April 30, 2004, the FASB issued a FASB Staff Position (“FSP”) amending SFAS 141 and SFAS 142, “Goodwill and Other Intangible Assets”, to provide that certain mineral use rights are considered tangible assets and that mineral use rights should be accounted based on their substance. The FSP is effective for the first reporting period beginning after April 29, 2005, with early adoption permitted.

In March 2004, in its report on “Mining Assets: Impairment and Business Combinations” the EITF reached a consensus that an entity should include the cash flows associated with value beyond proven and probable reserves in estimates of future cash flows (both undiscounted and discounted) used for determining whether a mining asset is impaired under Statement No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”.

Under U.S. GAAP, the recoverability of capitalized mineral properties exploration expenditures are generally considered insupportable until a commercially mineable deposit is determined; therefore, all mineral properties exploration expenditures are expensed as incurred. As the Company does not have reports on proven and probable reserves on any of its mineral properties, all exploration expenditures incurred, other than its acquisition costs, and its other mineral properties have been expensed as incurred.

The Company records the fair value of an asset retirement obligation as a liability in the period in which it incurs a legal obligation associated with the retirement of tangible long-lived assets that result from the acquisition, construction, development, and/or normal use of the long-lived assets. The Company also records a corresponding asset which is amortized over the life of the asset. Subsequent to the initial measurement of the asset retirement obligation, the obligation is adjusted at the end of each period to reflect the passage of time (accretion expense) and changes in the estimated future cash flows underlying the obligation (asset retirement cost).

Under United States GAAP, Statement of Financial Accounting Standards No. 143, "Accounting for Asset Retirement Obligations" ("SFAS 143") requires companies to record the fair value of the liability for closure and removal costs associated with the legal obligation upon retirement or removal of any tangible long–lived asset, effective for years beginning on or after January 1, 2003. Under this standard, the initial recognition of the liability is capitalized as part of the asset cost and depreciated over its estimated useful life. The Company has determined that there were no asset retirement obligations as at May 31, 2006.

For Canadian GAAP purposes, effective June 1, 2004, the Company adopted the provisions of CICA Handbook Section 3110 (“HB3110”). HB3110 requires essentially the same accounting treatment of asset retirement obligations as SFAS 143. Consequently, the Company believes there is no difference in asset retirement obligations under United States GAAP and Canadian GAAP for the Company upon the adoption of this standard, and there is no effect on amounts previously reported.

The Company has determined that there are no material differences in the measurement and presentation of asset retirement obligations between Cdn GAAP and US GAAP as at May 31, 2006 and 2005.

Under Canadian GAAP, short-term marketable securities are carried at the lower of aggregate cost or current market value, with any unrealized loss included in the statements of operations. Long-term investments are carried on the cost or equity basis and are only written down when there is evidence of a decline in value that is other than temporary.

Under US GAAP, Statement of Financial Accounting Standard No. 115, “Accounting for Certain Investments in Debt and Equity Securities” (“SFAS 115”) requires that certain equity investments must be classified into available-for-sale or trading securities and carried at fair market value. Any unrealized holding gains or losses are reported as a separate component of shareholders’ equity until realized for available-for-sale securities, and included in earnings for trading securities. Under SFAS 115, for the years ended May 31, 2006, 2005 and 2004 the Company’s investments in marketable securities would be classified as trading securities and there is no difference between Canadian GAAP and US GAAP.

Rockwell’s annual and quarterly operating results are primarily affected by the level of exploration activity associated with its mineral property interests. Economic factors such as foreign exchange fluctuations, mineral prices and regulatory development may also affect the Company’s operating results and the volatility of the trading price of its common stock. To management’s knowledge, there are no governmental, economic, fiscal, monetary or political policies or factors that have materially affected, or could materially affect, directly or indirectly, the Company’s operations or investments by the Company’s U.S. shareholders. Inflationary factors have not had a material impact on the Company’s operating results for fiscal 2006, 2005 or 2004. The Company’s results of operations are summarized below:

Year ended May 31, 2006 (fiscal 2006) versus year ended May 31, 2005 (fiscal 2005)

The Company had a net loss of $1,600,673 for the 2006 fiscal year compared to a net loss of $1,485,694 for the previous year. The increase in net loss is primarily due to increased expenses in property investigation, travel and conference expenses and stock based compensation. This increase was offset by decreases in exploration expenses (2006 – $307,390; 2005 – $920,902).

Exploration expenses (excluding stock-based compensation) decreased to $307,390 in fiscal 2006 compared to $920,902 in fiscal 2005. This decrease is due to the termination of exploration activities at the Royce Diamond property and various British Columbia properties due to insufficient results to warrant further exploration.

Foreign exchange gains increased to $46,881 in fiscal 2006 compared to a foreign exchange loss of $3,105 in fiscal 2005. Administrative costs for fiscal 2006 increased to $489,014 in comparison to $285,618 incurred in fiscal 2005, primarily due to increased consulting and salary expenses related to the evaluation of properties for acquisition and exploration.

Property investigation expenses (2006 – $399,006; 2005 – $nil) and travel and conference expenses (2006 – $132,647; 2005 – $30,293) increased for the fiscal year 2006 compared to fiscal 2005 as the Company continued to evaluate properties for acquisition and exploration.

Legal, accounting and audit expenses for fiscal 2006 increased to $175,782 in comparison to the $80,078 incurred in fiscal 2005, the increase is primarily related to the evaluation of properties for acquisition.

Write-down of marketable securities decreased to $19,128 in fiscal 2006 from $135,486 in fiscal 2005 due to the decline in the value of Taseko Mines Limited common shares in early fiscal 2006 and the Comwest warrants held by the Company as marketable securities. The Taseko Mines Limited shares were sold during the year for a gain of $55,340.

The Company recorded a write-down of mineral property interests of $46,856 in fiscal 2006 due to the Company’s application for easements on the Company’s Minera Ricardo property being denied by the Chilean law courts.

Stock-based compensation increased to $83,516 in fiscal 2006 from $11,513 in fiscal 2005 due to an increase in the number of options granted during fiscal 2006 (486,250) compared to fiscal 2005 (30,000). Interest income decreased to $2,172 for the fiscal 2006, compared to $17,854 for the fiscal 2005 due to lower cash balances on hand.

Hunter Dickinson Inc. (“HDI”) is a private company with certain directors in common with the Company that carries out investor relations, geological, corporate development, administrative and other management services for, and incurs third party costs on behalf of the Company, on a full cost-recovery basis.

Costs for services rendered by HDI to the Company increased to $578,134 in fiscal 2006, compared to $163,317 in fiscal 2005 due to an increase in administrative activities.

During fiscal 2006, the Company paid nil compared to $1,060 in fiscal 2005 to Gordon J. Fretwell Law Corporation, a private company controlled by a former director of the Company, for legal services.

During the year ended May 31, 2006, the Company paid $18,630 (2005 – $16,164) to Euro-American Capital Corporation, a private company controlled by a director of the Company.

Year ended May 31, 2005 (fiscal 2005) versus year ended May 31, 2004 (fiscal 2004)

The loss for fiscal 2005 increased to $1,485,694 from $1,396,018 in the previous year due to an increase in exploration expenses and a write down of marketable securities. This loss was partially offset by a decrease in stock-based compensation in fiscal 2005.

Exploration expenses (excluding exploration-related stock-based compensation) were $920,902 in fiscal 2005 compared to $525,619 in fiscal 2004. The exploration expenses incurred in fiscal 2005 consisted mainly of $600,000 on the British Columbia properties pursuant to the Company’s farmout agreement with Amarc Resources Ltd., and $279,300 on the Ricardo Property. Exploration expenses incurred in fiscal 2004 were $752,897 for the Royce Claims, which was subsequently terminated, $272,470 on the Ricardo Property, and $200,000 in drilling expenses pursuant to the Company’s farmout agreement with Taseko Mines Limited. Exploration expenses in fiscal 2004 were offset by a recovery of $480,500 and proceeds of $220,000 on the disposal of the interest earned pursuant to the farmout agreement with Taseko Mines Limited.

Write-down of marketable securities increased to $135,486 in fiscal 2005 from $25,000 in fiscal 2004 due to the decline in the value of Taseko Mines Limited common shares held by the Company as marketable securities. Stock-based compensation decreased to $11,513 in fiscal 2005 from $445,020 in fiscal 2004

due to a decrease in the number of options granted during fiscal 2005 (120,000) compared to fiscal 2004 (5,065,500).

Historically, the Company's sole source of funding has been the issuance of equity securities for cash, primarily through private placements to sophisticated investors and institutions. The Company has issued common share capital in each of the past few years, pursuant to private placement financings and the exercise of warrants and options. The Company's access to exploration financing, when the financing is not transaction specific, is always uncertain. There can be no assurance of continued access to significant equity funding.

At May 31, 2006, Rockwell had working capital deficit of $889,614 as compared to working capital of $550,554 at May 31, 2005, and a working capital of approximately $1.86 million at May 31, 2004. The decrease in working capital between fiscal 2006 and fiscal 2005 was due to exploration activities conducted.

As described in Item 4.B. (Financing Activity), subsequent to the end of the fiscal year, the Company completed a $6.0 million credit facility and $21.0 million private placement to fund the acquisition of the alluvial diamond properties and to repay the convertible promissory note of $9.5 million.

The proceeds of the credit facility and private placement will be used to facilitate the acquisition of Durnpike Investments (Proprietary) Limited ("Durnpike") and the funding of Durnpike’s obligations in connection with the acquisition of 51% of the outstanding shares of Klipdam Diamond Mining Company Limited and HC Van Wyk Diamonds (Proprietary) Limited.

The Company has no long term debt, capital lease obligations, operating leases or any other long term obligations.

The Company has no "Purchase Obligations" defined as any agreement to purchase goods or services that is enforceable and legally binding on the Company 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.

On August 21, 2006 Rockwell reached an agreement with Quest Capital Corp. (“Quest”) for a $6.0 million credit facility (the “Facility”). The Facility is payable out of the proceeds of any future debt or equity financing or disposition of any of the assets of Rockwell, other than in the ordinary course of business, and bears interest from March 1, 2007 at the rate of 18% per annum, calculated daily and compounded monthly, payable on the last business day of each month. The Facility, if not earlier converted, must be repaid on or before May 31, 2007. The Facility is secured by a first charge over all of the assets of Rockwell. In consideration for the Facility, Quest received 385,714 common shares of Rockwell. In addition, should the Facility remain outstanding on November 30, 2006, Quest will receive

an additional number of common shares equal to 4.5% of the principal amount then outstanding divided by the average closing price of the common shares of Rockwell on the TSX Venture Exchange for the 10 trading days immediately preceding November 30, 2006. The facility may be repaid at any time, without penalty. Quest has the right to convert the facility to common shares if Rockwell completes an equity financing for $5.0 million or greater, at the greater of the price at which the financing is conducted less a 3% discount, subject to a minimum conversion price of $0.65 per share.

On September 1, 2006, Rockwell borrowed $6.0 million under the Facility to facilitate the funding of Durnpike’s obligations in connection with the acquisition of 51% of the outstanding shares of Klipdam Diamond Mining Company Limited and HC Van Wyk Diamonds (Proprietary) Limited.

In July 2006, Rockwell entered into agreements to complete a $9.5 million private placement of subordinated secured convertible promissory notes (the “Notes”). The Notes must be repaid on or before March 31, 2007 and have similar terms and conditions to the $6.0 million credit facility, including conversion rights. The Notes are subordinated to the Facility, and are secured by a charge over all of the assets of Rockwell. As consideration for the Notes, the noteholders received 678,571 common shares of Rockwell on closing and 1,055,555 common shares on September 30, 2006, or equal to five percent of the outstanding balance owed on the Notes divided by the average closing price of Rockwell's common shares on the Exchange for the five trading days immediately preceding such issue, less a 10% discount. In addition, should the Notes remain outstanding on March 31, 2007, noteholders will receive an additional number of common shares on the same terms.

On November 23, 2006, Rockwell completed a $21 million private placement of 42 million units at $0.50 per unit. Each unit consists of one common share (“Shares”) in the capital of Rockwell and one Share purchase warrant. Each warrant entitles the holder to buy one Share in the capital of Rockwell at the exercise price of $0.60 during the first year from completion of the financing, or at an exercise price of $0.80 during the second year or at an exercise price of $1.00 during the third year. The third year term of the warrants is conditional upon Rockwell achieving Tier 1 status on the TSX Venture Exchange within the first two years.

Rockwell will use the net proceeds from the offering to complete the Acquisition described in Item B. Business Overview – Alluvial Diamond Properties, repay the Notes, carry out exploration and development, and for general working capital and corporate development purposes.

Rockwell financed its activities from fiscal 2000 through fiscal 2006 primarily through the issuance of equity shares by way of private placement. Rockwell keeps its financial instruments denominated in Canadian dollars and does not engage in any hedging operations with respect to currency or in-situ minerals.

The Company’s Ricardo property has the potential to host copper deposits. Copper prices have been increasing since late 2003. Copper prices averaged US$1.30/lb in 2004 and US$1.59/lb in 2005. Copper prices have continued to increase in 2006, averaging US$3.03/lb to the early December.

The rough diamond market was strong in 2005, with some softening at year end after prices peaked in the third quarter. Prices for polished stones increased, including large stones (>2 carats with better colour and quality) and smaller diamond segments. In 2006, diamond prices have shown general increases of 4-5% in the first three quarters, but softened in the latter part of the year as a consequence of increased debt levels in manufacturing centers and high energy prices, depressing discretionary spending in key markets such as the USA. Prices of larger solid diamonds continue to show solid gains on a year-over-year basis. According to a recent report, round polished diamonds 4 carats and 5 carats in size, and representing about 1% of the market by value, continue to post solid price gains, year-over-year. The continued price appreciation of large stones is significant in respect to the production mix from the projects being acquired in Kimberley area of South Africa, which comprises a significant component of large (+2 carats, including 10 carat) stones.

The Company will continue to make expenditures in fiscal 2007 to keep its Ricardo property in good standing, and has plans to invest in exploration and development of its recent alluvial diamond acquisitions, as discussed in Items 4.B and 4.D of this Annual Report. These expenditures will result in a decrease in the Company's cash and working capital position unless further equity financings are completed during 2007, and there is no assurance that the Company will be successful in acquiring such financing.

Rockwell does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

As at May 31, 2006, Rockwell did not have any of the following types of contractual obligations: long-term debt obligations, capital lease obligations, operating lease obligations, purchase obligations, or any other long term liabilities required to be reflected on its balance sheet under Cdn GAAP.

	Payment due by period
Type of Contractual Obligation	Total	Less than 1 Year	1 - 3 Years	3 - 5 Years	More than 5 Years
Long-Term Debt Obligations	–	–	–	–	–
Capital (Finance) Lease Obligations	–	–	–	–	–
Operating Lease Obligations (Office Lease)	–	–	–	–	–

	Payment due by period
Type of Contractual Obligation	Total	Less than 1 Year	1 - 3 Years	3 - 5 Years	More than 5 Years
Purchase Obligations	–	–	–	–	–
Other Long-Term Liabilities Reflected on the Company's Balance Sheet under the GAAP of the primary financial statements	–	–	–	–	–
Total	–	–	–	–	–

The safe harbor provided in Section 27A of the Securities Act and Section 21E of the Exchange Act applies to forward-looking information provided pursuant to Item 5.E and F above.

Dr. Bristow, Ph.D., has over 30 years experience in the diamond business, initially with De Beers and most recently as CEO of Kalahari Diamonds, plc, which successfully merged with Petra Diamonds in 2005. In 1998 Mr. Bristow played a key role in listing alluvial diamond producer Gem Diamond Mining Corporation (“Gem”) on the Johannesburg Stock Exchange. Mvelaphanda Diamonds (Proprietary) Limited subsequently acquired a controlling interest in Gem, then merged with the Trans Hex Group, South Africa’s largest publicly listed diamond producer, in 2000. Mr. Bristow has considerable African and International experience in the exploration, evaluation and mining of kimberlite and alluvial diamond deposits.

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

Mr. Brenner is a leading international diamantaire – a specialist in the valuation, marketing and sales of rough diamond production from alluvial deposits. His ability to evaluate rough diamonds will be important to the success of the alluvial operations. From a corporate perspective, Mr. Brenner’s role will be to use his extensive knowledge of South African alluvial diamonds in networking activities in Belgium and other key trading centres and to market the large and high quality gemstones (the average value of which are in excess of US$1,000 per carat) produced from the newly acquired South African properties.

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

Rene Carrier was a past Vice-President of Pacific International Securities Inc. for ten years where he worked 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	To
Rockwell Ventures Inc.	Director	April 1993	Present
Rockwell Ventures Inc.	President	April 1993	November 2000
Continental Minerals Corporation	Director	February 2001	Present
Quartz Mountain Resources Ltd.	Director	January 2000	Present
Quartz Mountain Resources Ltd.	President	June 2005	Present
Acrex Ventures Ltd.	Director	September 2000	September 2003
Chartwell Technology Inc.	Director	June 1991	Present
International Royalty Corporation	Lead Director	June 2003	Present

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. He is a director of Hunter Dickinson Inc., a private company with certain directors in common with the Company, which provides consulting services.

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

Company	Positions Held	From	To
Rockwell Ventures Inc.	Director	September 2006	Present
Rockwell Ventures Inc.	Chief Executive Officer	August 2006	Present
Amarc Resources Ltd.	Director	September 1995	Present
Anooraq Resources Corporation	Director	September 1996	September 2004
Casamiro Resource Corp.	Director	February 1995	August 2002
Continental Minerals Corporation	Director	November 1995	Present
Farallon Resources Ltd.	Director	December 1995	Present
Great Basin Gold Ltd.	Director	February 1994	Present
Northern Dynasty Minerals Ltd.	Director	June 1996	Present
Taseko Mines Limited	Director	January 1994	Present

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 and has established strong ties with North American, European and Asian investors. In addition to financing initiatives he also oversees the corporate communications programs for the public companies to which Hunter Dickinson Inc. provides services.

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

Company	Positions Held	From	To
Rockwell Ventures Inc.	Director	November 2000	Present
Amarc Resources Ltd.	Director	September 1995	Present
Anooraq Resources Corporation	Director	September 1996	Present
Continental Minerals Corporation	Director	June 1994	Present
Farallon Resources Ltd.	Director	December 1995	Present

Company	Positions Held	From	To
Rockwell Ventures Inc.	Director	November 2000	Present
Great Basin Gold Ltd.	Director	March 1993	November 2006
Northern Dynasty Minerals Ltd.	Director	June 1996	Present
Taseko Mines Limited	Director	October 1992	Present

JEFFREY MASON, B.Comm., CA – Director, Chief Financial Officer and Secretary

Jeffrey Mason holds a Bachelor of Commerce degree from the University of British Columbia and obtained his Chartered Accountant designation while specializing in the mining, forestry and transportation sectors at the international accounting firm of Deloitte & Touche. Following comptrollership positions at an international commodity mercantilist and Homestake Mining Group of companies including responsibility for North American Metals Corp. and the Eskay Creek Project, Mr. Mason has spent the last several years as a corporate officer and director for a number of publicly-traded mineral exploration companies. Mr. Mason is also employed as Chief Financial Officer of Hunter Dickinson Inc. and his principal occupation is the financial administration of the public companies to which Hunter Dickinson Inc. provides services.

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

Company	Positions Held	From	To
Rockwell Ventures Inc.	Director	November 2000	Present
Rockwell Ventures Inc.	Chief Financial Officer	November 2000	Present
Amarc Resources Ltd.	Director	September 1995	Present
	Secretary	September 1995	Present
	Chief Financial Officer	September 1998	Present
Anooraq Resources Corporation	Director	April 1996	September 2004
	Secretary	September 1996	Present
	Chief Financial Officer	February 1999	Present
Continental Minerals Corporation	Director	June 1995	Present
	Secretary	November 1995	Present
	Chief Financial Officer	June 1998	Present
Farallon Resources Ltd.	Director	August 1994	Present
	Secretary	December 1995	Present
	Chief Financial Officer	December 1997	Present
Great Basin Gold Ltd.	Director	February 1994	November 2006
	Secretary	February 1994	November 2006
	Chief Financial Officer	June 1998	November 2006
Northern Dynasty Minerals Ltd.	Director	June 1996	Present

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 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.

Ronald Thiessen is a Chartered Accountant with professional experience in finance, taxation, mergers, acquisitions and re-organizations. Since 1986, Mr. Thiessen has been involved in the acquisition and financing of mining and mineral exploration companies. Mr. Thiessen is employed by Hunter Dickinson Inc., a company providing management and administrative services to several publicly-traded companies and focuses on directing corporate development and financing activities. He is also a director of Hunter Dickinson Inc.

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

Company	Positions Held	From	To
Rockwell Ventures Inc.	Director	November 2000	Present
	Chairman	September 2006	Present
	President and Chief Executive Officer	November 2000	September 2006
Amarc Resources Ltd.	Director	September 1995	Present
Amarc Resources Ltd.	President and Chief Executive Officer	September 2000	Present
Anooraq Resources Corporation	Director	April 1996	Present
Anooraq Resources Corporation	President and Chief Executive Officer	September 2000	Present

Company	Positions Held	From	To
Casamiro Resource Corp.	Director and President	February 1990	August 2002
Continental Minerals Corporation	Director	November 1995	Present
	President and Chief Executive Officer	September 2000	January 2006
	Co-Chairman	January 2006	Present
Farallon Resources Ltd.	Director	August 1994	Present
	President and Chief Executive Officer	December 1999	September 2004
	Co-Chairman	September 2004	December 2005
	Chairman	December 2005	Present
Great Basin Gold Ltd.	Director	October 1993	Present
	President and Chief Executive Officer	September 2000	December 2005
	Co-Chairman	December 2005	Present
Northern Dynasty Minerals Ltd.	Director	November 1995	Present
Northern Dynasty Minerals Ltd.	President and Chief Executive Officer	November 2001	Present
Taseko Mines Limited	Director	October 1993	Present
	President and Chief Executive Officer	September 2000	July 2005
	Co-Chairman	July 2005	May 2006
	Chairman	May 2006	Present
Tri-Gold Resources Corp.	Director	July 1992	Present

During Rockwell’s financial year ended May 31, 2006 the aggregate direct remuneration paid or payable to the Company’s directors and senior officers by the Company and its subsidiaries, all of whose financial statements are consolidated with those of Rockwell, was $94,245. This figure includes any portion of remuneration received by the named person as an officer or employee of Hunter Dickinson Inc. that is attributable to Rockwell’s affairs.

David Copeland, Chief Executive Officer, John Bristow, President and Ronald W. Thiessen, former President and Chief Executive Officer, and Jeffrey R. Mason, Chief Financial Officer, are each a “Named Executive Officer” of the Company for the purposes of the following disclosure. Mr. Copeland and Dr. Bristow were appointed in August 2006 and as such, have not been included in the executive compensation disclosure provided below. The compensation paid to the Named Executive Officers during the Company’s three most recently completed financial years is as set out below:

NAMED EXECUTIVE OFFICERS Name and Principal Position	Year	Annual Compensation			Long Term Compensation			All Other Compens ation ($)
		Annual Compensation			Awards		Payouts
		Salary ($)	Bonus ($)	Other Annual Compen- sation ($)	Securities Under Options Granted (#)	Shares or Units Subject to Resale Restrictions ($)	LTIP Payouts ($)
Ronald W. Thiessen Director and former President and Chief Executive Officer	2006 2005 2004	29,016 10,834 20,693	Nil Nil Nil	Nil Nil Nil	Nil Nil 500,000	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil
Jeffrey R. Mason Chief Financial Officer and Director	2006 2005 2004	18,769 8,418 15,612	Nil Nil Nil	Nil Nil Nil	Nil Nil 500,000	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil

No share options were granted to the Named Executive Officers during the year ended May 31, 2006.

No share options were exercised by the Named Executive Officers during the year ended May 31, 2006.

Termination of Employment, Change in Responsibilities and Employment Contracts

There are no compensatory plans or arrangements with respect to the Named Executive Officer resulting from the resignation, retirement or any other termination of employment of the officer’s employment or from a change of the Named Executive Officer’s responsibilities following a change in control.

During the fiscal year 2006, each independent director of the Company was paid an annual director’s fee of $10,200.

As at November 28, 2006 the directors and officers of Rockwell and their affiliates held as a group, directly and indirectly, own or control an aggregate of 6,954,594 common shares (10.3%) . To the knowledge of the directors and officers of the Company, as at such date, there were no persons holding more than 10% of the issued common shares.

All directors were elected at the annual general meeting held in November 2006, and have a term of office expiring at the next annual general meeting of Rockwell expected to be held in November 2007. The period during which each director has served as a director is disclosed in Item 6(A) herein. All officers have a term of office lasting until their removal or replacement by the Board of Directors.

There are no contracts or arrangements under which directors are compensated or provided benefits upon termination of employment.

Messrs. Rene G. Carrier and Scott D. Cousens are members of Rockwell’s audit committee. The audit committee is selected annually by the directors of Rockwell at the first meeting of the board held after

Rockwell’s annual general meeting. Its primary function is to review the financial statements of the company before they are submitted to the board for approval and the audit committee is also available to assist the board if required with matters relating to the appointment of Rockwell’s auditor and the overall scope and results of the audit, internal financial controls, and financial information for publication for various purposes.

At November 28, 2006, Rockwell has no direct employees. The Company’s administrative and exploration functions are primarily administered through Hunter Dickinson Inc. and contractors (see Item 7B).

Security holdings of the Company’s directors and senior management (as at November 28, 2006), as disclosed on www.sedi.ca.

Name of Insider ⁽¹⁾	Shares Beneficially Owned or Controlled ⁽²⁾	As a percentage of outstanding shares
Jeffrey Brenner	Nil	Nil
John W. Bristow	Nil	Nil
Rene G. Carrier	1,233,439 shares ⁽³⁾	1.8 %
David Copeland	1,032,373 shares	1.5%
Scott D. Cousens	2,930,436 shares	4.3%
Jeffrey R. Mason	1,357,296 shares	2.0%
Douglas B. Silver	Nil	Nil
Ronald W. Thiessen	401,050 shares	0.6%

Notes:

At the Company’s Annual and Extraordinary General Meeting held in November 2006, shareholders of the Company approved a Share Incentive Plan (“2006 Plan”) in accordance with the policies of the TSX Venture Exchange. Under the 2006 Plan, a maximum of 10% of the issued and outstanding shares of the Company at the time an option is granted, less the number of shares reserved for issuance in the 2006 Plan, are reserved for issuance as options to be granted at the discretion of the Company’s board of directors to eligible optionees under the 2006 Plan. The exercise price of each option normally equals or

exceeds the market price of the Company's shares as calculated on the date of grant. Options granted are for a term of no greater than five years.

Incentive stock options may be issued to directors, officers, employees or consultants of the Company at the discretion of the board of directors, subject to an aggregate maximum of 10% of the issued capital of the Company.

At November 28, 2006, an aggregate of 462,917 common shares have been reserved for issuance pursuant to the 2006 Plan:

Rockwell’s securities are recorded on the books of its transfer agent in registered form. However, the majority of such shares are registered in the name of intermediaries such as brokerage houses and clearing houses on behalf of their respective brokerage clients, and the Company does not have knowledge or access to information about of the beneficial owners thereof. To the best of its knowledge, the Company is not directly or indirectly owned or controlled by a corporation or foreign government. As of November 28, 2006, Rockwell had authorized an unlimited number of common shares without par value of which 67,815,450 were issued and outstanding.

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.

“Beneficial ownership” means the sole or shared power to vote or direct the voting or to dispose or direct the disposition of any security. A person is deemed to have beneficial ownership of any securities that such person has a right to acquire within 60 days of November 28, 2006 through the exercise of any option or warrant. Any security that any person has the right to acquire within 60 days is deemed outstanding for the purpose of calculating the ownership of such person, but is not deemed to be outstanding for the purpose of calculating the ownership percentage of any other person.

As of November 28, 2006, other than the security holdings of directors and senior management disclosed in Item 6.E., the only registered holders of 5% or more of the common shares of the Company are as follows:

Shareholder Name and Address	Number of Shares Held	Percentage of Issued Common Shares
The Canadian Depository for Securities Limited ("CDS") ⁽³⁾ 25 The Esplanade PO Box 1038 Stn A Toronto, ON M5W 1G5	22,024,713	32.5%
Haywood Securities Inc, In Trust For Springleaf Enterprises Inc 400 Burrard St, Suite 200 Vancouver, BC	10,000,000	14.8%
Haywood Securities Inc, In Trust For Abdulaziz Hamad Aljomaih 400 Burrard St, Suite 200 Vancouver, BC	6,000,000	8.9%

Shareholder Name and Address	Number of Shares Held	Percentage of Issued Common Shares
Union Securities, In Trust For Rahim Ladhani 700 West Georgia St, Suite 900 Vancouver, BC	3,400,000	5.0%

As of November 28, 2006, directors and officers of Rockwell in total (8 persons) owned or controlled an aggregate of 5,504,594 shares (8.1%) of Rockwell, or 6,954,594 shares (6.3%) on a fully diluted basis. These directors or officers do not have any different voting rights with respect to the common shares held by them. Under the British Columbia Securities Act, insiders (generally officers, directors, holders of 10% or more of the Company’s shares) are required to file insider reports of changes in their ownership in the first 10 days following a trade in Rockwell’s securities. Under British Columbia securities laws, insider trading information is available at www.sedi.ca

As at November 28, 2006, to the best of the Company's knowledge, the following is the geographic distribution of shareholders. Shares registered in intermediaries were assumed to be held by residents of the same country in which the clearing house was located.

			Percentage
	Number of registered	Number of common	of total
Location	shareholders	shares held	shares
Canada	65	59,204,497	87.3%
United States	17	3,110,238	4.6%
Other countries	139	5,500,715	8.1%
Total	221	67,815,450	100%

To management’s knowledge, there are no arrangements the operation of which may at a subsequent date result in a change of control of Rockwell.

No director or senior officer, and no associate or affiliate of the foregoing persons, and no insider has or has had any material interest, direct or indirect, in any other transactions, or in any other proposed transaction, which in either such case has materially affected or will materially affect Rockwell or its predecessors during the fiscal year ended May 31, 2006 except as follows:

In December 2003, the Company entered into a farmout agreement (the "2003 farmout agreement") with Taseko Mines Limited ("Taseko"), a public company with certain directors in common with the Company. Under the terms of the 2003 farmout agreement, Taseko granted to the Company rights to earn joint venture working interests, subject to a maximum of $200,000, on certain exploration properties located in the vicinity of the Gibraltar mine property. For a period of 150 days after the Company had earned its working interest, Taseko had the right to purchase, at its option, the Company's earned interests for cash or common share consideration aggregating 110% of the Company's earn-in amount. If Taseko elected to issue common shares,

the number of common shares to be issued upon exercise would be valued at the ten-day weighted average trading price as traded on the TSX-V.

In December 2003, the Company earned an interest in these properties to the extent of $200,000.

During the Company’s fiscal year ended May 31, 2004, Taseko exercised its right to purchase the Company's interest, and on June 15, 2004, Taseko issued 78,853 of its common shares for total consideration of $220,000.

Rockwell has not paid any dividends on its outstanding common shares since its incorporation and does not anticipate that it will do so in the foreseeable future. All funds of the Company are being retained for exploration of its projects.

There have been no significant changes to the accompanying consolidated financial statements since May 31, 2006.

The transfer of the Company’s common shares is managed by its transfer agent, Computershare Trust Company of Canada of Vancouver.

Copies of Rockwell’s memorandum and articles of incorporation, as registered with the British Columbia Registrar of Companies under Corporation No. 354545, were filed with the Company’s initial registration statement on Form 20-F filed in 2000. The Business Corporations Act (British Columbia) (the “BCA") came into force on March 29, 2004. As a result, the Company Act (British Columbia) was repealed, and the Company became a “pre-existing company” subject to the provisions of the BCA. Every pre-existing company is required under the BCA to file a Transition Application containing a notice of articles with the British Columbia Registrar of Companies, as a result of which the notice of articles supersedes and replaces the company’s memorandum. The Company has caused a Transition Application to be filed with the British Columbia Registrar of Companies, and its notice of articles and the related articles are being filed as exhibits to this Annual Report.

Rockwell’s Notice of Articles do not specify objects or purposes. Under British Columbia law, a British Columbia corporation has all the legal powers of a natural person; however corporations may not undertake certain limited business activities such as operating as a trust company or railroad without alterations to its form of articles and specific government consent.

Rockwell’s articles do not specify a maximum number of directors (the minimum under British Columbia law for a public company is three). The articles specify that the number of directors shall be the number of directors fixed by shareholders annually or the number that are actually elected at a general shareholders meeting. The number of directors is determined annually by shareholders at the annual Shareholders meeting and all directors are elected at that time, there are no staggered directorships. Under the articles the directors are entitled between successive annual general meeting to appoint one or more additional directors but not more than one-third of the number of directors fixed at a shareholders meeting or actually elected at the preceding annual general meeting. Directors automatically retire at the commencement of each annual meeting subject to being re-elected.

Under the articles, a director who is any way directly or indirectly interested in a proposed contract or transaction with Rockwell or who holds any office or possesses any property whereby directly or indirectly a duty might be created which would conflict with his duty or interest as a director shall declare the nature and extent of such interest in such contract or transaction. A director shall not vote in respect of any such contract or transaction if the company in which he is interested and if he should vote his vote shall not be counted but shall be counted in the quorum present at the meeting. Similarly, under the BCA directors are obligated to abstain from voting on matters in which they may be financially interested after fully disclosing such interest. Directors must abstain in such circumstances both under the articles and under the BCA.

Directors must be of the age of majority (18), and meet eligibility criteria including not being mentally infirm, an undischarged bankrupt, no fraud related convictions in the previous five years and a majority of

directors must be ordinarily resident in Canada. There is no mandatory retirement age either under Rockwell’s articles or under the BCA.

The directors may from time to time at their discretion authorize the Company to borrow any sum of money for the purposes of the Company and may raise or secure the repayment of that sum in such manner upon such terms and conditions, in all respects, as they think fit, and in particular, and without limiting the generality of the foregoing, by the issue of bonds or debentures, or any mortgage or charge, whether specific or floating, or other security on the undertaking or the whole or any part of the property of the Company, both present and future. Directors need not own any shares of the Company in order to qualify as directors.

The directors may declare dividends and fix the date of record therefore and the date for payment thereof. No notice need be given of the declaration of any dividend.

Subject to the terms of shares with special rights or restrictions, all dividends shall be declared according to the number of shares held and no dividend shall bear interest against Rockwell.

The directors may direct payment of any dividend wholly or partly by the distribution of specific assets or of paid-up shares, bonds, debentures or other debt obligations of Rockwell, or in any one or more of those ways, and where any difficult arises in regard to the distribution, the directors may settle the same as they think expedient, and in particular may fix the value for distribution of specific assets or of paid-up shares, bonds, debentures or other debt obligations of Rockwell, or in any one or more of those ways, and, where any difficulty arises in regard to the distribution, the directors may settle the same as they think expedient, and in particular may fix the value for distribution of specific assets, and may determine the cash payments shall be made to a member upon the basis of the value so fixed in place of fractional shares, bonds, debentures or other debt obligations in order to adjust the rights of all parties, and may vest any of those specific assets in trustees upon such trusts for the persons entitled as may seem expedient to the directors.

Notwithstanding anything contained in Rockwell’s articles the directors may from time to time capitalize any undistributed surplus on hand of Rockwell and may from time to time issue as fully paid and non-assessable any unissued shares or any bonds, debentures or other debt obligations of Rockwell as a dividend representing such undistributed surplus on hand or any part thereof.

Any dividend, interest or other moneys payable in cash in respect of shares may be paid by cheque or warrant sent through the post directed to the registered address of the holder, or, in the case of joint holders, to the registered address of that one of the joint holders who is first named on the register or to such person and to such address as the holder or joint holders may in writing direct. Every such cheque or warrant shall be made payable to the order of the person to whom it is sent. Any one of two or more joint holders may give effectual receipts for any dividends, bonuses or other moneys payable in respect of the shares held by them as joint holders.

A transfer of a share shall not pass the right to any dividend declared thereon before the registration of the transfer in the register.

Notwithstanding any other provisions of the articles should any dividend result in any shareholders being entitled to a fractional part of a share of Rockwell, the directors shall have the right to pay such shareholders in place of that fractional share, the cash equivalent thereof calculated on the par value thereof, or in the case of shares without nominal or par value, calculated on the price or consideration for

which such shares were or were deemed to be issued, and shall have the further right and complete discretion to carry out such distribution and to adjust the rights of the shareholders with respect thereto on as practical and equitable a basis as possible including the right to arrange through a fiscal agent or otherwise for the sale, consolidation or other disposition of those fractional shares on behalf of those shareholders of Rockwell.

The directors may, before declaring any dividend, set aside out of the profits of Rockwell such sums as they think proper as appropriations from income which shall at the discretion of the directors, be applicable for meeting contingencies, or for equalizing dividends, or for any other purpose to which the profits of Rockwell may be properly applied, and pending such application may, either be employed in the business of Rockwell or be invested in such investments as the directors in their discretion may from time to time determine.

Changes to the articles and memorandum of Rockwell a “special resolution” being a resolution passed by not less than 75% of the shares voted in person or by proxy at a duly convened shareholders meeting. Some corporate changes including amalgamation with another company, sale of substantially all of Rockwell’s assets, re-domiciling out of the jurisdiction of British Columbia, creation of new classes of shares not only require such 75% approval but generally also give rise to a dissent right which is the right to be paid the fair value of the stockholder’s shares in cash if the required special resolution is actually passed and Rockwell elects to proceed with the matter notwithstanding receipt of dissent notices. A notice of a shareholders meeting at which such an action is intended to be effected must include a prominent notice of the dissent right. Dissent provisions governed by the BCA and not by the articles of Rockwell.

Shareholders meetings are only peripherally governed by the articles of Rockwell with most shareholder protections contained in the Securities Act (British Columbia) and the BCA. The articles provide that Rockwell will hold an annual general meeting, will provide at least 21 days’ notice and will provide for certain procedural matters and rules of order with respect to conduct of the meeting. The Securities Act (British Columbia) and the BCA superimpose requirements that generally provide that shareholders meetings require not less than a 60 day period from initial public notice that Rockwell makes a thorough advanced search of intermediary and brokerage registered shareholdings to ascertain location of beneficial shareholders so that materials can be sent, the form and content of information circulars and proxies and like matters typically governed by such securities legislation. This legislation specifies the disclosure requirements for various corporate actions, background information on the nominees for election for director, executive compensation paid in the previous year and full details of any unusual matters. Rockwell must hold an annual shareholders meeting within 13 months of the previous annual shareholders meeting and must present audited statements that are no more than 180 days old at that meeting.

Subject to the special rights and restrictions attached to any class of shares, Rockwell may, by a resolution of the directors and in compliance with the BCA, redeem any of its shares that have a right of redemption attached thereto at the price and upon the terms specified in such resolution and where Rockwell purposes to redeem some, but not all, of its shares of a particular class or kind, it shall not be obligated to redeem them pro rata but may redeem them in any manner the directors in their absolute discretion may deem fit.

There are no pre-emptive rights applicable to Rockwell which provide a right to any person to participate in offerings of Rockwell’s securities

All common shares of Rockwell participate ratably in any available assets in the event of a winding up or other liquidation.

There are no limitations under Rockwell’s Articles or in the BCA on the right of persons who are not citizens of Canada to hold or vote common shares. (See also “Exchange Controls” – below.)

Dividends may be declared by the Board out of available assets and are paid rateably to holders of common shares. No dividend may be paid if Rockwell is, or would thereby become, insolvent.

Each Rockwell share is entitled to one vote on matters to which common shares ordinarily vote including the election of directors, appointment of auditors and approval of corporate changes and other matters requiring shareholder approval.

Rockwell has not implemented any shareholders’ rights against possible take-overs. Rockwell does not have any agreements which are triggered by a take-over or other change of control. There are no provisions in its articles triggered by or affected by a change in outstanding shares which gives rise to a change in control.

The articles of Rockwell do not require disclosure of share ownership. Share ownership of director nominees must be reported annually in proxy materials sent to Rockwell’s shareholders. There are no requirements under British Columbia corporate law to report ownership of shares of Rockwell but the British Columbia Securities Act requires disclosure of trading by insiders including holders of 10% of voting shares within 10 days of the trade. Controlling shareholders (generally those in excess of 20% of outstanding shares) must provide seven days advance notice of share sales.

Rockwell is a Canadian corporation incorporated under the laws of British Columbia. There is no law or governmental decree or regulation in Canada that restricts the export or import of capital, or affects the remittance of dividends, interest or other payments to a non-resident holder of Common Shares, other than withholding tax requirements. Any such remittances to United States residents are generally subject to withholding tax. See “Taxation” below.

There is no limitation imposed by the laws of Canada or by the charter or other constituent documents of Rockwell on the right of a non-resident to hold or vote the Common Shares, other than as provided in the Investment Canada Act (Canada) (the “Investment Act”). The following discussion summarizes the material features of the Investment Act for a non-resident who proposes to acquire a controlling number of Common Shares. It is general only, it is not a substitute for independent advice from an investor’s own advisor, and it does not anticipate statutory or regulatory amendments. Rockwell does not believe the Investment Act will have any affect on it or on its non-Canadian shareholders due to a number of factors including the nature of its operations and Rockwell’s relatively small capitalization.

The Investment Act generally prohibits implementation of a reviewable investment by an individual, government or agency thereof, corporation, partnership, trust or joint venture (each an “entity”) that is not a “Canadian” as defined in the Investment Act (a “non-Canadian”), unless after review the Director of Investments appointed by the minister responsible for the Investment Act is satisfied that the investment is likely to be of net benefit to Canada. The size and nature of a proposed transaction may give rise to an obligation to notify the Director to seek an advance ruling. An investment in the Common Shares by a non-Canadian other than a “WTO Investor” (as that term is defined in the Investment Act and which term includes entities which are nationals of or are controlled by nationals of member states of the World Trade Organization) when Rockwell was not controlled by a WTO Investor, would be reviewable under the Investment Act if it was an investment to acquire control of Rockwell and the value of the assets of Rockwell, as determined in accordance with the regulations promulgated under the Investment Act, was $5 million or more, or if an order for review was made by the federal cabinet on the grounds that the investment related to Canada’s cultural heritage or national identity, regardless of the value of the assets of Rockwell. An investment in the Common Shares by a WTO Investor, or by a non-Canadian when Rockwell was controlled by a WTO Investor, would be reviewable under the Investment Act if it was an investment to acquire control of Rockwell and the value of the assets of Rockwell, as determined in accordance with the regulations promulgated under the Investment Act, was not less than a specified amount, which for 2005 exceeds $250 million. A non-Canadian would acquire control of Rockwell for the purposes of the Investment Act if the non-Canadian acquired a majority of the Common Shares. The acquisition of less than a majority but one-third or more of the Common Shares would be presumed to be an acquisition of control of Rockwell unless it could be established that, on the acquisition, Rockwell was not controlled in fact by the acquiror through the ownership of the Common Shares.

The foregoing assumes Rockwell will not engage in the production of uranium or own an interest in a producing uranium property in Canada, or provide any financial service or transportation service, as the rules governing these businesses are different.

Certain transactions relating to the Common Shares would be exempt from the Investment Act, including

(a) an acquisition of the Common Shares by a person in the ordinary course of that person’s business as a trader or dealer in securities,

(b) an acquisition of control of Rockwell in connection with the realization of security granted for a loan or other financial assistance and not for a purpose related to the provisions of the Investment Act, and

(c) an acquisition of control of Rockwell by reason of an amalgamation, merger, consolidation or corporate reorganization following which the ultimate direct or indirect control in fact of Rockwell, through the ownership of the Common Shares, remained unchanged.

The discussion under this heading summarizes the principal Canadian federal income tax consequences of acquiring, holding and disposing of shares of common stock of Rockwell for a shareholder of Rockwell who is not a resident of Canada but is a resident of the United States and who will acquire and hold shares of common stock of Rockwell as capital property for the purposes of the Income Tax Act (Canada) (the “Canadian Tax Act”). This summary does not apply to a shareholder who carries on business in Canada through a “permanent establishment” situated in Canada or performs independent personal services in Canada through a fixed base in Canada if the shareholder’s holding in Rockwell is effectively connected with such permanent establishment or fixed base. This summary is based on the provisions of the Canadian Tax Act and the regulations thereunder and on an understanding of the administrative practices of Canada Revenue Agency, and takes into account all specific proposals to amend the Canadian Tax Act or regulations made by the Minister of Finance of Canada as of the date hereof. It has been assumed that there will be no other relevant amendment of any governing law although no assurance can be given in this respect. This discussion is general only and is not, nor is it intended to provide a detailed analysis of the income tax implications of any particular shareholder’s interest. Investors are advised to obtain independent advice from a shareholder’s own Canadian and U.S. tax advisors with respect to income tax implications pertinent to their particular circumstances.

The provisions of the Canadian Tax Act are subject to income tax treaties to which Canada is a party, including the Canada-United States Income Tax Convention (1980), as amended (the “Convention”).

Under the Canadian Tax Act, a non-resident of Canada is generally subject to Canadian withholding tax at the rate of 25 percent on dividends paid or deemed to have been paid to him or her by a corporation resident in Canada. Rockwell is responsible for withholding of tax at the source. The Convention limits the rate to 15 percent if the shareholder is a resident of the United States and the dividends are beneficially owned by and paid to such shareholder and to 5 percent if the shareholder is also a corporation that beneficially owns at least 10 percent of the voting stock of the payor corporation.

The amount of a stock dividend (for tax purposes) would generally be equal to the amount by which the paid up or stated capital of Rockwell had increased by reason of the payment of such dividend. Rockwell will furnish additional tax information to shareholders in the event of such a dividend. Interest paid or deemed to be paid on Rockwell’s debt securities held by non-Canadian residents may also be subject to Canadian withholding tax, depending upon the terms and provisions of such securities and any applicable tax treaty.

The Convention generally exempts from Canadian income tax dividends paid to a religious, scientific, literary, educational or charitable organization or to an organization constituted and operated exclusively to administer a pension, retirement or employee benefit fund or plan, if the organization is a resident of the United States and is exempt from income tax under the laws of the United States.

Under the Canadian Tax Act, a taxpayer’s capital gain or capital loss from a disposition of a share of common stock of Rockwell is the amount, if any, by which his or her proceeds of disposition exceed (or are exceeded by, respectively) the aggregate of his or her adjusted cost base of the share and reasonable expenses of disposition. The capital gain or loss must be computed in Canadian currency using a weighted average adjusted cost base for identical properties. The capital gains net of losses included in income are as follows. For gains net of losses realized before February 28, 2000, as to 75%. For gains

net of losses realized after February 27, 2000 and before October 18, 2000, as to 66 2/3%. For gains net of losses realized after October 17, 2000, as to 50%. There are special transitional rules to apply capital losses against capital gains that arose in different periods. The amount by which a shareholder’s capital loss exceeds the capital gain in a year may be deducted from a capital gain realized by the shareholder in the three previous years or any subsequent year, subject to certain restrictions in the case of a corporate shareholder.

Under the Canadian Tax Act, a non-resident of Canada is subject to Canadian tax on taxable capital gains, and may deduct allowable capital losses, realized on a disposition of “taxable Canadian property.” Shares of common stock of Rockwell will constitute taxable Canadian property of a shareholder at a particular time if the shareholder used the shares in carrying on business in Canada, or if at any time in the five years immediately preceding the disposition 25% or more of the issued shares of any class or series in the capital stock of Rockwell belonged to one or more persons in a group comprising the shareholder and persons with whom the shareholder and persons with whom the shareholder did not deal at arm’s length and in certain other circumstances.

The Convention relieves United States residents from liability for Canadian tax on capital gains derived on a disposition of shares unless

(a) the value of the shares is derived principally from “real property” in Canada, including the right to explore for or exploit natural resources and rights to amounts computed by reference to production,

(b) the shareholder was resident in Canada for 120 months during any period of 20 consecutive years preceding, and at any time during the 10 years immediately preceding, the disposition and the shares were owned by him when he or she ceased to be resident in Canada, or

(c) the shares formed part of the business property of a “permanent establishment” that the holder has or had in Canada within the 12 months preceding the disposition.

The following is, in the opinion of Rockwell after consultation with its professional advisors, a discussion of material United States federal income tax consequences, under current law, generally applicable to a U.S. Holder (as hereinafter defined) of common shares of Rockwell. This discussion does not address all potentially relevant federal income tax matters and it does not address consequences peculiar to persons subject to special provisions of federal income tax law, such as those described below as excluded from the definition of a U.S. Holder. In addition, this discussion does not cover any state, local or foreign tax consequences, (see “Taxation – Canadian Federal Income Tax Consequences” above). Accordingly, holders and prospective holders of common shares of Rockwell are urged to consult their own tax advisors about the specific federal, state, local, and foreign tax consequences to them of purchasing, owning and disposing of common shares of Rockwell, based upon their individual circumstances.

The following discussion is based upon the sections of the Internal Revenue Code of 1986, as amended (the “Code”), Treasury Regulations, published Internal Revenue Service (“IRS”) rulings, published administrative positions of the IRS and court decisions that are currently applicable, any or all of which could be materially and adversely changed, possibly on a retroactive basis, at any time and which are subject to differing interpretations. This discussion does not consider the potential effects, both adverse and beneficial, of any proposed legislation which, if enacted, could be applied, possibly on a retroactive basis, at any time.

As used herein, a “U.S. Holder” means a holder of common shares of Rockwell who is a citizen or individual resident of the United States, a corporation or partnership created or organized in or under the laws of the United States or of any political subdivision thereof, an entity created or organized in or under the laws of the United States or of any political subdivision thereof which has elected to be treated as a corporation for United States federal income tax purposes (under Treasury Regulation Section 301.7701 -3), an estate whose income is taxable in the United States irrespective of source or a trust subject to the primary supervision of a court within the United States and control of a United States fiduciary as described in Section 7701(a)(30) of the Code. This summary does not address the tax consequences to, and U.S. Holder does not include, persons subject to specific provisions of federal income tax law, such as tax-exempt organizations, qualified retirement plans, individual retirement accounts and other tax-deferred accounts, financial institutions, insurance companies, real estate investment trusts, regulated investment companies, broker-dealers, non-resident alien individuals, persons or entities that have a “functional currency” other than the U.S. dollar, shareholders subject to the alternative minimum tax, shareholders who hold common shares as part of a straddle, hedging or conversion transaction, and shareholders who acquired their common shares through the exercise of employee stock options or otherwise as compensation for services. This summary is limited to U.S. Holders who own common shares as capital assets and who own (directly and indirectly, pursuant to applicable rules of constructive ownership) no more than 5% of the value of the total outstanding stock of Rockwell. This summary does not address the consequences to a person or entity holding an interest in a shareholder or the consequences to a person of the ownership, exercise or disposition of any options, warrants or other rights to acquire common shares. In addition, this summary does not address special rules applicable to United States persons (as defined in Section 7701(a)(30) of the Code) holding common shares through a foreign partnership or to foreign persons holding common shares through a domestic partnership.

In general, U.S. Holders receiving dividend distributions (including constructive dividends) with respect to common shares of Rockwell are required to include in gross income for United States federal income tax purposes the gross amount of such distributions, equal to the U.S. dollar value of such distributions on the date of receipt (based on the exchange rate on such date), to the extent that Rockwell has current or accumulated earnings and profits, without reduction for any Canadian income tax withheld from such distributions. Such Canadian tax withheld may be credited, subject to certain limitations, against the U.S. Holder’s federal income tax liability or, alternatively, may be deducted in computing the U.S. Holder’s federal taxable income by those who itemize deductions. (See more detailed discussion at “Foreign Tax Credit” below). To the extent that distributions exceed current or accumulated earnings and profits of Rockwell, they will be treated first as a return of capital up to the U.S. Holder’s adjusted basis in the common shares and thereafter as gain from the sale or exchange of property. Preferential tax rates for long-term capital gains are applicable to a U.S. Holder that is an individual, estate or trust. There are currently no preferential tax rates for long-term capital gains for a U.S. Holder which is a corporation.

In the case of foreign currency received as a dividend that is not converted by the recipient into U.S. dollars on the date of receipt, a U.S. Holder will have a tax basis in the foreign currency equal to its U.S. dollar value on the date of receipt. Generally any gain or loss recognized upon a subsequent sale or other disposition of the foreign currency, including the exchange for U.S. dollars, will be ordinary income or loss. However, an individual whose realized gain does not exceed $200 will not recognize that gain, provided that there are no expenses associated with the transaction that meet the requirements for deductibility as a trade or business expense (other than travel expenses in connection with a business trip) or as an expense for the production of income.

Dividends paid on the common shares of Rockwell generally will not be eligible for the dividends received deduction provided to corporations receiving dividends from certain United States corporations. A U.S. Holder which is a corporation and which owns shares representing at least 10% of the voting power and value of Rockwell may, under certain circumstances, be entitled to a 70% (or 80% if the U.S. Holder owns shares representing at least 20% of the voting power and value of Rockwell) deduction of the United States source portion of dividends received from Rockwell (unless Rockwell qualifies as a “foreign personal holding company” or a “passive foreign investment company,” as defined below). Rockwell does not anticipate that it will earn any United States income, however, and therefore does not anticipate that any U.S. Holder will be eligible for the dividends received deduction.

Under current Treasury Regulations, dividends paid on Rockwell’s common shares, if any, generally will not be subject to information reporting and generally will not be subject to U.S. backup withholding tax. However, dividends and the proceeds from a sale of Rockwell’s common shares paid in the U.S. through a U.S. or U.S. related paying agent (including a broker) will be subject to U.S. information reporting requirements and may also be subject to the 28% U.S. backup withholding tax, unless the paying agent is furnished with a duly completed and signed Form W-9. Any amounts withheld under the U.S. backup withholding tax rules will be allowed as a refund or a credit against the U.S. Holder’s U.S. federal income tax liability, provided the required information is furnished to the IRS.

A U.S. Holder who pays (or has withheld from distributions) Canadian income tax with respect to the ownership of common shares of Rockwell may be entitled, at the option of the U.S. Holder, to either receive a deduction or a tax credit for such foreign tax paid or withheld. Generally, it will be more advantageous to claim a credit because a credit reduces United States federal income taxes on a dollar-for-dollar basis, while a deduction merely reduces the taxpayer’s income subject to tax. This election is made on a year-by-year basis and generally applies to all foreign taxes paid by (or withheld from) the U.S. Holder during that year. There are significant and complex limitations which apply to the credit, among which is the general limitation that the credit cannot exceed the proportionate share of the U.S. Holder’s United States income tax liability that the U.S. Holder’s foreign source income bears to his or its worldwide taxable income. In the determination of the application of this limitation, the various items of income and deduction must be classified into foreign and domestic sources. Complex rules govern this classification process. In addition, this limitation is calculated separately with respect to specific classes of income such as “passive income,” “high withholding tax interest,” “financial services income,” “shipping income,” and certain other classifications of income. Dividends distributed by Rockwell will generally constitute “passive income” or, in the case of certain U.S. Holders, “financial services income” for these purposes. The availability of the foreign tax credit and the application of the limitations on the credit are fact specific, and U.S. Holders of common shares of Rockwell should consult their own tax advisors regarding their individual circumstances.

In general, U.S. Holders will recognize gain or loss upon the sale of common shares of Rockwell equal to the difference, if any, between (i) the amount of cash plus the fair market value of any property received, and (ii) the shareholder’s tax basis in the common shares of Rockwell. Preferential tax rates apply to long-term capital gains of U.S. Holders that are individuals, estates or trusts. In general, gain or loss on the sale of common shares of Rockwell will be long-term capital gain or loss if the common shares are a capital asset in the hands of the U.S. Holder and are held for more than one year. Deductions for net capital losses are subject to significant limitations. For U.S. Holders that are not corporations, any unused portion of such net capital loss may be carried over to be used in later tax years until such net capital loss is thereby exhausted. For U.S. Holders that are corporations (other than corporations subject to Subchapter S of the Code), an unused net capital loss may be carried back three years and carried forward

five years from the loss year to be offset against capital gains until such net capital loss is thereby exhausted.

Set forth below are certain material exceptions to the above-described general rules describing the United States federal income tax consequences resulting from the holding and disposition of common shares:

If at any time during a taxable year more than 50% of the total combined voting power or the total value of Rockwell’s outstanding shares is owned, directly or indirectly (pursuant to applicable rules of constructive ownership), by five or fewer individuals who are citizens or residents of the United States and 60% or more of Rockwell’s gross income for such year is derived from certain passive sources (e.g., from certain interest and dividends), Rockwell may be treated as a “foreign personal holding company.” In that event, U.S. Holders that hold common shares would be required to include in gross income for such year their allocable portions of such passive income to the extent Rockwell does not actually distribute such income. Rockwell does not believe that it currently qualifies as a foreign personal holding company. However, there can be no assurance that Rockwell will not be considered a foreign personal holding company for the current or any future taxable year.

If 50% or more of the combined voting power or total value of Rockwell’s outstanding shares is held, directly or indirectly, by citizens or residents of the United States, United States domestic partnerships or corporations, or estates or trusts other than foreign estates or trusts (as defined by Code Section 7701(a)(31)), and Rockwell is found to be engaged primarily in the business of investing, reinvesting, or trading in securities, commodities, or any interest therein, it is possible that Rockwell may be treated as a “foreign investment company” as defined in Section 1246 of the Code, causing all or part of any gain realized by a U.S. Holder selling or exchanging common shares to be treated as ordinary income rather than capital gain. Rockwell does not believe that it currently qualifies as a foreign investment company. However, there can be no assurance that Rockwell will not be considered a foreign investment company for the current or any future taxable year.

United States income tax law contains rules governing “passive foreign investment companies” (“PFIC”) which can have significant tax effects on U.S. Holders of foreign corporations. These rules do not apply to non-U.S. Holders. Section 1297 of the Code defines a PFIC as a corporation that is not formed in the United States if, for any taxable year, either (i) 75% or more of its gross income is “passive income,” which includes interest, dividends and certain rents and royalties or (ii) the average percentage, by fair market value (or, if the corporation is not publicly traded and either is a controlled foreign corporation or makes an election, by adjusted tax basis), of its assets that produce or are held for the production of “passive income” is 50% or more. Rockwell appears to have been a PFIC for the fiscal year ended May 31, 2005, and at least certain prior fiscal years. In addition, Rockwell expects to qualify as a PFIC for the fiscal year ending May 31, 2006 and may also qualify as a PFIC in future fiscal years. Each U.S. Holder of Rockwell is urged to consult a tax advisor with respect to how the PFIC rules affect such U.S. Holder’s tax situation.

Each U.S. Holder who holds stock in a foreign corporation during any year in which such corporation qualifies as a PFIC is subject to United States federal income taxation under one of three alternative tax regimes at the election of such U.S. Holder. The following is a discussion of such alternative tax regimes applied to such U.S. Holders of Rockwell. In addition, special rules apply if a foreign corporation

qualifies as both a PFIC and a “controlled foreign corporation” (as defined below) and a U.S. Holder owns, actually or constructively, 10% or more of the total combined voting power of all classes of stock entitled to vote of such foreign corporation (See more detailed discussion at “Controlled Foreign Corporation” below).

A U.S. Holder who elects to treat Rockwell as a qualified electing fund (“QEF”) will be subject, under Section 1293 of the Code, to current federal income tax for any taxable year to which the election applies in which Rockwell qualifies as a PFIC on his pro rata share of Rockwell’s (i) “net capital gain” (the excess of net long-term capital gain over net short-term capital loss), which will be taxed as long-term capital gain, and (ii) “ordinary earnings” (the excess of earnings and profits over net capital gain), which will be taxed as ordinary income, in each case, for the shareholder’s taxable year in which (or with which) Rockwell’s taxable year ends, regardless of whether such amounts are actually distributed. A U.S. Holder’s tax basis in the common shares will be increased by any such amount that is included in income but not distributed.

The procedure a U.S. Holder must comply with in making an effective QEF election, and the consequences of such election, will depend on whether the year of the election is the first year in the U.S. Holder’s holding period in which Rockwell is a PFIC. If the U.S. Holder makes a QEF election in such first year, i.e., a “timely” QEF election, then the U.S. Holder may make the QEF election by simply filing the appropriate documents at the time the U.S. Holder files his tax return for such first year. If, however, Rockwell qualified as a PFIC in a prior year during the U.S. Holder’s holding period, then, in order to avoid the Section 1291 rules discussed below, in addition to filing documents, the U.S. Holder must elect to recognize under the rules of Section 1291 of the Code (discussed herein), (i) any gain that he would otherwise recognize if the U.S. Holder sold his stock on the qualification date or (ii) if Rockwell is a controlled foreign corporation, the U.S. Holder’s pro rata share of Rockwell’s post-1986 earnings and profits as of the qualification date. The qualification date is the first day of Rockwell’s first tax year in which Rockwell qualified as a QEF with respect to such U.S. Holder. For purposes of this discussion, a U.S. Holder who makes (i) a timely QEF election, or (ii) an untimely QEF election and either of the above-described gain-recognition elections under Section 1291 is referred to herein as an “Electing U.S. Holder.” A U.S. Holder who holds common shares at any time during a year of Rockwell in which Rockwell is a PFIC and who is not an Electing U.S. Holder (including a U.S. Holder who makes an untimely QEF election and makes neither of the above-described gain-recognition elections) is referred to herein as a “Non-Electing U.S. Holder”. An Electing U.S. Holder (i) generally treats any gain realized on the disposition of his Company common shares as capital gain; and (ii) may either avoid interest charges resulting from PFIC status altogether, or make an annual election, subject to certain limitations, to defer payment of current taxes on his share of Rockwell’s annual realized net capital gain and ordinary earnings subject, however, to an interest charge. If the U.S. Holder is not a corporation, any interest charge imposed under the PFIC regime would be treated as “personal interest” that is not deductible.

In order for a U.S. Holder to make (or maintain) a valid QEF election, Rockwell must provide certain information regarding its net capital gains and ordinary earnings and permit its books and records to be examined to verify such information. Rockwell intends to make the necessary information available to U.S. Holders to permit them to make (and maintain) QEF elections with respect to Rockwell. Rockwell urges each U.S. Holder to consult a tax advisor regarding the availability of, and procedure for making, the QEF election.

A QEF election, once made with respect to Rockwell, applies to the tax year for which it was made and to all subsequent tax years, unless the election is invalidated or terminated, or the IRS consents to revocation of the election. If a QEF election is made by a U.S. Holder and Rockwell ceases to qualify as a PFIC in a subsequent tax year, the QEF election will remain in effect, although not applicable, during those tax years in which Rockwell does not qualify as a PFIC. Therefore, if Rockwell again qualifies as a PFIC in

a subsequent tax year, the QEF election will be effective and the U.S. Holder will be subject to the rules described above for Electing U.S. Holders in such tax year and any subsequent tax years in which Rockwell qualifies as a PFIC. In addition, the QEF election remains in effect, although not applicable, with respect to an Electing U.S. Holder even after such U.S. Holder disposes of all of his or its direct and indirect interest in the shares of Rockwell. Therefore, if such U.S. Holder reacquires an interest in Rockwell, that U.S. Holder will be subject to the rules described above for Electing U.S. Holders for each tax year in which Rockwell qualifies as a PFIC.

In the case of a Non-Electing U.S. Holder, special taxation rules under Section 1291 of the Code will apply to (i) gains realized on the disposition (or deemed to be realized by reasons of a pledge) of his Rockwell common shares and (ii) certain “excess distributions,” as defined in Section 1291(b), by Rockwell.

A Non-Electing U.S. Holder generally would be required to pro rate all gains realized on the disposition of his Rockwell common shares and all excess distributions on his Rockwell common shares over the entire holding period for the common shares. All gains or excess distributions allocated to prior years of the U.S. Holder (excluding any portion of the holder’s period prior to the first day of the first year of Rockwell (i) which began after December 31, 1986, and (ii) for which Rockwell was a PFIC) would be taxed at the highest tax rate for each such prior year applicable to ordinary income. The Non-Electing U.S. Holder also would be liable for interest on the foregoing tax liability for each such prior year calculated as if such liability had been due with respect to each such prior year. A Non-Electing U.S. Holder that is not a corporation must treat this interest charge as “personal interest” which, as discussed above, is wholly non-deductible. The balance, if any, of the gain or the excess distribution will be treated as ordinary income in the year of the disposition or distribution, and no interest charge will be incurred with respect to such balance. In certain circumstances, the sum of the tax and the PFIC interest charge may exceed the amount of the excess distribution received, or the amount of proceeds of disposition realized, by the U.S. Holder.

If Rockwell is a PFIC for any taxable year during which a Non-Electing U.S. Holder holds Rockwell common shares, then Rockwell will continue to be treated as a PFIC with respect to such Rockwell common shares, even if it is no longer definitionally a PFIC. A Non-Electing U.S. Holder may terminate this deemed PFIC status by electing to recognize gain (which will be taxed under the rules discussed above for Non-Electing U.S. Holders) as if such Rockwell common shares had been sold on the last day of the last taxable year for which it was a PFIC.

Effective for tax years of U.S. Holders beginning after December 31, 1997, U.S. Holders who hold (actually or constructively) marketable stock of a foreign corporation that qualifies as a PFIC may elect to mark such stock to the market annually (a “mark-to-market election”). If such an election is made, such U.S. Holder will generally not be subject to the special taxation rules of Section 1291 discussed above. However, if the mark-to-market election is made by a Non-Electing U.S. Holder after the beginning of the holding period for the PFIC stock, then the Section 1291 rules will apply to certain dispositions of, distributions on and other amounts taxable with respect to Rockwell common shares. A U.S. Holder who makes the mark-to-market election will include in income for each taxable year for which the election is in effect an amount equal to the excess, if any, of the fair market value of the common shares of Rockwell as of the close of such tax year over such U.S. Holder’s adjusted basis in such common shares. In addition, the U.S. Holder is allowed a deduction for the lesser of (i) the excess, if any, of such U.S. Holder’s adjusted tax basis in the common shares over the fair market value of such shares as of the close of the tax year, or (ii) the excess, if any, of (A) the mark-to-market gains for the common shares in Rockwell included by such U.S. Holder for prior tax years, including any amount which would have been treated as a mark-to-market gain for any prior tax year but for the Section 1291 rules discussed above with respect to Non-Electing U.S. Holders, over (B) the mark-to-market losses for shares that were

allowed as deductions for prior tax years. A U.S. Holder’s adjusted tax basis in the common shares of Rockwell will be adjusted to reflect the amount included in or deducted from income as a result of a mark-to-market election. A mark-to-market election applies to the taxable year in which the election is made and to each subsequent taxable year, unless Rockwell common shares cease to be marketable, as specifically defined, or the IRS consents to revocation of the election. Because the IRS has not established procedures for making a mark-to-market election, U.S. Holders should consult their tax advisors regarding the manner of making such an election. No view is expressed regarding whether common shares of Rockwell are marketable for these purposes or whether the election will be available.

Under Section 1291(f) of the Code, the IRS has issued Proposed Treasury Regulations that, subject to certain exceptions, would treat as taxable certain transfers of PFIC stock by Non-Electing U.S. Holders that are generally not otherwise taxed, such as gifts, exchanges pursuant to corporate reorganizations, and transfers at death. Generally, in such cases the basis of Rockwell common shares in the hands of the transferee and the basis of any property received in the exchange for those common shares would be increased by the amount of gain recognized. Under the Proposed Treasury Regulations, an Electing U.S. Holder would not be taxed on certain transfers of PFIC stock, such as gifts, exchanges pursuant to corporate reorganizations, and transfers at death. The transferee’s basis in this case will depend on the manner of the transfer. In the case of a transfer by an Electing U.S. Holder upon death, for example, the transferee’s basis is generally equal to the fair market value of the Electing U.S. Holder’s common shares as of the date of death under Section 1014 of the Code. The specific tax effect to the U.S. Holder and the transferee may vary based on the manner in which the common shares are transferred. Each U.S. Holder of Rockwell is urged to consult a tax advisor with respect to how the PFIC rules affect his or its tax situation.

Whether or not a U.S. Holder makes a timely QEF election with respect to common shares of Rockwell, certain adverse rules may apply in the event that both Rockwell and any foreign corporation in which Rockwell directly or indirectly holds shares is a PFIC (a “lower-tier PFIC”). Pursuant to certain Proposed Treasury Regulations, a U.S. Holder would be treated as owning his or its proportionate amount of any lower-tier PFIC shares, and generally would be subject to the PFIC rules with respect to such indirectly-held PFIC shares unless such U.S. Holder makes a timely QEF election with respect thereto. Rockwell intends to make the necessary information available to U.S. Holders to permit them to make (and maintain) QEF elections with respect to each subsidiary of Rockwell that is a PFIC.

Under the Proposed Treasury Regulations, a U.S. Holder who does not make a timely QEF election with respect to a lower-tier PFIC generally would be subject to tax (and the PFIC interest charge) on (i) any excess distribution deemed to have been received with respect to his or its lower-tier PFIC shares and (ii) any gain deemed to arise from a so-called “indirect disposition” of such shares. For this purpose, an indirect disposition of lower-tier PFIC shares would generally include (i) a disposition by Rockwell (or an intermediate entity) of lower-tier PFIC shares, and (ii) any other transaction resulting in a diminution of the U.S. Holder’s proportionate ownership of the lower-tier PFIC, including an issuance of additional common shares by Rockwell (or an intermediate entity). Accordingly, each prospective U.S. Holder should be aware that he or it could be subject to tax even if such U.S. Holder receives no distributions from Rockwell and does not dispose of its common shares. Rockwell strongly urges each prospective U.S. Holder to consult a tax advisor with respect to the adverse rules applicable, under the Proposed Treasury Regulations, to U.S. Holders of lower-tier PFIC shares.

Certain special, generally adverse, rules will apply with respect to Rockwell common shares while Rockwell is a PFIC unless the U.S. Holder makes a timely QEF election. For example under Section 1298(b)(6) of the Code, a U.S. Holder who uses PFIC stock as security for a loan (including a margin loan) will, except as may be provided in regulations, be treated as having made a taxable disposition of such shares.

If more than 50% of the total combined voting power of all classes of shares entitled to vote or the total value of the shares of Rockwell is owned, actually or constructively, by citizens or residents of the United States, United States domestic partnerships or corporation, or estates or trusts other than foreign estates or trusts (as defined by Code Section 7701(a)(31)), each of which own, actually or constructively, 10% or more of the total combined voting power of all classes of shares entitled to vote of Rockwell (“United States Shareholder”), Rockwell could be treated as a controlled foreign corporation (“CFC”) under Subpart F of the Code. This classification would effect many complex results, one of which is the inclusion of certain income of a CFC which is subject to current U.S. tax. The United States generally taxes United States Shareholders of a CFC currently on their pro rata shares of the Subpart F income of the CFC. Such United States Shareholders are generally treated as having received a current distribution out of the CFC’s Subpart F income and are also subject to current U.S. tax on their pro rata shares of increases in the CFC’s earnings invested in U.S. property. The foreign tax credit described above may reduce the U.S. tax on these amounts. In addition, under Section 1248 of the Code, gain from the sale or exchange of shares by a U.S. Holder of common shares of Rockwell which is or was a United States Shareholder at any time during the five-year period ending on the date of the sale or exchange is treated as ordinary income to the extent of earnings and profits of Rockwell attributable to the shares sold or exchanged. If a foreign corporation is both a PFIC and a CFC, the foreign corporation generally will not be treated as a PFIC with respect to United States Shareholders of the CFC. This rule generally will be effective for taxable years of United States Shareholders beginning after 1997 and for taxable years of foreign corporations ending with or within such taxable years of United States Shareholders. Special rules apply to United States Shareholders who are subject to the special taxation rules under Section 1291 discussed above with respect to a PFIC. Because of the complexity of Subpart F, a more detailed review of these rules is outside of the scope of this discussion. Rockwell does not believe that it currently qualifies as a CFC. However, there can be no assurance that Rockwell will not be considered a CFC for the current or any future taxable year.

Exhibits attached to this Form 20-F are also available for viewing at the offices of Rockwell, Suite 1020 –800 West Pender Street, Vancouver, British Columbia V6C 2V6 or on request of Rockwell at 604-684-6365, attention: Shirley Main. Copies of Rockwell’s financial statements and other continuous disclosure documents required under the British Columbia Securities Act are available for viewing on the internet at www.sedar.com.

The Company’s operations do not employ financial instruments or derivatives that are market sensitive and the Company does not have financial market risks.

In the normal course of business for its diamond operations, the Company enters into transactions for the purchase of supplies and services denominated in South African rand. As a result, the Company is subject to foreign exchange risk from fluctuations in foreign exchange rates. The Company has not entered into any derivative or other financial instruments to mitigate this foreign exchange risk.

The Company is equity financed and does not have any debt which would be subject to interest rate change risks.

While the value of the Company’s mineral properties can always be said to relate to the price of the commodity and the outlook for same, the Company does not have any operating mines nor economic ore and hence does not have any hedging or other commodity based risks respecting its operations.

The Company operates in South Africa, and like other foreign entities operating there, is subject to currency exchange controls administered by the South African Reserve Bank, the country's central bank. A significant portion of the Company's funding structure for its South African operations consists of advancing loans to its subsidiaries incorporated in South Africa. The Company’s ability to repatriate such funds once those subsidiaries are able to repay the loans, or to repatriate other funds such as operating profits should any develop, may be adversely affected by such exchange controls.

As required by Rule 13a-15 under the Securities Exchange Act of 1934 (the “Exchange Act”), the Company carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of May 31, 2006, the latest completed fiscal year. This evaluation was carried out under the supervision and with the participation of the Company’s Chief Executive Officer, Ronald W. Thiessen, and the Company’s Chief Financial Officer, Jeffrey R. Mason. Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective in timely alerting management to material information relating to the Company required to be included in the Company’s periodic SEC filings. There have been no significant changes in the Company’s internal controls or in other factors that could significantly affect internal controls subsequent to the date the Company carried out its evaluation.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed the Company’s reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the Company’s reports filed under the Exchange Act is accumulated and communicated to management, including the Company’s Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

During the Company’s most recently completed fiscal year ended May 31, 2006, there were no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to affect, its internal control over financial reporting.

The term “internal control over financial reporting” is defined as a process designed by, or under the supervision of, the registrant's principal executive and principal financial officers, or persons performing similar functions, and effected by the registrant's board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

The board of directors has determined that it does not have a member of its audit committee who qualifies as a “financial expert” as defined in Item 401(e) of Regulation S-B.

Rockwell believes that the members of its board of directors are collectively capable of analyzing and evaluating its financial statements and understanding internal controls and procedures for financial reporting. However, Rockwell is currently reviewing candidates for this role.

Rockwell has adopted a code of ethics that applies to Rockwell's chief executive officer, the chief financial officer, and other members of senior management. As adopted, the Company's Code of Ethics sets forth standards that are designed to prevent wrongdoing and to promote:

If any person becomes aware of a breach, or suspected breach, of the Code of Ethics, that person must report it immediately to his or her manager and Rockwell’s corporate secretary for action. If this is inappropriate or uncomfortable for the individual, the breach, or suspected breach, should be reported to another member of the senior management team and the corporate secretary for action. The Code of Conduct forms part of the conditions of employment for every one of Rockwell’s employees and officers, and also applies to its directors and contractors. Failure to comply with the Code of Conduct can result in disciplinary action including, where appropriate, dismissal.

The Code of Ethics was appended as an exhibit to Rockwell’s annual report on Form 20-F for the fiscal year ended May 31, 2004, filed with the Securities and Exchange Commission on November 30, 2004. Rockwell will provide a copy of the Code of Ethics to any person without charge, upon request. Requests can be sent to: Rockwell Ventures Inc., Suite 1020, 800 West Pender Street, Vancouver, British Columbia, Canada, V6C 2V6, Attention: The Corporate Secretary.

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.

Audit related fees comprise of fees billed for assurance and advisory services related to the annual audit. From time to time, management of the Company recommends to and requests approval from the audit committee for non-audit services to be provided by the Company's auditors. The audit committee routinely considers such requests at committee meetings, and if acceptable to a majority of the audit committee members, pre-approves such non-audit services by a resolution authorizing management to engage the Company's auditors for such non-audit 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 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.

The following Exhibits have been filed with Rockwell’s Annual Report on Form 20-F in previous years:

The following Exhibits are filed with the Company‘s Annual Report on Form 20-F in the current year:

The Registrant certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

Title of Each Class	Name of each exchange on which registered
None	Not applicable

		PAGE

PART 1

ITEM 1.	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS	2

ITEM 2.	OFFER STATISTICS AND EXPECTED TIMETABLE	3

ITEM 3.	KEY INFORMATION	4

ITEM 4.	INFORMATION ON THE COMPANY	13

ITEM 5.	OPERATING AND FINANCIAL REVIEW AND PROSPECTS	42

ITEM 6.	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES	51

ITEM 7.	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS	60

ITEM 8.	FINANCIAL INFORMATION	63

ITEM 9.	THE OFFER AND LISTING	64

ITEM 10.	ADDITIONAL INFORMATION	66

ITEM 11.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	80

ITEM 12.	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	81

PART II

ITEM 13.	DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES	83

ITEM 14.	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS	84

ITEM 15.	CONTROLS AND PROCEDURES	85

ITEM 16.	AUDIT COMMITTEE, CODE OF ETHICS, ACCOUNTANT FEES AND EXEMPTIONS	86

PART III

ITEM 17.	FINANCIAL STATEMENTS	89

ITEM 18.	FINANCIAL STATEMENTS	90

ITEM 19.	EXHIBITS	91

ITEM 3.		KEY INFORMATION

A.	Selected Financial Data

(In Canadian Dollars, except per share amounts)		As at May 31,
Balance Sheet Data		2006			2005			2004			2003			2002

Total assets (Cdn GAAP)	$	288,647		$	659,577		$	1,974,188		$	197,548		$	714,746
Total assets (US GAAP)		288,646			612,720			1,931,981			150,691			675,089
Total liabilities (Cdn GAAP)		1,146,070			29,976			33,406			256,003			103,787
Total liabilities (US GAAP)		1,146,070			29,976			33,406			256,003			103,787
Share capital (Cdn GAAP)		11,857,649			11,815,792			11,647,887			8,697,652			8,512,758
Share capital (US GAAP)		11,857,649			11,815,792			11,647,887			8,697,652			8,512,758
(Deficit) (Cdn GAAP)		(13,238,492	)		(11,637,819	)		(10,152,125	)		(8,756,107	)		(7,901,799	)
(Deficit) (US GAAP)		(13,696,885	)		(12,740,977	)		(11,255,283	)		(9,863,915	)		(9,002,407	)
Net assets (deficiency) (Cdn GAAP)		(857,423	)		629,601			1,940,782			(58,455	)		610,959
Net assets (deficiency) (US GAAP)		(857,424	)		582,744			1,898,575			(105,312	)		571,302

		Year ended May 31,
Statement of Operations Data		2006		2005		2004		2003		2002
Revenues (US and Cdn GAAP)	$	Nil	$	Nil	$	Nil	$	Nil	$	Nil
Loss for the year⁽¹⁾(Cdn GAAP)		1,600,673		1,485,694		1,396,018		854,308		1,753,364
Loss for the year⁽¹⁾(US GAAP)		1,553,817		1,485,694		1,391,368		861,508		1,951,704
Loss per share (Cdn GAAP)	$	0.07	$	0.02	$	0.02	$	0.02	$	0.04
Loss per share (US GAAP)	$	0.07	$	0.02	$	0.02	$	0.02	$	0.04

Exchange Rates
	Years Ended May 31
		2006	2005	2004	2003	2002
End of Period		0.9079	0.7994	0.7335	0.7302	0.6547
Average for Period		0.8521	0.7937	0.7447	0.6560	0.6378
High for Period		0.9099	0.8493	0.7879	0.7437	0.6623
Low for Period		0.7951	0.7261	0.7084	0.6273	0.6199

B.	Capitalization and Indebtedness

Not applicable.

C.	Reasons for the Offer and Use of Proceeds

Not applicable.

D.	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

ITEM 4.		INFORMATION ON THE COMPANY

SUMMARY

A.	History and Development of Rockwell

1.	The legal name of the Registrant is “Rockwell Ventures Inc.”

2.	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.”

3.	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.

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

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.

6.	The principal events in the development of Rockwell’s business since June 1, 2005, being the beginning of the most recently completed fiscal year, to November 28, 2006 are:

	(i)	In June 2006, Rockwell entered into an Agreement in Principle to acquire (the “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 payable in the common shares of Rockwell (“Common Shares”) related to the closing price of the Common Shares on the TSX Venture Exchange on specified dates described in Item B. Business Overview – Alluvial Diamond Properties below. Durnpike holds or is in the process of acquiring an interest and/or rights in four alluvial diamond properties in South Africa and the Democratic Republic of Congo. These are:

			Holpan/Klipdam Property in South Africa (“RSA or “South Africa”)

			Wouterspan Property in South Africa

			Galputs Mineral Project in South Africa.

			Kwango River Project in the Democratic Republic of Congo (“DRC”)

		In November 2006, Rockwell and vendors of Durnpike executed a definitive agreement (the “Definitive Agreement”) setting out the binding terms and conditions of the Acquisition similar to the Agreement in Principle. Rockwell has received the necessary regulatory approvals in Canada and South Africa and all conditions of such approval have been fulfilled.

	Exploration Expenditures
Ricardo Property	$ 300,000
Holpan/Klipdam/ Wouterspan Property	$3,125,000
Wouterspan Property	$5,000,000
Galputs Property	$1,700,000
Kwango River Project	$7,900,000

	(b)	spend US$7 million on a feasibility study on the Kwango River Project by August 31, 2007. This deadline may be extended to February 29, 2008 at no cost and be further extended to December 31, 2008 by payment of US$1 million in Common Shares. If Rockwell wishes to retain the Kwango River Project following completion of the feasibility study, Rockwell must (i) pay to the Vendors an amount equal to 60% of the net present value of the Kwango River Project Valuation (as determined in terms of the feasibility study and subject to a minimum acquisition cost of US$13 million and a maximum acquisition cost of US$26 million), which payment shall be effected in Common Shares and (ii) commit to incur an additional amount of up to US$6 million in expenditures for development of the Kwango River Project within 16 months from the date of completion of the feasibility study; and

	(c)	acquire Galputs Minerale (through a purchase of Virgilia Investments Inc.) for ZAR9 million (US$1.2 million), payable to the Vendors in Common Shares on the earlier of (i) the date of the JSE Inward Listing and (ii) within 9 months from signature of the Definitive Agreement. In the event that Rockwell has not obtained title to Virgilia within 5 days of the Listing Date, it will pay the Vendors ZAR5.8 million (US$0.8 million) on the Closing Date in Common Shares and a further ZAR3.2 million (US$0.43 million) in Common Shares at the time of the transfer of title to Virgilia shares to Rockwell in due course.

	a)	Minera Ricardo Resources Inc. S.A., 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 Ricardo

	c)	N9C, a wholly owned subsidiary incorporated under the laws of the Cayman Islands of which Rockwell owns a direct 100% partnership interest

	d)	N10C, a wholly owned subsidiary incorporated under the laws of the Cayman Islands of which N9C owns a direct 100% partnership interest

	e)	Rockwell Resources RSA (Pty) Ltd, a wholly owned subsidiary incorporated under the laws of the South Africa of which N10C owns a direct 100% partnership interest

A.	*Geological Terms*

	Induced Polarization (IP) Anomaly	A geophysical feature, which is considered to be different in appearance from the typical survey results (background) when tested for levels of electro-conductivity. An IP anomaly may be indicative of mineralization.

	Very Low Frequency Electromagnetic (VLF- EM) Survey	Method involves measurement of time varying low frequency electromagnetic fields in and over the earth, when these impinge on conducting formations or mineralized bodies at depth they produce currents that are measured at surface.

	Magnetotelluric Survey	An electromagnetic survey in which natural electric (two horizontal component) and magnetic (three component) fields are measured.

	Metallogenic Belt	Mineral deposits that occur in a particular geographic area or in a trend and are related in space or time to the regional geological features.

	Porphyry	An igneous rock containing conspicuous crystals or phenocrysts in a fine-grained groundmass; also a type of mineral deposit in which ore minerals are widely disseminated, generally of low grade but large tonnage

	Resistivity	An exploration method in which an electrical current is introduced into the ground by two contact electrodes and the potential differences are measured between any two other electrodes. Resistivity anomalies display the difference between fresh rock and rock in which metallic minerals or other changes have occurred.

	Sulphide	A compound of sulphur with another element, typically a metallic element or compound.

B.	*Measurement*

Conversion of metric units into imperial equivalents is as follows:

Description	Amount (CDN$)
Bulk sampling activities	$1,500,000
Trial mining activities	$1,225,000
General environmental work	$125,000
Geology, engineering and supervision	$275,000

B.	Business Overview

1)	Ricardo Property

	Year ended May 31
		2006		2005		2004
EXPENSES Exploration Foreign exchange loss (gain) Legal, accounting and audit Office and administration Property Investigation Shareholder communications Stock-based compensation – administration Stock-based compensation – exploration Travel and conferences Transfer agent filings	$	307,390 (46,881) 175,782 489,014 399,006 32,129 47,101 36,415 132,647 20,843	$	920,902 3,105 80,078 285,618 - 19,896 6,534 4,979 30,293 22,795	$	525,619 (34,856) 48,402 325,178 - 16,987 300,812 144,208 49,325 33,139
TOTAL EXPENSES		1,593,446		1,374,200		1,408,814
Interest income Gain on sale of marketable securities Write-down of mineral property interests Write-down of marketable securities		(2,172) (56,585) 46,856 19,128		(17,854) (6,138) - 135,486		(28,151) (9,645) - 25,000
LOSS FOR THE PERIOD	$	1,600,673	$	1,485,694	$	1,396,018

		Period a Director of the
Name, Position and Place of Residence	Position	Issuer

John Bristow	President, Chief Operating	since August 2006
Pretoria, South Africa	Officer and Director

Jeffrey Brenner	Director	since August 2006
Sandton, South Africa

Rene G. Carrier	Director	since April 1993
North Vancouver, Canada

David Copeland	Chief Executive Officer	since September 2006
Vancouver, Canada	and Director

Scott D. Cousens	Director	since November 2000
Vancouver, Canada

Jeffrey R. Mason	Chief Financial Officer,	since November 2000
Vancouver, Canada	Secretary and Director

Ronald W. Thiessen	Director	since November 2000
West Vancouver, Canada

Douglas B. Silver	Director	since March 1998
Englewood, United States of America

(1)	The information as to principal occupation, business or employment and Shares beneficially owned or controlled is not within the knowledge of the management of the Company and has been furnished by the respective nominees. Each nominee has held the same or a similar principal occupation with the organization indicated or a predecessor thereof for the last five years.
(2)	The number of Shares beneficially owned by the above nominees for directors, directly or indirectly, is based on information furnished by the Company and by the nominees themselves.
(3)	Certain of these shares are held by Euro American Capital Corporation, a private company that is wholly owned by Mr. Carrier.

	Exercise	No. of Shares
Expiry date	price	Reserved
September 28, 2007	$ 0.40	102,917
February 29, 2008	$ 0.42	210,000
March 28, 2008	$ 0.50	150,000
		462,917

(b)	Farmout agreement - British Columbia exploration properties, Canada

	In November 2004, the Company entered into a farmout agreement (the "2004 farmout agreement") with Amarc Resources Ltd. ("Amarc"), a public company with certain directors in common with the Company. Under the terms of the 2004 farmout agreement, Amarc granted to the Company rights to earn joint venture working interests of 50%, subject to a maximum of $600,000 in exploration costs to be spent on certain mineral properties located in British Columbia.

	For a period of 180 days after the Company had earned its working interest, Amarc had the exclusive right to purchase, at its option, the Company's earned interest for a number of Amarc common shares (or cash equivalent) not to be less than 110% of the qualified expenditures incurred by, or for the account of, the Company to earn its interest. If Amarc elected to issue common shares, the common shares to be issued upon exercise would be valued at the five-day weighted average trading price as quoted on the TSX-V prior to the date of the call.

	In December 2004, the Company had earned its 50% interest in these properties. Amarc did not exercise its option to reacquire the Company’s interest (the right of “Call”) on any of the properties within the permitted 180 days. Consequently, Amarc’s right of call expired.

(c)	Arrangements with Hunter Dickinson Inc.

	The Company is party to the geological and administrative services agreement with HDI dated for reference January 1, 2001, as described under Item 4.B of this Annual Report.

	During the fiscal year ended May 31, 2006, the Company paid $578,134 (May 31, 2005 – $163,317) for such services and cost reimbursements.

(d)	Gordon J. Fretwell Law Corporation

	Gordon J. Fretwell Law Corporation is a private company controlled by a director, Gordon Fretwell, that provides legal services to the Company. During the year ended May 31, 2006, the Company paid $nil (May 31, 2005 – $1,060) for such services.

(e)	Euro-American Capital Corporation

	Euro-American Capital Corporation is a private company controlled by a director, Rene Carrier, that provides management services to the Company. During the year ended May 31, 2006, the Company paid $18,630 (May 31, 2005 - $16,164) for such services.

(f)	Private placement participation by directors

	Pursuant to the private placement offering of $21 million in Item 5.B. Liquidity and Capital Resources, Mr. Copeland, Mr. Cousens and Mr. Mason participated in purchasing 300,000, 400,000 and 400,000 units, respectively.

(a)	Ricardo is currently awaiting the outcome of proceedings against Gasoducto Nor-Andino S.A. before the Chilean Supreme Court for compensation for a right of way for a gas pipeline situated on the Ricardo property.

(b)	The Company holds a 100% interest in certain mineral exploration and exploitation concessions totaling approximately 16,400 hectares in the Calama Mining District in Chile. The Corporación Nacional Del Cobre de Chile (“Codelco”), the Chilean national copper company, is currently erecting housing and other infrastructure, as part of a relocation of its workers for its Chuquicamata project, in certain areas of the Ricardo Property. The Company believes this construction usurps the Company's constitutional mining rights. Accordingly, in order to preserve access to its mineral concessions, the Company applied for several easements on its Ricardo Property to prevent Codelco from further developing its construction project over the Company's mining rights in November 2002. In June 2006, the Supreme Court of Chile denied the Company’s application for the easements.

	TSX Venture Exchange		OTC Bulletin Board
	Symbol=RCW		Symbol=RCKVF
	Canadian Dollars		U.S. Dollars
	High	Low	High	Low
Five most recent financial years
Fiscal 2002	$1.88	$0.48	$1.16	$0.28
Fiscal 2003	$0.88	$0.08	$0.56	$0.04
Fiscal 2004	$1.28	$0.16	$1.00	$0.24
Fiscal 2005	$0.68	$0.28	$0.52	$0.20
Fiscal 2006	$0.70	$0.28	$0.13	$0.05


Two most recent financial years by quarter
Fiscal 2005
Quarter ended August 31, 2004	$0.40	$0.28	$0.28	$0.20
Quarter ended November 30, 2004	$0.68	$0.28	$0.52	$0.24
Quarter ended February 28, 2005	$0.48	$0.32	$0.40	$0.24
Quarter ended May 31, 2005	$0.52	$0.28	$0.40	$0.24
Fiscal 2006
Quarter ended August 31, 2005	$0.44	$0.28	$0.37	$0.24
Quarter ended November 30, 2005	$0.52	$0.28	$0.42	$0.22
Quarter ended February 28, 2006	$0.55	$0.28	$0.56	$0.23
Quarter ended May 31, 2006	$0.70	$0.55	$0.64	$0.40

Latest six months
June 2006	$0.85	$0.60	$0.80	$0.55
July 2006	$0.79	$0.50	$1.98	$0.50
August 2006	$0.72	$0.52	$0.66	$0.51
September 2006	$0.61	$0.38	$0.58	$0.39
October 2006	$0.62	$0.48	$0.58	$0.25
November 2006	$0.71	$0.55	$0.70	$0.40

B.	Plan of Distribution

Not applicable.

C.	Markets

The shares of Rockwell trade in Canada on the TSX Venture Exchange (“TSX Venture”) and are quoted on the National Association of Securities Dealers OTC Bulletin Board (“OTCBB”).

D.	Selling Shareholders

Not applicable.

E.	Dilution

Not applicable.

F.	Expenses of the Issue

Not applicable.

F.	Dividends and Paying Agents

Not applicable.

G.	Statement by Experts

Not applicable.

H.	Documents on Display

A.	Debt Securities

Not applicable.

B.	Warrants and Rights

Not applicable.

C.	Other Securities

Not applicable.

D.	American Depositary Shares

Not applicable.

(1)	Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the registrant;

(2)	Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the registrant are being made only in accordance with authorizations of management and directors of the registrant; and

(3)	Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the registrant's assets that could have a material effect on the financial statements.

Services:		Year ended
		May 31, 2006		May 31, 2005
Audit Fees	$	32,250	$	20,000
Tax Fees		3,500		3,150
	$	35,750	$	23,150

D.	Exemptions from Listing Standards for Audit Committees

Not applicable.

E.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None.

(1)	Report of Independent Registered Public Accounting Firm on the consolidated balance sheets as at May 31, 2006 and 2005; consolidated statements of operations and deficit, cash flows and consolidated schedules of exploration expenses for each of the years ended May 31, 2006, 2005 and 2004;

(2)	Consolidated balance sheets as at May 31, 2006 and 2005;

(3)	Consolidated statements of operations and deficit for each of the years ended May 31, 2006, 2005 and 2004;

(4)	Consolidated statements of cash flows for the periods referred to in (3) above;

(5)	Consolidated schedules of exploration expenses for the periods referred to in (3) above;

(6)	Notes to the consolidated financial statements;

ITEM 18.	FINANCIAL STATEMENTS

Not applicable. See Item 17.

	Exhibit	Description

	4.1	Acquisition Agreement amongst Rockwell Ventures 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

	4.2	Loan Agreement between Rockwell Ventures Inc., Rockwell Resources RSA (Proprietary) Limited and Durnpike Investments (Proprietary) Limited, Jeffrey Brenner, Robert Blau, Larry Lipschitz, Mark Bristow, John Bristow, Les Johnston, Gawie Malan, Ira Sasha Epstein

	4.3	Contractor Agreement between Galputs Minerale (Proprietary) Limited and Durnpike Investments (Proprietary) Limited

	4.4	Credit Agreement between Quest Capital Corp. and Rockwell Ventures dated July 7, 2006.

	4.5	Subordinated Convertible Note Subscription Agreement

	4.6	Share Incentive Plan

	4.7	$21 million private placement of 42 million units at $0.50 per unit Subscription Agreement

	12.1	Section 302 Certification of CEO

	12.2	Section 302 Certification of CFO

	13.1	Section 906 Certification of CEO

	13.2	Section 906 Certification of CFO

	99.1	Audited financial statements as at May 31, 2006 and 2005 and for the years ended May 31, 2006, 2005, and 2004, and the Report of Independent Registered Public Accounting Firm thereon.

	ROCKWELL VENTURES INC.

Date: December 12, 2006	By:	/s/ David J Copeland
		DAVID J COPELAND
		Director, Chief Executive Officer