Hudson sees larger Greenland diamonds, shares drop 44%

Vancouver – Analysis of the latest diamond haul from bulk sampling at Hudson Resources‘ (HUD-V, HUDRF-O) Garnet Lake kimberlite dike in western Greenland hints at larger stones than previously recovered.

The Saskatchewan Research Council says large colourless diamond fragments recovered from roughly 160 tonnes of processed kimberlite are likely to have come from a single diamond weighing about 3.5-4 carats. The largest single stone recovered by the lab is 2.51-carat clear gem-quality octahedron.

The 25 next largest diamonds (in the plus-2.36 mm size fraction) had a total weight of 8.69 carats.

“These diamonds are the most important component of diamond project economics,” states James Tuer, Hudson’s president in the news release. “The recovery of large diamonds combined with the strong potential to host a significant tonnage of diamondiferous kimberlite is an excellent step towards defining an economic project.”

The latest 160-tonne sample was crushed to a larger size fraction than the previous 47-tonne mini-bulk sample processed in early 2007 successfully proving larger stones are present in the kimberlite.

Hudson says the lab recovered 252 commercial-sized diamonds from the latest sample boosting the average individual diamond stone size by 240% (from 0.040 carat to 0.096 carat) compared to last year’s program.

A total of 191 diamonds (larger than 0.85-mm size fraction) weighing about 18.4 carats was recovered from 140 tonnes of processed kimberlite material using an X-Ray Flow Sort and grease table circuit. An additional 20 tonnes of crushed kimberlite was processed through a caustic fusion circuit yielding 96 stones with a total weight of 1.44 carats.

About 85% of the diamonds recovered in sorting of the latest batch are classified as white-to-colourless, while 11% are grey and 4% amber. Roughly one third of the stones (including all of the largest diamonds) are clear with the balance exhibiting minor inclusions. Over 40% of the diamonds are octahedrons, or octahedroid-shaped, and almost half of the stones are reported as broken or fragments.

The company is looking to develop a processing method that maximizes recovery of the larger stones while minimizing breakage. Additional study into the hardness of the kimberlite will help in the development of the best diamond liberation methods. Apart from natural fragmentation, diamond breakage can occur during blasting, crushing or processing.

Extraction of larger bulk samples is planned for this year.

The diamondiferous Garnet Lake kimberlite dike is a structure dipping roughly 30 towards to the east and has been extrapolated for at least 2.2 km using a seismic reflection survey.

Hudson holds interests in mineral licences encompassing roughly 2,500-sq. km in the Sarfartoq region. The Garnet Lake kimberlite project is in close proximity to ice-free ports and infrastructure at the nearby town of Kangerlussuaq, which receives regular commercial jet service from Denmark and serves as the company’s exploration base.

Shares of Hudson that had rallied as much as 33% prior to the news plummeted 44% to close down 47 at 60 apiece in March 3rd trading.