Australian junior Ocean Resources tests Indonesian waters for diamonds

Australian junior Ocean Resources (OCR-V) has taken its search for alluvial diamonds to the coast of Borneo.

The Perth-based company has a history of exploring for gold, diamonds, uranium and mineral sands in Australia, and only recently turned its efforts to Indonesia.

Already, its Sunda Shelf offshore diamond project in Indonesia has attracted Trans Hex International as a joint-venture partner. A subsidiary of the Trans Hex Group, the company is the second-largest producer of diamonds in South Africa. It will spend US$5 million to earn a 30% interest in the project and secure the financing to take it into production.

Ocean and its other partners, Indomin Resources (IRL-V) and Indonesian-based PT Indo Teras Intan, signed the deal with Toronto-based Trans Hex last month.

Currently, Ocean owns 60% of the project, with Indomin holding 30% and PT Indo Teras Intan, 10%.

The Trans Hex group operates several alluvial diamond mines in South Africa and carries out exploration in Zimbabwe, Namibia, Brazil and the Central African Republic. In 1995, it produced 20,000 carats of diamonds, worth about US$55 million.

“Kalimantan” is an old Malaysian word meaning “river of diamonds,” and the area has a long history of diamond production. Indeed, Islanders have been mining alluvial diamonds from western, central and southeastern Kalimantan for nearly 1,300 years.

Recent attempts to locate the primary bedrock source of those diamonds have not proved successful, and Ocean is, instead, trying to find a secondary source.

The company believes that diamonds mined for hundreds of years in onshore paleochannels can also be found downstream. And since sea levels have risen since the last ice age, Ocean thinks the diamonds can now be found on the parts Sunda Shelf, in particular. To test its theory, the company acquired a large offshore land position in southeastern Kalimantan.

In 1994 and 1995, drilling both onshore and offshore not only confirmed the existence of the paleochannels but proved they were diamondiferous. The company recovered seven macrodiamonds and 10 micros. In addition, more paleochannel extensions, lying well beyond the currently drilled area, were mapped by seismic surveying.

Ocean is not the only company hunting for Kalimantan diamonds.

Ashton Mining, RTZ-CRA’s 50% partner at Argyle (the world’s largest diamond mine on a carat production basis), is planning a dredging program in an area hosting a 251-million-cubic-metre, diamondiferous gravel resource. That program is only 30 km upstream from Ocean’s project. Bulk sampling on the same property in 1981 yielded average grades of about 0.1 carat per cubic metre.

In addition, a drill program of Indomin is outlining an open-pit, bulk-sample site on its Martapura contract-of-work area.

And Australian firm Diamin Resources has applied for an enormous offshore contract of work covering the seaward side of Ocean’s stake. The company has planned a drill program to follow up a seismic survey that identified gravel units covered by fewer than 10 metres of overburden.