DIAMOND PAGE — Sea yields treasures for diamond partners

A consortium of companies has completed its analysis of the first bulk sample from the Sunda Shelf project in the South China Sea, off the coast of Indonesia.

The consortium — Trans Hex International (THI-T), Indomin Resources (IRL-V), Ocean Resources (OCR-V) and Indonesian firm Indo Teras Intan — recovered the sample from the southernmost of two major paleochannels on the Sunda Shelf, which underlies the southernmost portion of the South China Sea.

This paleochannel, which lies some 2 km offshore, was the first to have been reached by the joint venture’s dredge.

A trench measuring 90 metres long by 25 metres wide was dredged across the paleochannel, recovering a single gem-quality macrodiamond weighing 0.2 carat from a 3-Metre-Thick, coarse, basal gravel horizon.

Trans Hex, which is a unit of South African diamond producer Trans Hex Group, reports that the excavation was delayed as a result of the excessive slumping of clay from the front and side walls of the trench. Although the problem was solved by reducing the angle of the walls, the volume of overburden stripped increased considerably.

The operation removed 175,680 cubic metres of overburden and treated 6,750 cubic metres of gravel. The sampling plant was modified so as to separate the gravel from the clay contaminant. Those operational obstacles have been resolved, and the second trench is expected to be completed on schedule.

The dredge is being moved 1,200 metres north to the other paleochannel, where the partners will excavate a trench 100 metres long by 25 meters wide. That site was selected on the basis of high counts of coarse rutile grains recovered from regional and infill drill samples. Dredging and treatment of the second bulk sample, including excavation of the access channel, is expected to last three months. Extensive maintenance to both the dredge and on-board treatment plant will be carried out during the excavation of the access channel.

Trans Hex can earn a 30% interest in the Sunda Shelf project, for which it must pay an earn-in fee of US$5 million.

To complete the second bulk sample, however, the company has agreed to spend an additional US$1 million. In return, Trans Hex will receive an additional 12% interest in the project from Ocean.

Also, Indomin has converted its 21% interest to a graduated royalty payment of between 1% and 5% of gross sales income less government royalty and sales expenses once commercial production has begun.

As a result of the equity restructuring, Trans Hex will hold a 51% interest, Ocean 42% and Indo Teras Intan, 7%.