The offshore Sunda Shelf diamond project continues to be the company’s main activity. Digging and gravel processing are continuing however, no results are available at this stage. The project managers, Trans Hex International Ltd (THI) and joint venture partners are reluctant to release preliminary results before the completion of bulk sample No. 1 due to the highly variable grades common throughout alluvial diamond deposits. Interim results may be misinterpreted, resulting in incorrect assessments of the project. Accordingly, results will be announced at the completion of the sample, scheduled for the end of May.
During March, the company’s application for a contract of work over the Sunda Shelf project received presidential approval. On April 28 1997, 68 contracts will be signed by government officials of Indonesia. The contracts guarantee the company security of tenure over the Sunda Shelf project throughout the 35 year life of the contract.
Sunda Shelf Diamond Project (Ocean 45%, Trans Hex – project manager – 30%)
Bulk Sample No. 1 – Line 2000 West
During the March quarter, the washing plant was commissioned. Operations resumed at the end of February on line 2000 west/1840 south where digging had been suspended last December. After a short period of operations in this area, project manager, Trans Hex, decided to advance 20m along line 2000 west and modify the size and extent of the bulk sample from a continuous trench 285m across the width of the channel, to two sections of 60m between 1,820 and 1760 south (1a) and 80m between 1660 and 1580 south (1b).
Digging and processing of gravels is continuing and the first bulk sample is scheduled for completion at the end of May, at which time, the JV partners will announce results. Operations to date have given the project team the opportunity to assess the geological conditions under which they will be operating during the remainder of the bulk sample program, and to make modifications to the plant to suit conditions. Consequently, successful modifications were made initially to handle clay, and more recently, to deal with oversize conglomerate and cemented gravels.
Dredging techniques have also been varied to handle the conditions, particularly the presence of the red clay throughout the sample area, at the 20 to 25m depth. Overburden is now pumped away successfully by the waste disposal system installed during the quarter, allowing the dredge to pre-strip at rates up to 800 cubic metre per hour. Major maintenance was undertaken on the dredge during the earlier shutdown period, preparing for the extensive 1997 bulk sampling program. Onboard the dredge, a computer system incorporating digital ground positioning satellite has been installed, providing an innovative visual aid to the winch operator, showing dredge location, a geological cross-section of the sample currently being dug, and the digging position of the bucket ladder in the trench.
Bulk Sample No. 2 – Line 1500 West
Sample No. 2 will be dug across the channel on line 1500 West between 330 and 150 south (180m) where an infill drilling program was completed during the quarter.
During the quarter, Trans Hex had expended US$2.5 million on the project entitling it to a 15% interest with Ocean diluting its interest to 45%. Trans Hex is required to spend a further US$2.5 million to entitle it to a further 15%. Of this, 3% will come from Ocean’s interest.
Martapura
The company has expanded its tenement holding in this region by applying for a seventh generation contract of work covering 7,629 hectares. The application area is contiguous to, and to the east of two KP’s, 3,500 hectares in size, in which the company has a 60% JV interest. The company will hold a 60% interest in the COW with PT Platindo Nusa Mas.
The additional area covers the location of Kerang Intan in the Kiam Kanan Valley, which together with nearby Cempaka, have been the areas from which large diamonds (up to 20 carats) are regularly recovered by local miners. It is planned to conduct a Bangka drilling program on this project during 1997.
Australia
Subsequent to the end of the quarter, the company entered into an agreement to farm out a 51% interest in an application for an exploration licence in the Northern Territory. The company will retain a 15% free carried interest in the application and the ultimate licence through to completion of a feasibility study. This allows the company to concentrate resources on diamond exploration.
The application area is in the East Alligator uranium province in close proximity to the Ranger, Jabiluka, Koongara and Narbarlek uranium deposits. Zones of uranium mineralization were detected during exploration in the seventies on the application area.
The licence application interests are now Ocean Resources 15%, Genesis Resources NL 51% and PNC Exploration (Australia) Pty Ltd 34%. PNC is wholly owned by the Power Reactor and Nuclear Fuel Corp of Japan.
The granting of the exploration licence is subject to agreement with aboriginal land owners. Negotiations are proceeding satisfactorily which should allow for the granting of the licence and permission for exploration to begin.
