Bulk sample No.2 in the north channel, 1,500 metres offshore, has just been completed. Approximately 2,900 cubic metres of gravel was mined and processed by the on board diamond recovery plant.
Two gem quality diamonds were recovered weighing 0.20 ct and 0.18 ct.
The sample was extracted from an area 85 metres long and 25 metres wide at basement. Basal gravel thickness ranged between 1 and 1.85 metres. A total of 191,500 cubic metres of overburden was removed to access the gravels.
Sampling was completed 15 metres short of the planned 100 metre long trench to allow sufficient time for the Aokom Thai No. 3 dredge to be prepared for its tow back to Phuket, Thailand and to arrive there on or before 13 January 1998 so as to avoid penalty costs pursuant to the lease agreement with the owners.
The plant and dredge operated exceptionally well during the No. 2 sample
program. Plant operations were closely monitored and tested for the
recovery of diamonds by introducing clearly distinguishable faceted
industrial diamonds of varying size to the plant at different sections of the process. The results of these tests were satisfactory, indicating the plant’s capability of recovering diamonds and its efficiency.
Gravels were well rounded with a maximum size of approximately 150mm. In some sections of the sample area, gravels were heavily contaminated with clay. This material was not processed which also contributed to the reduction in the volume of the sample from the proposed 5,000 cubic metres to 2,900 cubic metres.
While the dredge adequately performed the task of excavating the samples, it has proven to be time consuming and costly. Particularly as the dredge was required to dig its way to the two samples extracted.
In view of the high operating costs – approximately US$300,000 per month – it has been decided not to extend the lease on the dredge which expires on January 13 1998. All plant and equipment installed on board the dredge by the joint venture is currently being removed and taken ashore to be stored pending a decision on future exploration of the project area.
Sub-samples of the -1.55mm undersize material were recovered during
operations for examination for the presence of heavy minerals (rutile) and gold. Preliminary results confirmed the presence of rutile and gold. The examination of samples is continuing and when complete will be correlated with the results of regional and infill drilling and with the bulk sample.
During the forthcoming months the results of the sample program will be
evaluated. The joint venture is also monitoring with interest the bulk sample program of Indomin Resources Ltd, being carried out onshore, some 10 km upstream in the same north channel which the joint venture has just sampled. Results from the Indomin sample will provide very valuable information for the evaluation of the Sunda Shelf offshore project. The joint venture is also investigating alternative, less expensive sampling equipment.
It is currently proposed that the joint venture meet during the early part of 1998 to consider the results of the 1997 bulk sample program and plan exploration and sampling activities for 1998.
Trans Hex International (subject to final audit) has spent US$6 million on the project to earn a 51% interest in the Sunda Shelf joint venture. The company holds 42% in the project and PT Indo Teras Intan has a 7% free-carried interest through to completion of feasibility.
Trans Hex and Ocean will now be required to contribute to ongoing costs of the joint venture in proportion to their equities or dilute. Ocean presently intends to maintain its equity at 42%.
