|Hudson continues mini-bulk sample processing|
2007-10-31 15:30 ET - Street Wire
by Will Purcell
Jamie Tuer's Hudson Resources Inc. will wrap up the processing of a mini-bulk sample of the Garnet Lake kimberlite on the western coast of Greenland within 10 days. The company struggled to get its plant running at full capacity and the test is expected to be smaller than first planned. Nevertheless, the equipment is producing concentrate in the desired quantities and Hudson believes it will have its first truly representative result from the dike.
Mr. Tuer said that Hudson began processing the kimberlite on the Thanksgiving weekend. Winter is arriving on schedule at the site, just south of the Arctic Circle. Temperatures are now running at about minus 25 C and daylight hours are fading rapidly. Daylight no longer is a big worry, as the work is taking place at the site, but the increasingly cold temperatures are having an inevitable effect on the equipment.
As a result, Hudson expects to wrap up the processing within a week and start shipping the concentrate back to a processing facility in Canada. Hudson touted its test as a 600-tonne sample through much of the year and the company did manage to excavate at least 500 tonnes of kimberlite during its dig. Mr. Tuer believes the company will be able to process about 200 tonnes of the material this fall, leaving about 300 tonnes stockpiled beside the processing facility for further testing next spring.
Hudson's Vancouver-based president said the company was completing two crushes on its rock, one at 12 millimetres and a second at six millimetres. Current indications are that Hudson's plant will send about 3 per cent of the material to the concentrates, which would give the company six tonnes of rock to sift through for diamonds after the first pass. A second pass following the second crush would add about four to five tonnes of concentrate, giving Hudson about 10 tonnes of material to ship to its lab for diamond recovery.
That suggests Hudson's plant is running efficiently with the Garnet Lake kimberlite, which is significantly denser than most other kimberlites. The company's first small mini-bulk test produced a large amount of concentrate, sparking suspicions the diamond recovery process was inefficient.
With a minimum crush set at six millimetres, Hudson will be missing many of the smallest diamonds in its kimberlite. Mr. Tuer said he expected that about 20 per cent of the diamonds would slip through, but that was not a major concern as it is a known issue. In any case, Hudson hopes to flesh out its recoveries of stones in the largest sieve sizes, which carry most of the value. The company is considering a third crush on the remaining material, but that would not occur until next year.
Hudson completed a 47-tonne test in 2006 and the result was less than impressive. The material produced just 12.07 carats of diamonds, indicating a grade of 0.26 carat per tonne, using a 0.85-millimetre cut-off. That result came with Hudson using a three-millimetre minimum crush. Earlier, the grade of the sample was 0.20 carat per tonne, with the initial six-millimetre crush. That suggests the grade of the new test will be roughly three-quarters of what a smaller crush size would deliver.
Hudson will need a significantly higher grade to attract notice from investors, but Mr. Tuer is hopeful. Hudson's microdiamond recoveries from kimberlite float and its drill cores appeared far more promising. The numbers suggested a relatively coarse diamond size distribution pattern and support a grade expectation of one-half carat per tonne or more. In fact, Mr. Tuer believes the data point to a potential diamond content between 0.7 and 1.0 carat per tonne.
Hudson closed down one cent to 66 cents Tuesday on 63,600 shares.