Trans Hex Group‘s deep-water mining vessel, the Mv Namakwa, is no longer sailing over the Marshall Fork deposit off the coast of Namibia after the Southern African miner terminated a joint venture with Canadian-based Diamond Fields International (DFI-T).
Trans Hex said it withdrew its vessel as recovery rates from DFI’s Mining Licence 111, which covers 70 km of coastal waters between Hottentot Point to the north and Diaz Point to the south, centred at Luderitz, weren’t meeting expectations.
Trans Hex’s executive director of marine operations, Andr Louw said, “Geological and mining conditions experienced in the joint-venture areas proved to be more difficult than DFI’s exploration work had identified. We registered our dissatisfaction to our partners in November 2001 in accordance with prescribed procedures.”
“Although some compromises were agreed in December 2001, more than seven months have passed without a solution to the fundamental differences. This has resulted in the automatic termination of the joint venture,” Louw added.
Diamond Fields says that Trans Hex’s withdrawal constitutes a repudiation of the joint venture agreement.
DFI’s CEO, Francis Waldron said in a prepared statement, “Trans Hex has placed us in a difficult situation, one that however could lead to favourable consequences for DFI.”
“Our mining operations in the past year have been profitable and have proven that our Marshall Fork deposit is robust, with grades exceeding those reported in our feasibility study. With Trans Hex’s withdrawal from the joint venture, DFI will be entitled to enjoy 100% of the future revenues from the deposit,” Waldron added.
On June 27, DFI announced that it received the go-ahead for debt financing of up to US$15 million from Overseas Private Investment Corp., a U.S. governmental agency. The financing will go toward the immediate acquisition of the first of two planned vessels. The financing is expected to close before mid-August.
DFI plans to have the vessel, which will carry a dual 24-inch airlift mining system, patrol the company’s Namibian marine diamond concessions that were not covered by the joint venture with Trans Hex. The ship is expected to set sail in March or April of next year.
The partners’ joint venture area covered 0.5% of Diamond Fields’ Mining Licence 111, including the Marshall Fork feature and the Diaz 12 zone of the Diaz Reef feature.
Outwardly, the two seemed to be getting along swimmingly having just recently recovered a 17-carat diamond from the Marshall Fork geological feature. The stone is reportedly the largest ever picked from the seabed in that particular region.
Between May 2001, when mining began, and March 31 of this year, the pair mined 26,800 carats from the Marshall Fork structure. The stones averaged 0.33 carat in weight.
Independent estimates place probable reserves at Marshall Fork at 1.4 million cubic metres averaging 0.3 carat per cubic metre. The reserve is spread over an area of 865,000 sq. metres.
Probable reserves at Diaz Reef are pegged at 3.6 million cubic metres averaging 0.13 carat per cubic metre, spread over an area of 2.13 million sq. metres. The Diaz 12 zone covers a portion of that structure.
The estimates employ a cutoff grade of 0.15 carat per sq. metre and a diamond price of US$175 per carat.
Diamond Fields plans on resuming operations as soon as possible.
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