As I understand it, the hematite is an oxidized magnetite.  The iron content in the rock is oxidized and it turns red. 

The exact nature of the distribution of the magnetite/hematite is not understood.  The location of the bulk sample may have especially high concentrations of iron, it will remain unknown until more core is analyzed and a database developed.  There does seem to be magnetite in the entire area, and it has interfered with the geophysic targets.

I went into some detail with Fraser about the impact on the diamonds.  He was not sure if the hematite was a hard crust that  surrounded the diamonds when the magma cooled and has to be chipped or ground off, or if it formed a mud coating on the diamond during processing and can be brushed or wiped off.  I believe it could be the latter, as the DMS involves a slurry of heavy liquid that floats the kimberlite and separates the diamonds. If the fine "dust" from the hematite coats the exterior of the diamond, it could interfere with the X-ray florescence and grease table.

The stones that came out so far were clear, so they didn't have a hard coating.  We will not have certain answers until we find more diamonds in the kimberlite that has not been through caustic.  So far we only have the 4.   Since the SRC audit results will also be caustic fusion, we still won't have the answer.  But perhaps there is an expert out there that can better answer this. 

There seems to be a growing opinion out there that the new SRC tests will not be any different.  I myself do not believe there is a barren spot at the bulk location, and am counting on a big surprise in the new results. 

I find failed processing easier to believe than failed science.

Ted