The Decosmos clay property covers three areas on the eastern shore of Decosmos Lagoon on Hunter Island from which clay has been produced. Good quality clay deposits occur at the Clay Bay and Notice Bay localities. Poor quality clay mixed with sand and silt occurs near the mouth of the creek on the northern shore of Otter Narrows at the northern end of the lagoon.
Bedrock geology on Hunter Island consists of quartz diorites and granodiorite of the primarily Mesozoic Coast Plutonic Complex. During the Tertiary Period, overlying sedimentary and volcanic rocks were eroded away leaving a flat erosional surface. This surface is preserved in this region as the Milbanke Strandflat.
Around Decosmos Lagoon, post-glacial uplift has been slight. Decosmos Lagoon itself occupies a steep sided northerly trending graben that probably was downfaulted during Eocene crustal extension. The clay at Decosmos Lagoon appears to have derived from the narrow ridge east of the lagoon during an interglacial period. Only mud, settling out from suspension, was deposited near the eastern margin of the lagoon. At Clay Bay and Notice Bay, the mud accumulation exceeded four metres. Local southwestward ice movement during a subsequent glaciation scoured out most of the interglacial sediment from the floor and margins of the lagoon. The deposits were preserved only in the southwestward facing bays, Notice Bay and Clay Bay, where pressure shadow areas developed beneath the ice. The ice paved over the interglacial clay with a thin cobble till which is preserved at both locations near the high tide level. There lacks internal structure other than varves. On removal from drill core it resembles light blue toothpaste. After exposure for a day, it stiffens and turns to a green colour. When thoroughly dried, it regains its blue colour.
The composition of the clay is not known and has been a point of disagreement among geologists working on the property. They have speculated kaolinite, or illite, or montmorillenite. The blue colour suggests the presence of glauconite.
Local lore contains accounts of the local native people using clay from Hunter Island for medicinal purposes. Several exploration pits were dug by persons unknown, probably in the 1980s.
King Island Clay Limited located two claims, WH7052 and WH7054 in January 1990. About 455 tonnes of clay was excavated by the Company during the summer of 1990 and reclamation work was done. Two areas were excavated by persons unknown other than the owners of the claims after the 1990 reclamation and before 1992. The first area is adjacent to the southern margin of reclaimed pit at Notice Bay, and the second is at Clay Bay. It is believed that an estimated 600 tonnes of marketable clay was stolen from the claims.
In May 1992 geological mapping and a sedimentological survey were conducted for King Island Clay Limited by John Ostler and Barrie Field-Dyte. Core-proven reserves were calculated as 5720 tonnes between the high tide line and 2 metres below the high tide line, and 5060 tonnes between 2 and 4 metres below the high tide line, for a total of 10780 tonnes. Tonnages were calculated using specific gravity of 2.2 for water saturated clay.
Claims WH7054 and WH7052 are held in good standing until August 13, 2008 by Ironwood Clay Company Limited of Richmond.