South Boulder on a roll
And while Blue Sky is on the continent, it seems interest is about to heat up in another commodity central to the region’s development and prosperity – potash.
South Boulder Mines entered a trading halt on Friday and is expected to reveal an upgrade in reserves at its Colluli potash project in Eritrea on Monday.
It’s understood that the potash explorer could almost double its contained potash estimates to close to 200 million tonnes, with big implications for the project’s already stellar economics.
South Boulder hopes to develop the world’s only open-cut potash mine. The shallow nature of the existing resource means the company could end up with some of the lowest cash costs around.
A study in November revealed a $1.33 billion net present value based on a 1 million tonne-a-year mining operation and $740 million in start-up capital costs. The study said Colluli could generate as much as $6 billion in revenue over its 17-year mine life.
It is believed that the upgrade could see South Boulder revisit the targeted scale as well as the mine-life and potentially record even stronger economics, given the expectation that the new reserves also lie close to the surface.
South Boulder shares shot up sharply last month after it appointed Perth-based boutique corporate advisory Azure Capital to assist in negotiations with the Eritrean government, through the Eritrean National Mining Corporation (ENAMCO), to boost its stake from 10 per cent to 30 per cent through a paid option agreement.
South Boulder financed 6.7 per cent of the first 10 per cent but said ENAMCO would pay to earn its way into the project. Discussions are said to be progressing well.
http://www.afr.com/p/business/companies/energio_set_to_exploit_african_boom_1LLD0ttJ03udGsyCtJFbiI
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