South Boulder Mines' in-fill drilling results please at Colluli...

South Boulder Mines' in-fill drilling results please at Colluli Potash Project

Wednesday, July 18, 2012 by Proactive Investors


Strong metallurgical in-fill drilling results could could boost the economics of the Colluli Project in Eritrea, particularly in the early phases of its operation. Recently, international private equity group Meridian Capital International Fund subscribed to all of South Boulder’s previously announced A$9.5 million share placement. Strong metallurgical in-fill drilling results could could boost the economics of the Colluli Project in Eritrea, particularly in the early phases of its operation. Recently, international private equity group Meridian Capital International Fund subscribed to all of South Boulder’s previously announced A$9.5 million share placement.

South Boulder Mines (ASX:STB) has received strong metallurgical in-fill drilling results at its Colluli Potash Project in Eritrea, that potentially could boost the economics of the Project.

The results demonstrated that project economics could be enhanced particularly in the early phases of its operation.

An earlier engineering Scoping Study for the production of 1 million tonnes per annum of potash generated a Pre-tax NPV of US$1.33 billion.

It also proved that an economic 1 million tonnes per annum potash mine can be built at half the cost of a typical potash development.

The Colluli Project will be one of a few “Greenfields” potash mines to come into production in the next 10 years. The location of the project provides much sought after infrastructure as it is approximately 70 kilometres from the Red Sea Coast and major shipping routes to Asia.

South Boulder is working towards developing the world’s first, modern, open pit potash mine, with initial production scheduled for 2016 or sooner.

The recent 16-hole large-diameter PQ-diamond drilling program has intersected significant widths of visually high-grade Sylvinite mineralisation within parts of the Area A resource including holes Col-069 & 076 where it had not been modelled.

High-grade Sylvinite mineralisation, which averages ~4.7 metres thickness and 28.56% KCl comprises the upper layer of the current JORC/NI 43-101 Mineral Resource at Colluli and underpins the current Definitive Feasibility Study (DFS).

In addition the program consistently intersected the entire Carnallite and Kainite potash sequence as anticipated.

The large-diameter drilling program was designed to provide sufficient potash samples in order to complete the processing testwork component of the DFS.

The information will also be used to update resource categories from Inferred to Indicated and Indicated to Measured (see ASX Announcement – 14th May) and to provide orebody geometry and geotechnical data which will be used to optimise open pit mining plans.

The best holes from the program, which will be assayed for both resource and metallurgical data, are:

- Col-063B - 2.90m of high-grade Sylvinite from 55.92m depth;
- Col-066 - 1.98m of high-grade Sylvinite from 42.99m depth;
- Col-069 - 2.00m of high-grade Sylvinite from 53.45m depth;
- Col-074 - 2.71m of high-grade Sylvinite from 29.70m depth;
- Col-076 - 5.05m of high-grade Sylvinite from 56.18m depth.

South Boulder’s managing director Lorry Hughes said the results have the potential to boost the economics of the Colluli Project, particularly in particularly in its early phases of operations."

“The start-up mining zone for Area A has now been drilled on ~600m centres with the results showing very good continuity of shallow high-grade mineralisation and suitably conservative resource estimation.

“The results continue to confirm the robust nature of the entire resource and the potential for further expansion,” Hughes added. Resource definition and extension drilling, as well as metallurgical, hydro-geological and geotechnical programs, are ongoing with assay results to be released as they come to hand.”

Recent Placement

Recently, international private equity group Meridian Capital International Fund subscribed to all of South Boulder’s previously announced A$9.5 million share placement, increasing its contribution from the initial amount of A$4.5 million.

Meridian and its associates will hold a 9.2% per cent stake in South Boulder, rising to 12.9 per cent if it exercises all its options.

The expedited settlement of the placement will enable South Boulder to focus on completing the Definitive Feasibility Study on its Colluli Potash Project in Eritrea, start early access works, provide working capital and finalise discussions with the state-owned ENAMCO.

Meridian is known to be bullish on potash.


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