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East Africa focused potash company South Boulder Mines (ASX:STB) has announced Pre-feasibility Study results that show its flagship Colluli potash project could become one of the lowest-cost, and most significant, potassium sulphate operations in the world.

Operations will focus on the production of high quality potassium sulphate which commands a price premium over the more common potassium chloride product.

It is also the world's shallowest known potassium bearing evaporate deposit.

Cash costs are forecast at US$189 per tonne of potassium sulphate, with the premium Anfile Bay potassium sulphate expected to fetch US$588 per tonne on market.

Studies have demonstrated that undiscounted after-tax cashflow is anticipated at US$186 million per year; or US$5.1 billion over the first 30 years of the project life.

The Colluli PFS has examined a modular, two-phase operation using conventional mining methods over a 30 year mine life, but the large resource can support a mine life well over 100 years.

Capital costs for Phase One Colluli development are estimated to be US$442 million (including a US$48 million contingency) with annual production of 425,000 tonnes of potassium sulphate. It is planned that Phase Two will be operational from the fifth year, boosting production to 850,000 tonnes per annum for an additional capital cost of US$282 million.

The Perth-based, ASX-listed company's project hosts a large, high grade potassium bearing resource of 1.28 billion tonnes of potassium bearing salts, with a contained potassium oxide of 152.7mt.

"What the Pre-feasibility Study does show is that the Colluli project will be a globally significant, low cost production centre for potassium sulphate", South Boulder Mines managing director and CEO Paul Donaldson said.