rb milestone enewsletter stb

Hi all

An eNewsletter which was send to me Q&A with Lorry Hughes enjoy the read, also after the Q&A there is a Sector Blurb on the potash market.



----------------------------------------------------------


Q&A with Lorry Hughes, CEO & Managing Director
South Boulder Mines Ltd.




Q: Please highlight South Boulder Mines’ recent developments.

A: South Boulder has been rapidly progressing the Definitive Feasibility Study for open pit mining and the production of 1Mt of MOP potash at Colluli. This includes resource expansion, processing design, mining plans, geotechnical and ground water assessment, site water balance, port location and design and environmental and social impact assessment studies. Recently the Colluli Potash resource has been increased to 1.1 billion tonnes.

Q: What are the plans for South Boulder moving forward in 2012?

A: Our major objectives are as follows:

? Continue resource expansion and definition drilling
? Collect and conduct metallurgical processing test work
? Conduct definitive geotechnical and mine planning studies
? Conduct definitive environmental and social impact studies
? Conduct road transport and port design
? Establish local Eritrean community development and training programs
? Gaining mining lease approvals
? Establish potash marketing division in Singapore
? Continue engagement with strategic investors with a view to determine financing and off-take partners and terms
? Separate the other resource assets held by South Boulder into a separate listed entity to make investment in South Boulder Mines more attractive to strategic investors. This will create a dedicated production company that holds the Colluli Potash Project and dedicated exploration company that holds Western Australian gold and base metal assets.

Q: Please discuss the company’s cash position and value of investments.

A: The Company has ~US$ 18m in cash and ~US$ 2m worth of listed equities. This is adequate to complete the DFS.

Q: How many projects do you currently have, and at what stages are they?

A: South Boulder currently has 3 projects:

? Colluli Potash Project – DFS
? Duketon Nickel Sulphide Project – Scoping Study
? Duketon Gold Project – Exploration

Both the Duketon Nickel and Gold Project will be separated from the Colluli Potash Project into another listed entity.

Q: Who are your competitors and what distinguishes your company from others?

A: The competitors for South Boulder are established potash producers and potential Greenfields producers around the world.
The key distinguishing factors why South Boulder has a competitive advantage over all other potential Greenfields produc-ers are:
? South Boulder has the shallowest potash deposit in the world
? South Boulder has the best infrastructure location to deliver potash into the largest growth market for pot-ash in the world (Asia)
? South Boulder has the cheapest capital expenditure of any other Greenfields potash project in the world at USD$ 740 million which ensure strong economics and very early payback of capital.


Q: Who are the key players on your management team, and what kind of experience do they bring to the table?

A: Our key players are:

? CEO Lorry Hughes – extensive mining experience and key liaison with the Eritrean Government
? Director Chris Gilchrist – extensive potash, mineral processing and African mine development experience
? Chairman Terry Grammer – extensive African experience
? Mining Engineering Manager Dayle Kenny – extensive open cut mining experience
? Country Manager Zeray Leake – extensive Eritrean mining experience and Government liaison
? Potash Consultants ERCOSPLAN – extensive potash experience
? Engineering Consultants – extensive Eritrean engineering experience
? Environmental Consultants – extensive environment, hydrogeological and social impact experience.

Q: Who are the major shareholders of South Boulder Mines?

A: Sprott Asset Management and our Management comprise our biggest shareholders.

Q: What growth prospects does South Boulder have? Are there any other key developments?

A: Significant Growth is assured via completion of the DFS. This will be aided by the completion of:

? An in-specie distribution of shares to shareholder of the gold and nickel assets because South Boulder will become a dedicated potash production company
? The grant of a mining lease over the Colluli Deposit
? Exploring the numerous potential partnerships available to South Boulder through strategic investors such as China, India, The Middle East, potash producers, potash buyers and financial partnerships.


------------------------------------------------------------



Potash Markets


Potash is a mineral primarily composed of potassium chloride that is widely used as an agricultural fertilizer. Formed by evaporation of sea beds, it is extracted from underground ore deposits through conventional or solution mining processes.
Potash reserves worldwide in 2011 are estimated at 9,500 Mt, with the largest supply coming from Canada. Canada accounts for 46.1% of total world reserves and contributes around 30% to the total world production. After Canada, Russia and Belarus account for the largest potash reserves. On a consolidated basis, these three countries contain almost 90% of the world’s potash. Potash production has increased at a CAGR of 1.9% from 29.4 Mt in 2006 to 31.7 Mt in 2010. During the same period, Latin America and East Asia saw the highest CAGRs, growing at 11.8% and 10.5% respectively. Overall growth was affected by a decline in production in 2008 and 2009 because of the global economic recession. Due to lower domestic needs and large production volumes, Canada and Russia are the most notable exporters, while Asia and Latin America are the largest importers.
Overall, fertilizer consumption in traditional markets like Eastern Europe and Central Asia are likely to witness a bounce back, while the largest rise may be seen in East Asia, South Asia, and Latin America. Demand for fertilizers will be driven by requirements of a fast-expanding Asian population, greater investments in African agriculture and a revival in consumption. Accordingly, total fertilizer de-mand in 2012 is expected to grow at a slower pace of 2.4% y-o-y to 176.3 Mt and at a CAGR of 2.1% from 2011 to 191.1 Mt in 2016. Total demand for potash fertilizer is expected to grow at a stronger 4.2% y-o-y to 29.9 Mt in 2012 and at a CAGR of 3.2% from 28.7 Mt in 2011 to 32.6 Mt in 2015. This growth along, with other non-fertilizer based demand, will lead to an increase in total demand for potash at a CAGR of 3.2% from 32.2 Mt in 2011 to 36.5 Mt in 2015.
With an estimated 30 potash projects underway and with completion expected between 2011 and 2015 by existing producers, global potash capacity may increase from 43.7 Mt in 2011 to 59.7 Mt in 2015. As a result, world potash supply is projected to increase at 7.1% CAGR from 39.8 Mt in 2011 to 52.3 Mt in 2015. The growth in total demand for potash is estimated to be much lower than the supply growth. This would create a surplus situation in the coming years. Any delays in ongoing projects will alter the anticipated de-mand-supply landscape.



http://www.rbmilestone.com/?utm_source=BenchmarkEmail&utm_campaign=RBMG_eNewsletter_5_16_12&utm_medium=email